Download Grayblock Whitepaper Nov. 2021 v2.1

DECENTRALIZATION OF RENEWABLE
ENERGY FINANCING
TABLE OF CONTENTS
Executive Summary
3
Introducing Grayblock Power Network
4
The Benefits
4
The Opportunity
4
The Future
4
Initial Product Roadmap
5
Energy Yield Farming (Example)
5
Net-Zero Universal Carbon Offset
5
Net-Zero BTC
5
Onboarding of Energy Projects
6
Network Partners
7
Network Benefits
8
Regulation and Risk
9
Grayblock Power Network Governance Protocol
10
Governance Token Supply & Ownership
11
Governance Token Economics
Design Features & Key Innovations
12-13
14
EXECUTIVE SUMMARY
Grayblock Power Network (GPN)
is a launchpad for clean energy
projects built for and owned by
energy developers. GPN has been
established to develop,
construct, and re-finance
projects. On the network,
tokenized energy, CO2 and other
Netzero products can be sold
globally peer-to-peer. Acting like
a two-way marketplace,
decentralized finance provides a
competitive advantage when
compared to centralized ones.
Energy developers share a
common marketing platform for
which they can list projects at any
stage of development and still
maintain their independence. The
benefit of GPN’s shared payment
network is that it can finance
energy projects without banking
services and provide automatic
performance reporting. Network
Partners co-own and govern the
attributes of the network’s token
economics through GPNs voting
protocol. For this service, they
receive a fee on the total volume
of payments delivered from
energy projects (staking pools) to
defi lenders.
Network Partners are
economically incentivized to
maintain the security of GPN while
mutually benefiting from its
growth as more projects get
listed. Attributes like CO2 offsetts can be measured
accurately, tokenized, and traced
to a transparent and global public
ledger. This could significantly
reduce cost and time in carbon
offset certification through
viewable public ownership of
companies or individuals claiming
to be net-zero. The decentralized
nature of this platform
encourages rapid scaling by
empowering local experts to
become validators to energy
projects in their geographic
regions. A unique advantage of
GPN is its Decentralized Energy
Transfer (DET) token design,
which facilitates its native
payment network globally. DET is
an energybacked currency
collateralized by the average sale
of energy across all projects. Over
time, DET can act as a universally
accepted stable token (currency)
inflation-adjusted across all
assets.
3
Introducing Grayblock Power Network
The mission of Grayblock Power Network (GPN) is to
enable the acceleration of clean energy projects. GPN
provides energy developers competitive financing by
acting as a launchpad, selling directly to a global
marketplace. Energy Developers often take a
substantial amount of time and effort to raise funds and
convince banks or large investors their projects have
economic value. With GPN, developers can sell directly
to a market at the terms they wish with quick
turnarounds and less time spent on providing due
diligence material. The platform is designed for energy
developers and for them to benefit as the network
grows. When energy developers add more projects to
the network, the ease and ability to raise capital and
build new and larger projects also improves.
The GPN token is a decentralized finance (DeFi)
governance protocol that maintains security and
price stability (token economics) through several
voting protocols. The platform can market and
finance energy projects looking for development or
construction capital, refinance existing projects, and
monetize CO2 offsets for net-zero claims. GPN plans
to integrate with existing blockchains to enable
cross-chain transfers for GPN users. Produced
through staking GPN, the native payment token,
Decentralized Energy Token (DET), is earned by the
Network Partners and will enable a universal
exchange between global assets acting as a stable
token.
BENEFITS
OPPORTUNITY
FUTURE
GPN provides efficient
transactions, reduced time
spent on due diligence,
improved liquidity, and access
to risk-seeking capital for
project finance. GPN can
monetize CO2 and provide
automatic performance
reporting. Our vision is to build a
long-term, publicly transparent
clean energy network that is
shared and maintained by our
Network Partners. Over time,
the transparency and trust
provided by such a network
could significantly improve
speed to market, financing
costs and NetZero certification
worldwide.
