Collateral

Overview

Each PPA has a corresponding Tokenized Deed Poll, recorded as a controllable electronic record under Article 12 of the Uniform Commercial Code. The SPV, as title-holder, issues this uniparty instrument assigning the economic proceeds (but not ownership) of the PPA to the DayFi vault. The Tokenized Deed Poll is represented onchain as an ERC721 token. This structure allows the vault to hold a bearer-style economic interest in the underlying infrastructure while the SPV retains legal title.

Deed Polls

A deed poll is a legal instrument made and executed by one party only, without needing acceptance or signature by another. Traditionally, deed polls were used for personal matters like name changes or grants of authority, but they have also found interesting applications in finance.

In financial contexts, deed polls have often been used to create binding obligations from an issuer to whoever holds the instrument. Because they are unilateral, they can function similarly to bearer instruments: a company can issue a deed poll promising to pay certain amounts to the bearer or to holders of notes, bonds, or certificates. This is useful in structured finance because it allows obligations to be enforceable without bilateral contracts for every holder. For example, in Eurobond markets, deed polls have been used as the legal wrapper by which trustees or paying agents are bound to noteholders. Likewise, certain trust arrangements in derivatives or bond programs were executed through deed polls, binding the issuer to recognize and honor claims without requiring each investor to sign.

Tokenized Deed Polls

To obtain financing, an originator must sell their energy infrastructure directly to the protocol's bankruptcy-remote SPV. The SPV becomes the formal owner of the infrastructure, with responsibility for tax credit monetization, portfolio servicing, reporting, and operations & maintenance.

To fund the purchase, the SPV issues a tokenized deed poll ("TDP"), represented onchain as an ERC721 NFT. This deed poll entitles the holder of the note to the revenues of the underlying infrastructure, less any relevant management and servicing fees. The tokenized deed poll enforces digital property rights, and can be used as digital collateral to borrow capital from the protocol.

UCC Arcticle 12

Under Article 12 of the Uniform Commercial Code (UCC), a controllable electronic record carries the same enforceable legal rights as a paper instrument. Control of the tokenized deed poll confers the same authority as possession of a physical document. This legal recognition makes the ERC721 deed poll functionally equivalent to holding a signed deed in hand, allowing digital collateral to operate with full legal effect in both onchain and traditional frameworks.