Daylight, a decentralized energy startup backed by a16z crypto and Framework Ventures, launched a new protocol on Ethereum on Tuesday aimed at turning electricity into a yield-generating crypto asset.
Daylight founder Jason Badeaux said in an interview with CoinDesk that the protocol, called DayFi, aims to create a “capital market for decentralized energy.”
Bardo explained that the rise of data centers, robots, electric vehicles and self-driving fleets will significantly increase power demand, and today installing new capacity the old-fashioned way is too slow and cumbersome.
“Energy is becoming a bottleneck to progress,” he said. “Distributed energy resources provide the fastest and cheapest path to expanding grid energy production and storage today.”
DayFi’s model aims to connect DeFi capital with the growing demand for distributed, resilient energy systems.
Bring RWA to the chain
The move is in line with the broader trend of tokenizing real-world assets (RWA) such as U.S. Treasuries, funds and now solar energy, creating novel capital markets on blockchain rails through decentralized finance (DeFi) protocols and stablecoins.
Bardo noted that distributed energy systems face their own challenges, including high soft costs and complex, education-focused sales cycles. According to Daylight, about 60% of the cost of a typical residential solar installation comes not from hardware, but from customer acquisition and other inefficiencies.
To solve this problem, DayFi is applying crypto-native tools like token incentives and permissionless vaults to coordinate capital and scale infrastructure.
Badeaux said Daylight’s model combines incentives, financing and standardization onto a network to make distributed solar more accessible to users and easier to use by grid operators and power traders.
“This is building a new type of financial instrument that you don’t have access to in traditional markets unless you are one of the few large banks underwriting securitizations of large-scale distributed energy portfolios,” Bardo said.
How DayFi works
At its core, DayFi uses two tokens: GRID and sGRID.
GRID is a stablecoin built on the M0 technology stack and fully collateralized by U.S. Treasury bonds and cash. It pays no earnings.
sGRID (yieldcoin) is a derivative that combines Treasury bond interest with actual income generated by Daylight solar installations. Deposits are locked for two months using the vault infrastructure provided by Upshift and managed through K3’s management policies. Capital deployed by investors is lent based on tokenized rights to energy infrastructure cash flows.
From an investor’s perspective, they can deposit stablecoins into a smart contract vault. The funds are used to fund rooftop solar and battery systems. Revenues from these energy systems (generated through long-term power contracts, grid incentives and participation in virtual power plants) are tokenized and returned to savers in the form of revenue tokens.
Daylight is currently active in Illinois and Massachusetts, with plans to expand into more regional markets across the U.S., including California.
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