There are constantly new projects in the market, and those projects that can generate practical value are increasingly favored by capital.

Yesterday, Daylight, a project focusing on DePIN and energy sharing, announced a US$9 million Series A round of financing led by a16z. Other investors include Framework Ventures, Lattice Fund, Escape Velocity and Lerer Hippeau.

It is worth mentioning that, according to The Block, the startup started the financing process in April and completed it within 10 days, which shows that capital is optimistic about its business.

Meanwhile, the Series A round brings Daylight’s total funding to $13 million, after the company previously raised $4 million in seed funding in the summer of 2022.

So, what’s so special about this Daylight?

DePIN and Decentralized Power Grids

What exactly is Daylight doing?

Simply put, Daylight is building a decentralized protocol that allows users to connect their energy devices (such as thermostats, batteries, electric vehicles, and solar inverters) to the Daylight APP and earn rewards.

Users can also join the Daylight Marketplace to access energy upgrades for their home or building, such as solar panels, electric vehicle chargers, heat pumps, water heaters, and more. The market is currently active in New York, New Jersey and Pennsylvania, and will soon support Texas and California, Daylight said.

From a business point of view, it is the concept of DePIN and decentralized power grids.

The traditional electricity model is to build large power plants, transport energy through extensive transmission and distribution networks, and supply it to end users;

As power demand surges due to artificial intelligence and electrification, power supply becomes more unstable due to the growth of intermittent renewable energy sources. The result is a fragile, unreliable grid and an unclear path for future energy needs.

Distributed energy devices can be networked together to simulate larger power plants to improve grid reliability. What Daylight does is to build new energy market solutions from the bottom up, starting from individual households.

The picture above explains Daylight’s business model very well:

• Energy supply side: The Daylight protocol encourages users to access various distributed power resources, such as backup batteries, solar panels, smart thermostats, water heaters, and electric vehicle chargers. Incentives are provided through GRID tokens.
• Energy demand side: Daylight creates an open source developer platform. Allows developers to create a variety of energy-related applications and services, such as virtual power plants, electrification upgrade solutions, power outage detection systems, energy trading, demand forecasting tools, etc. Developers need to use tokens to access these applications and services.
• The Daylight platform itself serves as a bridge between the two ends, enabling direct interaction between energy producers and consumers through smart contracts and blockchain technology.

APP Software and Power Hardware Are Developed Simultaneously

What products from Daylight can users see now?

From the official website, the Daylight ecosystem consists of three core components:

• Daylight APP : For users to connect their own energy devices and earn rewards
• Daylight Market: A marketplace to simplify and standardize distributed energy equipment for homeowners and small businesses;
• Daylight Protocol: An on-chain platform for distributed energy capacity and energy data, regulating energy supply and demand through token incentives;

What’s interesting is that Daylight’s market is not a virtual trading place or platform, but actually installs energy hardware in the home of the owner.

The project will use its own carefully selected local contractors and artisan markets to modernize users’ home energy. Specifically, it will first help owners evaluate their home’s energy utilization, then give professional renovation and installation suggestions, and send someone to install it.

This business is currently popular in some states in the United States. Although it is not possible to experience it directly, it is reasonable to speculate that after installing these devices, you can connect to the Daylight APP and upload energy data in the form of DePIN or contribute energy to obtain token rewards.

In addition, the project’s APP is currently available in major application stores. Users can download it very simply, then connect it to their own energy equipment and start “DePIN mining”.

It should be noted that the backend of the APP is currently associated with the test network of the Daylight protocol, which means that the reward itself is not a formal token. As for when the official network will be launched, it remains to be released by the latest official news from the project.

Professional “Electrician Team”. Install First and then Promote

Public information shows that Daylight was established in 2022 and the business has been running for some time.

If you concentrate on making electricity, no one will ask you. Once you raise money, the whole world will know about it.

Regan Bozman, a member of Lattice Fund, an investor who participated in the Series A financing, posted that Daylight has not done much promotion and has been engaged in physical business in the past:

That is, as mentioned above, it provides energy upgrade services to homeowners, including solar energy, batteries, and insulation materials, and cooperates with energy companies that provide services to tens of thousands of households to promote this business to verify the feasibility of the hardware.

Unlike most crypto projects, DePIN projects are more related to devices and are somewhat asset-heavy. Daylight also has the business of installing equipment in person. The business model may be heavier and requires a more professional “electrician team”.

From the founder’s background, Udit Patel is a North East electricity market professional with extensive working knowledge of the electricity and gas markets.

According to LinkedIn, Udit is a “power engineering master” who has worked in various energy-related companies since graduation. His experience includes market compliance investigations, generator performance costs, and fee settlements. His transition from engineer to consultant is a very professional fit.

This may also be why top VCs such as a16z like to invest. Many crypto projects are too fictitious, making people with traditional industry skills and experience more favored and credible.

At the same time, we can also clearly feel a trend that there are already too many infrastructure projects within the crypto industry, and leaders in various sectors from all over the world are competing to appear, but the market demand may be limited;

Such projects targeting the real world and the physical industry will find their own unique shining points in the trend of crypto infrastructure.

In any case, the utility of a crypto project should not only be trading and speculation but also benefiting more industries for sustainable development.

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