Daylight, backed by Andreessen Horowitz (a16z) and Framework Ventures, has launched DayFi to tokenize electricity cash flows on Ethereum. The protocol aims to convert distributed energy revenue into yield-bearing crypto assets by pairing a Treasury-collateralized stablecoin with a novel yield token that channels DeFi capital into rooftop solar, batteries and virtual power plants.
How DayFi tokenizes electricity revenue
DayFi digitizes predictable revenue streams from distributed energy resources (DERs) and packages them into tradable tokens on Ethereum. Sales from solar generation, battery dispatch and long-term contracts are aggregated as investors deposit stablecoins such as USDT or USDS into the protocol; those funds are deployed to finance installations and aggregate DER cash flows, according to Daylight’s blog.
The protocol uses a dual-token structure combining GRID and sGRID to deliver stability and yield exposure. GRID is a stablecoin collateralized by U.S. Treasuries and cash that provides on‑chain stability but does not itself generate yield. sGRID is a non-redeemable, yield-bearing derivative that combines interest from the Treasury collateral backing GRID with the electricity revenues generated by the underlying assets; sGRID’s value therefore tracks the net asset value of the physical energy infrastructure, as described in coverage of the launch. By holding sGRID, depositors receive exposure to those combined revenue streams.
Ecosystem rollout, governance and risks
Daylight has begun a staged rollout with a $50 million pre-deposit vault to seed liquidity and link real assets to DeFi rails. Managed by K3 Capital using Upshift Finance’s vault infrastructure and deploying capital into Plasma’s DeFi markets, participants earn yield from K3’s strategies and enhanced ecosystem rewards, according to the project announcement. That pre-deposit vault is planned to convert into an Ecosystem Vault when DayFi enters beta, and the team is promoting GRID Games as a campaign to scale liquidity and engagement across the protocol.
Operationally, the protocol is live in Illinois and Massachusetts with plans to expand into other U.S. markets including California. DayFi relies on Ethereum smart contracts for tokenization, vault mechanics and revenue distribution, and has signaled interest in privacy-preserving tools such as zero-knowledge proofs to protect sensitive grid information while maintaining verifiability.
Regulatory and valuation risks center on potential security classification and on-chain pricing of depreciating physical assets. Regulators could view sGRID as a security, triggering disclosure and registration obligations, a risk highlighted in market coverage. On‑chain valuation of tokens tied to depreciating physical assets also creates consensus and manipulation vulnerabilities, and integrating operational electricity data raises concerns about protecting Critical Electricity Infrastructure Information (CEII), which Daylight says it is addressing with technical mitigations.
DayFi represents an attempt to build a crypto-native capital market for decentralized energy by marrying Treasury-backed stability with real-world electricity revenue. For traders, treasuries and compliance teams the protocol introduces new RWA mechanics and regulatory questions that will shape adoption, with the next verified milestone being DayFi’s beta launch and the conversion of the $50 million pre-deposit vault into the Ecosystem Vault.