GPN is the first to create a
Decentralized Energy Transfer
(DET) token. Through
innovations in blockchain
technology, DET’s value is
based on the collateral against 1
kWh of electricity sold across all
energy generators, fluctuating
in real-time. The same process
and technique can be applied to
measuring CO2 offsets
accurately through
tokenization. This can help
produce a universal carbon
offset that is publicly
transparent and net-zero claims
can be verified for companies or
individuals.
The evolution of decentralized
finance (DeFi) has matured to a
point where a diverse financial
ecosystem has been built
directly on blockchains, which
are transparent and verifiable
through cryptography and
secure smart contracts. These
platforms are redefining the
structure of capital markets by
operating without the need for a
central authority or thirdparty
intermediary. These digital
marketplaces are growing in
liquidity and looking for new
projects to invest in.
We expect GPN’s decentralized
financial service to be a
competitive advantage for
energy developers to build more
projects at all stages of
development
Overtime, DET can become the
first stable currency, inflation
adjusted to electricity production,
across all assets supported on the
network. Universal Carbon Offsets
(tokens) are publicly verifiable and
companies or individuals can use
them to claim they are net-zero
Energy developers maintain their
independence and economic
competitiveness while mutually
benefiting from the collective
growth of the network.
4
Initial Product Roadmap
GPN has a unique opportunity; by combining clean energy, smart meter feeds, and decentralized finance, we can
offer several products that would be highly efficient and cost-competitive relative to traditional products. Our
product roadmap starts with our first standalone energy yield farms, which provide loans to individual projects. This
will be expanded to offer Net-Zero BTC mining which will be verifiable to the end consumer with the expectation of
institutions to purchase once validated. GPN is expected to launch at the end of the year and may coincide with the
issuance of our first Carbon Offset credit, depending on the availability of projects. As time goes on, we will be able to
build sufficient liquidity to launch our DET token, which is expected sometime next year.
Energy Yield Farming (example)
Energy project passes due
diligence and is offered for
purchase by defi lenders
Defi lenders receive 1 Grayblock
Vietnam Solar (GVS) project token
per 1 BUSD
GVS is staked in project pool
Defi pool is paid interest plus
principal from energy project (sale
of electricity)
GVS holders can collect yield in
stable token (harvest every 6
hours, accrues every hour)
Liquidity pool is set up for GVS and
BUSD
GVS holders can either stake to
earn yield or sell GVS to get back
their capital for possible profit
Transparent Carbon Credits
Project revenue stream from a
project token is split into energy
and carbon credits sales
Project token holders’ stake to
receive BUSD and CO2 token
CO2 token is generated per tonne
CO2 equivalent through
measuring the smart meter and
local grid information
Carbon Credits are used to
collateralize the value of the CO2
token by the project revenue
Project token holders may sell CO2
offset peer-to-peer or to other
buys who wish to claim net-zero
Net-Zero Bitcoin Mining
A solar project is connected to
BTC miner and sells all power to
the miner
Miner sends BTC per kWh
measured to BTC wrapper
contract
Solar project pool stakers earn
yield in Net-Zero BTC per kWh per
BTC sent to wrapper
Project token stakers can trade
Net-Zero BTC peer-topeer or to
institutional buyer for premium
Net-Zero BTC can be exchanged
for BTC at wrapper contract 1 for 1
5
Onboarding of Energy Projects
Engagement
The Grayblock Power team and Network
Partners will provide an initial due
diligence check list which acts as a
screening process to assess your
project.
Due Dilligence
Due diligence will consist of an initial
listing fee and any other extraordinary
activities required to perform due
diligence. GPN and Network Partners
may request to review project
documents to determine both the risk
and expected benefits for GPN users.
Projects must pass a minimum
threshold of due diligence in order to
list for active listing. GPN and Network
Partners bring expertise in both
commercial and technical due
diligence whose assessment may be
used in the projects marketing when
listed.
