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By EnerDAO
EnerDAO: Fuelling the Global Green Transition through Decentralized Finance and tokenization of renewable power projects debt.
EnerDAO is a groundbreaking DeFi platform with a singular focus on expediting the worldwide shift to renewable energy. By fusing decentralized finance with the latent potential of small to medium-sized renewable projects, we democratize investment opportunities and dismantle barriers to green energy financing.
Renewable energy initiatives face a critical funding bottleneck, particularly smaller ventures. Exorbitant financing costs and cumbersome traditional models hinder these projects from taking off. We stress on the untapped need from the energy projects to be financed. However, we should also highlight the market perspective and green energy demand-supply gap that shows scalable opportunity and potential interest from investors. Moreover, EnerDAO is building instruments for digital asset investors that will provide them with more safety and predictability in terms of asset integrity and real yield generation.
We tackle this issue by harnessing the power of blockchain and tokenization. Our platform establishes a robust and transparent ecosystem that simplifies investments, mitigates risks, and leaves a positive impact on the environment. EnerDAO streamlines renewable energy financing, delivering tangible benefits to both investors and project developers seeking funding.
Activation award PoC - With the first Activation award we plan to develop the required basic flow and underlying smart contracts. We will use the developed PoC to engage with our internal and external stakeholders, i.e. energy companies, consulting firms, and financial organizations, to test the underlying hypothesis of EnerDAO`s process flow and receive feedback. These companies have already agreed to engage when the PoC will be ready.
Further development into an MVP - after building the basics, we plan to extend our work on other core features for such a platform that will help automate processes and build up the foundation of the final product, while testing every milestone against incumbent market participants from our network. The goal of the MVP is to have the technical solution ready while we configure the legal structure and financial product under it.
We plan to incorporate feedback from the initial PoC and MVP phases into further development.
EnerDAO will utilize the Stellar blockchain to facilitate transactions on the platform in EURC stablecoins. These stablecoins are pivotal for the European market, eliminating currency risks for both lenders and borrowers. The use of EURC stablecoins simplifies the investment and lending processes, allowing both parties to focus on generating real and fair yields. Additionally, it aids in determining loan conditions benchmarked against traditional local and national financing schemes.
Building such a project on Stellar and Using Soroban for smart contracts will enhance Stellar's motto of being the blockchain for the real world. We are confident that EnerDAO`s vision to merge decentralized finance with decentralized energy sources will help both worlds accelerate and grow. Further decentralized governance of such a platform will allow for active engagement of platform users and ownership of the instruments that will fuel the green transition while bringing real yield and business sense.
Projects on EnerDAO will use the Stellar Blockchain to tokenize their debt and bonds while employing Soroban smart contracts to specify loan terms and allocate tokenized debt and collateral to a network of distributed lenders. Each Borrower project will establish financing pools to facilitate investment from Lenders. Smart contracts will guarantee the equitable distribution of returns among the lenders within the pool. Blockchain technology enables the creation of a secondary market for these investment instruments, providing digital asset investors with diversified cash flows backed by physical power generation assets behind the tokenized borrower equity.
The beauty and the challenge of creating such an instrument is in the long tenure of such loans. While it might be not that interesting for the majority of current cryptocurrency users, such bonds, or tokenized best position tokens, when traded on the secondary market, will become a great hedge from purely digital assets volatility, guaranteeing a stable real yield as it will be generated from the operations of the underlying asset in the traditional and rapidly growing energy markets. All lending pool tokens will have an individual vesting schedule and once vesting is completed they can be redeemable. During the vesting schedule token holders can stake and receive rewards (LP tokens) that are redeemable anytime on the secondary market. To start off we're going to do tokenization through a 3rd party in Europe, right now in talks with Fireblocks and a few more. In the later stage, we will do tokenization ourselves on the platform with a built-in tokenization module and appropriate legal structure to support the process.
Furthermore, EnerDAO's integration with Stellar presents multiple use cases in the current banking system, including potential adoption by crypto-friendly banks, and other TradFi financial institutions using Stellar for diversification of their digital asset portfolio or for backing their stablecoins with tokenized collateral in EUR.
As a team, EnerDAO has already engaged with multiple renewable energy developers and received interest in such a platform from them. We will leverage this engagement to execute mock deals on the platform and gather feedback before moving beyond MVP. Today we have up to 200 mln in active interest from potential borrowers within Europe developing such projects as grid-scale solar power plants, wind power plants, battery energy storage facilities, renewable hydrogen projects, and EV charging station networks.
We have also established contact with such companies as BCG, Deloitte, and BloombergNEF to invite them to test the platform features and potentially become contributors to the platform's tasks of executing project due diligence before listing and spreading this option for raising capital among their clients from the target market. Moreover, we plan to pitch the platform at specialized energy and blockchain events promoting our work with Stellar and inviting new users to the platform. The initial liquidity will come from the strategic investment round that we're going to conduct once we have the MVP and complete the grant with Stellar. On top of that, we're going to work with the market maker - Flow Traders.
Benefits for Investors and Lenders: Diversified Portfolio: Access a range of renewable energy projects. Structured Investments: Directly fund specific projects of interest. Risk Management: Benefit from robust due diligence and smart contracts. Liquidity: Trade tokens for liquidity and price discovery. Governance: Participate in decision-making through token-based voting.
Benefits for Borrowers (Project Developers): Easy Funding: Bypass traditional finance hurdles. Competitive Rates: Access lower-cost capital through global investors. Transparent Terms: Clear listing of loan terms and rates. Community Validation: Gain credibility from community vetting. Asset Tokenization: Simplify asset management via digital tokens.
EnerDAO intends to generate revenue through spreads between borrower interest rates and returns paid to investors, along with platform fees for additional services. The formal legal structure will be established following the successful deployment and validation of our MVP. The legal structure will receive all required licenses and will operate in a compliant manner, also acting as the platforms back-end for off-chain activities such as loan agreements, borrowers' collateral liquidation, and others.
By harnessing the potential of DeFi, EnerDAO not only simplifies investment in renewable energy projects but also propels the global transition to green energy forward.
Note: We should highlight that the scope of deliverables under the Activation Award does not represent the full MVP vision and covers the first needed steps to set the core of the project. Moreover, the key features of the platform, its functionality, and smart-contract configuration will be tailored to the market participants' needs based on the feedback we will receive from the abovementioned stakeholders that we plan to invite into the MVP and test the platform on a test net version. So far, a number of borrowers and potential lenders have expressed interest in such an exercise.
$47.7K
Andrii Bondar
No other submissions.