A16z bets on energy tokenization experiments, how will DayFi reconstruct the power grid using DeFi?

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Author: Jae, PANews

As global tech giants fiercely compete for every kilowatt in the power battle, electricity has become a more tangible currency than data. AI energy consumption devours grid resources like black holes, while traditional energy infrastructure remains mired in inefficiency.

An energy tokenization experiment is attempting to navigate the tightrope of regulation and valuation, creating an asset channel connecting blockchain and the power grid. Amid this fracture between energy and computing power, Daylight quietly makes its move; its decentralized energy capital market protocol, DayFi, announced it will open a $50 million pre-deposit event on December 16.

DayFi carries the ambition of “rebuilding the power grid with DeFi,” aiming to fragment future electricity revenue into tradable crypto assets. Backed by top-tier capital firms such as a16z Crypto, Framework Ventures, and others, the project represents not just an investment but a strategic move in the AI energy dilemma.

Transforming energy into revenue-generating assets has attracted millions of dollars in backing from firms like a16z

Daylight is an established DePIN project, founded in 2022, focusing on building distributed energy networks for generating, storing, and sharing clean electricity. Its founder, Jason Badeaux, stated: “Electricity demand is surging, but traditional capacity expansion is too slow and cumbersome. Distributed energy offers the fastest, most economical way to expand energy production and storage on the grid.”

However, distributed energy systems face their own challenges, including long sales cycles, extensive market education, and high costs. Typically, about 60% of residential solar installation costs stem from customer acquisition and other inefficiencies.

DayFi is precisely the capital channel built by Daylight to tackle these issues. It operates on Ethereum, providing funding support for the development of distributed energy projects via DeFi protocols.

Investors can deposit stablecoins like USDT and USDS to mint the protocol’s stablecoin GRID, injecting liquidity directly into distributed energy projects. GRID is a stablecoin built on the M0 tech stack, fully collateralized by US Treasuries and cash, and does not generate yield itself.

After staking GRID, investors receive a yield token, sGRID, as proof of stake, granting them a share of the underlying energy assets’ electricity revenue. In essence, sGRID combines returns from government bonds and solar power generation. Users depositing funds typically lock them in Upshift’s vaults for two months, with K3 deciding to lend to energy project borrowers collateralized by project revenues.

In other words, DayFi allows users to deposit stablecoins, which are then used to finance energy projects, with the earnings from these projects returned as tokens.

This model could create a virtuous cycle: liquidity flows into DayFi → protocol funds accelerate distributed energy development → energy projects generate income → income is tokenized and redistributed to token holders as yields.

Before its official launch, Daylight secured additional capital support. In October, it announced a $15 million equity round led by Framework Ventures, with participation from a16z Crypto and others, along with a $60 million credit line led by Turtle Hill Capital. Prior to that, from 2022 to 2024, Daylight raised a total of $9 million in seed funding from investors including Union Square Ventures, 1kx, Framework Ventures, 6MV, and OpenSea Ventures.

The involvement of VC firms like a16z has long been anticipated, as they have emphasized: “Electricity access is becoming a new moat in AI competition.”

According to the U.S. Energy Information Administration, by 2028, data centers’ electricity consumption share will surge from 4.4% in 2023 to 12%. This means that those who can secure cheap, stable power will have the advantage in training large models.

The bottleneck of current power grids lies in monopolization and inefficiency. Berkeley Lab data shows that the U.S. interconnection queue for new energy projects has accumulated up to 2,600 GW, with approval cycles often taking years. Large corporations can lock in resources through long-term power purchase agreements, while small and medium players must endure high electricity prices and long waits. The emergence of DayFi may meet this market demand.

Currently, Daylight operates in Illinois and Massachusetts, with plans to expand into California and other US regions.

Assets under regulatory scrutiny pose valuation doubts

While the vision is promising, reality is fraught with regulatory challenges. The primary hurdles for DayFi come from the SEC (U.S. Securities and Exchange Commission) and FERC (Federal Energy Regulatory Commission).

sGRID, representing future revenue rights from electricity income, could very likely be classified as a security under the Howey Test by the SEC. This would require DayFi to meet similar disclosure obligations as traditional financial products: regularly reporting on asset quality, cash flows, risk management, and establishing investor protection mechanisms.

More complex regulatory conflicts stem from FERC. Information about energy projects is often classified as Critical Electric Infrastructure Information (CEII), subject to strict confidentiality. Disclosing details such as plant location, design, or operational data could threaten the physical security of the grid.

This conflicts with the transparency ethos of DeFi. Blockchain requires income data to be verifiable on-chain; otherwise, it cannot prove the authenticity of yields. Overly vague compliance information could lead to “black box” scenarios, undermining decentralization.

Essentially, DayFi is walking a tightrope. It must design a “verifiable but non-disclosing” system, such as leveraging Zero-Knowledge Proofs (ZKP), to reveal only the results of income verification without exposing sensitive details like plant coordinates.

Even if regulatory hurdles are overcome, another critical question remains: what is the real value of the assets backing sGRID?

Unlike GRID, which is fully collateralized by cash equivalents, sGRID is pegged to the net asset value (NAV) of distributed energy projects. These assets—solar panels, energy storage batteries, inverters—are subject to technological advancements and depreciation, which can cause significant value fluctuations.

Crypto influencer @luyaoyuan sharply questioned this, saying: “The most虚部分 in net value is the book value of deployed renewable assets, which, based on 2025 depreciation, could include a bunch of decommissioned solar panels and batteries retired from EVs, making the valuation highly manipulable.”

In fact, the white paper emphasizes that sGRID cannot be redeemed at any time, and its value “fluctuates with the NAV of the underlying assets.” This effectively positions it as a kind of RWA (Real-World Asset) NAV index, but also opens a door for valuation manipulation.

The core issue is the lack of an on-chain valuation consensus for energy assets. While electricity revenue can be verified, the residual value of a power station might still rely on traditional audits, clashing with blockchain’s trustless principles.

The end of AI is electricity, and energy is becoming the next battlefield in AI competition. Elon Musk recently emphasized that energy is the true currency—beyond legislative control. With surging energy demand and the rising popularity of RWA concepts, DayFi aims to transform energy from static resources into dynamic DeFi assets, enabling efficient on-chain trading for power traders, grid operators, and investors. But is it a green-wrapped new energy DeFi protocol, or an early casualty lost in regulatory fog and valuation bubbles? Its on-chain journey may hold the answer.