Ongoing Network
Facilitation
Loan term sheet
GPN will maintain a public and secure
database that allows for automatic
performance reporting management
through its protocol. As more Network
Partners are added, the network can better
scale and address larger volumes of
transactions and projects across different
geographic regions. Projects listed must be
supported by a minimum number of
Network Partners, who are holders of GPN
and assist in the validation and security of
listed projects.
A term sheet will be generated from
one of our lenders who will provide the
details of the loan, terms, schedule of
payments and security or collateral
necessary in case of default. Our team
will recommend an optimal structure to
ensure success.
6
Network Partners
Join the Network
(Pre-Sale Offering)
Grayblock Power is looking to on-board energy
developers, capital providers, and community partners
to help promote and list energy projects to grow an
international ecosystem. The onboarding process for an
energy project starts with a consultation, followed by
becoming a Network Partner. Network Partnership
involves an initial due diligence fee to assess and vet a
specific or future project properly. During our prelaunch, Grayblock Power will also offer an allocation of
ownership of the GPN network in the form of tokens.
This is to ensure the network maintains its
decentralized nature and incents multiple parties to
grow the ecosystem, benefiting from its success.
Network Partners can also earn referral fees and
additional ownership of GPN, if they can provide
projects which receive successful financing (available
only pre-launch of GPN). Network partners maintain the
security and price stability of the network through
collective voting. For this service Network Partners earn
a 3% fee on all net cashflows sent from energy projects
to the defi lenders. Once publicly launched, individuals,
companies and/or institutions can become Network
Partners by purchasing and holding a minimum number
of GPN tokens, representing a percent (%) ownership of
total GPN supply.
Economic Benefits
Network Partners can be individuals, energy
developers’ and/or institutions which hold a minimum
of 10,000 GPN. The first 500 MWs of energy projects
listed by Network Partners involved in our pre-sale,
will receive pre-launch special incentives for projects
that pass due diligence. Referral payments will be
available for Network Partners who can recruit new
energy projects or help facilitate our private sale.
Holders of GPN who validate and secure the payment
network receive 3% on all routed payments from the
projects to defi lending pools. Any project listed must
seek a minimum number of Network Partners to
support a project listing. As the value of the network
grows, active Network Partners earn more GPN from
their initial ownership. Our goal is to facilitate a
decentralized group of Network Partners who are
economically incentivized to support real projects
that make real payments. Delinquent payments or
unsuccessful projects will oversupply the network
with GPN and DET tokens, reducing the value each
Network Partner receives from the network. Network
Partners will gain special and future voting rights that
will facilitate a market driven price discovery for GPN
by managing its growth rate balanced against the
number of megawatts (MWs) active on the network.
Over time Network Partners will have an ability to
provide proposals or changes to GPN that may
improve its token-economics or allow for new
products through the establishment of a
Decentralized Energy Organization (non-profit
foundation).
Earn fees, reduce your transaction costs
and gain access to competitive financing
for your energy projects. Validate energy
projects, grow the network, provide
proposals and vote on key attributes of
GPN’s function.
7
Network Benefits
Qualitative Benefits
Global Development Community
GPN enables a white label solution for
transparent reporting of energy generation, CO2
emissions and other attributes energy
developers wish to record. The network is cyber
secure and traceable reducing costs (ie. due
diligence, auditing and banking fees) across
Network Partners and users.
Grayblock Power anticipates signing on at least 500
MWs of energy projects across multiple energy
developers (Network Partners) prior to its public
launch. Grayblock power is happy to provide a list of
energy developers or projects interested in listing
after an initial consultation.
Mid-sized developers, in the size range of up to
50 MWs are usually local experts. They can take
advantage of local marketing and access riskseeking capital to build more projects and publish
their performance on a global public ledger
GPN expects that within the first 6-months we will
be able to reach our target of listing over 500 MWs
of energy generation. This represents a potential of
$500M of financing (TLV) and will seek other forms
of income generating assets such as hydro, wind,
nuclear, EV charging stations and energy storage.
