a16z bets on energy tokenization experiments: How will DayFi restructure the power grid using DeFi?

Author: Jae, PANews

As global tech giants fiercely compete for every kilowatt-hour of electricity in the computing power arena, electricity has become a more valuable currency than data itself. AI's energy consumption is devouring grid resources like a black hole, while traditional energy infrastructure remains mired in inefficiency.

An experiment in energy tokenization is attempting to bridge the tightrope between regulation and valuation, creating an asset channel connecting blockchain and the power grid. Amidst this disconnect between energy and computing power, Daylight has quietly made its move, with its decentralized energy capital market protocol, DayFi, announcing a $50 million pre-deposit event on December 16th.

DayFi embodies the ambition of "reconstructing the power grid with DeFi," aiming to divide future electricity revenue into tradable crypto assets. Behind the protocol stand top-tier capital firms such as a16z Crypto and Framework Ventures; their investment is not merely in a project, but rather a strategic move to address the AI-driven energy dilemma.

Converting energy into a profitable asset, attracting millions of dollars in bets from companies like a16z.

Daylight is a long-established DePIN project, founded in 2022, focused on building distributed energy networks to generate, store, and share clean electricity. Project founder Jason Badeaux stated, " Electricity demand is increasing dramatically today, but traditional installation methods are too slow and cumbersome. Distributed energy will provide the fastest and most economical way to expand energy production and storage on the grid."

However, distributed energy systems also face their own challenges, including long sales cycles, extensive market education, and high costs. Typically, about 60% of the cost of a typical residential solar installation comes from customer acquisition and other inefficient processes.

DayFi is the capitalization pipeline built by Daylight to overcome this challenge. The protocol will be based on Ethereum and will provide financial support for the development of distributed energy projects through DeFi protocols.

Investors can deposit stablecoins such as USDT and USDS, and directly inject liquidity into distributed energy projects by minting the stablecoin GRID through the DayFi protocol. GRID is a stablecoin built on the M0 technology stack, fully backed by US Treasury bonds and cash, and does not generate yield itself.

After staking GRID, investors will receive sGRID as a yield token, which entitles them to share in the electricity revenue generated by the underlying energy assets. sGRID can be understood as a combined yield voucher that integrates government bond interest and solar power generation revenue. After users deposit this capital, it is typically locked in Upshift's vault for two months, and K3 decides whether to lend it to borrowers who use energy project revenue as collateral.

In other words, DayFi allows users to deposit stablecoin assets, use these funds to finance energy projects, and return the profits earned by these projects to them in the form of tokens.

DayFi's model design may create a positive flywheel effect: liquidity is introduced into DayFi → protocol funds are used to accelerate the construction of distributed energy → energy revenue is generated after the project is put into operation → the revenue is tokenized and returned to the holders as income.

Prior to DayFi's official launch, Daylight secured further capital support. In October, Daylight announced the completion of a $15 million equity funding round led by Framework Ventures, with participation from a16z Crypto and others, and also secured a $60 million credit line led by Turtle Hill Capital. Prior to this, Daylight raised a total of $9 million in seed funding between 2022 and 2024 from investors including Union Square Ventures, 1kx, Framework Ventures, 6MV, and OpenSea Ventures.

The entry of VCs like a16z into the field was not unexpected, as they once emphasized that "electricity accessibility is becoming a new moat in the AI competition."

According to the U.S. Energy Information Administration, data centers will account for 12% of electricity consumption by 2028, up from 4.4% in 2023. This means that whoever can secure cheap and stable electricity will have the confidence to train large-scale models in the future.

The current bottleneck in the power grid lies precisely in its monopoly and inefficiency. Data from Berkeley Lab shows that the backlog of renewable energy projects in the US grid interconnection queue has reached 2,600 GW, with approval cycles often taking several years. Large companies can lock in resources through long-term power purchase agreements, while small and medium-sized players can only endure high electricity prices and long waiting periods. The emergence of DayFi may meet this market need.

Currently, Daylight operates in Illinois and Massachusetts, and plans to expand to more regional markets in the United States, such as California.

Facing dual regulatory pressures, asset valuations are in doubt.

The ideal is lofty, but the reality is fraught with regulatory thorns. DayFi's primary challenges come from the SEC (Securities and Exchange Commission) and FERC (Federal Energy Regulatory Commission).

sGRID represents the right to future electricity revenue and is highly likely to be classified as a security by the SEC based on the Howey Test. This means that DayFi must fulfill the same disclosure obligations as traditional financial products: regularly report on asset quality, cash flow status, risk management, and establish investor protection mechanisms.

A more complex regulatory conflict arises from FERC. Energy project information is typically classified as CEII (Critical Electricity Infrastructure Information), subject to strict confidentiality requirements. Disclosure of power plant locations, design details, and operational data could threaten the physical security of the power grid.

This directly contradicts the transparency inherent in DeFi. Blockchain requires income data to be verifiable on-chain; otherwise, the authenticity of returns cannot be proven. Excessive obfuscation of information for compliance purposes could lead to a "black box" effect, undermining the very foundation of decentralization.

DayFi is essentially walking a tightrope. It must design a system that is "verifiable but not exposed," such as using zero-knowledge proofs (ZKP) to disclose the yield results only to the verifiers, without revealing sensitive information such as the geographical coordinates of the power plant.

Even after weathering regulatory inquiries, DayFi still faces another fundamental question: what is the true value of the assets behind sGRID?

Unlike GRIDs, which are fully secured by cash equivalents, sGRIDs are linked to the "net asset value" of distributed energy projects. These assets—solar panels, energy storage batteries, and inverters—can fluctuate dramatically in value as technology evolves and depreciates.

Crypto KOL @luyaoyuan also sharply questioned this, saying: "The most illusory part of the net worth is the book value of the deployed new energy assets. If it is valued according to the 2025 depreciation, it can completely include a bunch of waste solar panels, batteries discarded by new energy electric vehicles, etc., which leaves too much room for manipulation."

In fact, DayFi repeatedly emphasizes in its white paper that sGRID is not redeemable at any time, and its value "fluctuates with the net asset value of the underlying assets." This effectively positions it as a kind of RWA (Real-World Asset) net asset value index, but it also opens up room for imagination regarding valuation manipulation.

The problem is that power assets lack a consensus mechanism for on-chain valuation. Electricity revenue is verifiable, but the residual value assessment of the power plant itself may still rely on traditional audits, which fundamentally conflicts with the trustless principle of blockchain.

The ultimate goal of AI is electricity, and energy is becoming the next major battleground in the AI competition. Even Elon Musk recently emphasized that energy is the true currency, which cannot be obtained through legislation. With surging energy demand and the rise of the RWA (Resource-Based Asset) concept, DayFi transforms energy from a static resource into a dynamic DeFi asset, allowing electricity traders, grid operators, and investors to utilize it efficiently on-chain. But is it truly a green new energy DeFi protocol, or a pioneer destined to fail amidst regulatory uncertainty or valuation bubbles? Its on-chain journey may provide the answer.