Project Filtering
Projects can be filtered conveniently by
potential buyers for which the value
add can result in higher prices paid for
your projects. For example, if a project
in the Bahamas is reducing CO2 far
more per kWh than in Canada
(replacing diesel on the margin) then
those who want to reduce CO2
emissions would find your project.
Project Branding
Developers can customize their
offerings to promote more of their
projects or company brand. In fact,
other incentive programs such as
referrals, affiliate marketing and project
siting could be a future added service
from the GPN
Local Ownership
Many governments look for public
support and ownership of energy
projects due to their required land use
and distribution. This platform can be
used to locally target certain
demographics to ensure these
requirements are met and easily
verifiable.
Decentralized Energy
Organization
Upon successful listing and public sale of the
GPN token, those funds will be used to create
and establish a Decentralized Energy
Organization (DEO) which will act as the main
representative of the GPN network in a nonprofit
capacity. This is commonly practiced for most
networks, such as Ethereum which is operated
through the Ethereum Foundation. DEO’s core
function will be to provide funding for network
improvements and upgrades, including
marketing and facilitating future growth and
expansion of the GPN. The DEO will make
necessary changes or fund proposals suggested
by Network Partners. No individual will have sole
control/ownership of the DEO and it will seek to
operate in as decentralized manner as possible.
8
Regulation and Risk
GPN brings regulatory expertise as part of its service,
with improved on-boarding over time, using templated
and traditional structures. Private lending in many OECD
jurisdiction is unregulated, allowing for low costs in
implementing defi lending pools to private energy
developers. GPN expects this to be a competitive value
add to our Network Partners and will seek to ensure a
smooth and certain process.
What do buyers get?
These project tokens are staked in lending pools
which pay out the interest + principal to each project
token holder. Another value add is that each wallet
will maintain an immutable history of all performance
and holders who received payment from the lending
pools. The energy developer never receives the
financing directly but instead through a lender offchain who has a real legal agreement to take security
or collateral in case of default. The energy developer
will be the legal owner and operator of the project
from financial close until sale (project close-out).
We offer project buyers fractional ownership of
each loan offered to an energy project through
tokenization.
9
Grayblock Power Network
Governance Protocol
The Grayblock Power Network (GPN) is a shared
governance protocol, which acts to validate project
listings for defi lenders. Network Partners act as
validators and maintain price stability of the GPN price
through collective Voting Power. For this service, a % of
the network’s usage fees are received through the
activity of validation, supporting the network.
Who decides which projects are
listed?
Grayblock Power and Network Partners use their Voting
Power to approve projects to list. Projects would go
through a generalized due diligence process, for which
a report is generated and shared with the Network
Partners. If there is sufficient Voting Power for a
project, based on risk and size, then it may be listed.
Those who hold 10,000 GPN or more will gain Network
Partner status and have the following rights to the
network:
Earn fees from the total net cashflow routed
through GPN
3% fee on all payments sent from projects to
defi lending pools
Vote on projects to list, build your reputation &
business independently
Vote on the amount of GPN required to list new
projects (GPN / MW)
GPN is burned (reduce supply) to list projects
Vote on the amount of GPN minted from active
projects (GPN / MW)
GPN is earned (increase supply) by Network
Partners staked on active projects
Propose new products for development to the
DEO
10
Governance Token Supply & Ownership
The initial supply of GPN will be offered pre-public launch in 4 distinct segments to ensure it is decentralized,
secure and provides economic benefits for those who join and for initial Network Partners to be incentivized to help
it grow. Vesting schedules for all non-public sale is 6-months pro-rata per month. Token holders of GPN are
expected to stake in order to earn more GPN minted and fees, therefore it is expected most of the circulating
supply of GPN will be locked on to projects.
11
Governance Token Economics
Network Partnership status is designed to be more
costly as more MWs are served on GPN so that it is
harder for non-experts in energy, finance, and due
diligence to influence the stability of the network. The
minting and burning of GPN is maintained by the
Network Partners through their Voting Power. This will
help manage the price of GPN. As the price of GPN
increases, it will become more expensive to list
projects, so they may reduce the amount of GPN
required to increase the supply of new projects able to
list. This allows the listing price to stay constant while
allow GPN to appreciate.
GPN is expected to appreciate as more projects are
listed since it will be supported by a floor value, the
3% fee on all routed payments to the defi pools. If
GPN were to decrease too much from its public
launch price, those who buy GPN would earn
significant income when 1,000 MWs + of projects are
served on the network.
The initial supply of GPN will be capped at 15,000,000
and assuming a 7% dividend is forecasted per 1M USD
TVL then GPN forecasted token value is expected to
appreciate based on the below graph, growing as
more projects are added to the network.
Figure 1: Forecasted Growth and Value of GPN
Figure 2: Forecasted Project Listing Cost
12
Governance Token Economics (Cont.)
Over time, GPN is priced at the cost of a capacity auction price, very similar to how energy markets are financed
today (see figure 3). The additional supply of GPN minted is expected to match the number of MWs listed, such that
the network. The long-run supply curve of GPN, by design, is expected to match or be no less than 1 GPN per 1 MW
of capacity to launch a project on the network.
New GPN is minted per Capacity Factor (CF) validated, allowing for a continuous flow of new players to enter, and
grow the value of GPN. GPNs value will be relative to its ability to auction and finance new capacity onto the grid.
This is how modern energy markets work, through capacity auctions, providing some base value to GPN in units $MW on the network.
This is a graphical example of how a modern capacity auction for electricity generators is administered and how GPN token is designed to be similar in action and
how it gets priced. The UCAP is the utilized Capacity Auction Price for the capacity required, in this case ~375MWs, the price required to incentivize that many
MWs to come on to the system is priced at just less than $14 per MW per day for a full year.
In this circumstance, a price of $5,110 per MW per year is used to support 1 MW of capacity. GPN is designed to match in scarcity the number of MWs served so that
it will become similar in price based on this annual value offered by modern capacity auctions today
GPN is stakers only receive payment in DET, therefore
GPN holders are incentivized to only validate real energy
generating projects which provide real payment at good
returns. Otherwise DET and GPN will become over
supplied to the market and lose value. GPN is also
burned when listing new projects. This significantly
enhances the security of the network and helps tighten
any existing supply slack as projects are retired and
added over time.
Network Partners will benefit from the growth of the
network, as the total aggregate transactions
increase over time. All Network Partners will be given
special rights in terms of voting, governance, and
lower transaction fees for their own managed
projects. As the network grows, market driven
incentives will strike a balance between the price of
GPN to launch new projects and the value of the
energy projects produce in the real economy
13
Design Features & Key Innovations
GPN will bring together key innovations, already proven in the blockchain ecosystem to become a global
decentralized network. This table breaks down key design features of GPN.
with Avalanche, Solana, etc.
Working with Network Partners, the validated smart meter feeds can register and tokenized energy (DET) and
calculate the expected C02 reductions of a specific project.
14
Closing Remarks
As the world’s need to transition to a clean energy economy grows, only
electricity is the fuel source adaptable enough to power our 21st century
needs. Government, private industry, and institutions will have a role to
play but we do not have the luxury of time nor can withstand further
political delays. This network could significantly accelerate clean
electricity and its adoption. GPN hopes to create a fairer economy, where
everyone, even at the individual level can access and own their own clean
energy. As our societies continue to be more interconnected, a public
ledger can better administer and organize our collective energy demands
and needs. It is our belief that if we make energy, our accounting system
of value, then on that basis we can grow and revolutionize into a new
prosperous clean energy economy fit for the 21st century