Glow — Investment Memo

A DePIN protocol that incentivizes new solar deployments in high-cost-of-energy areas.

By Escape Velocity

Overview

Glow incentivizes new residential and commercial solar by pairing up-front protocol fees with on-chain rewards in $GLW and $USDC. Miners fund the treasury and get repaid based on carbon credits produced, while inflationary token emissions reward early participants and help bootstrap the network.

How Does Glow Mining Work?

  • Join the network: A miner installs new solar and must (1) pay a protocol fee in $USDC equal to the discounted value of 10 years of electricity revenues (typically 1–4× install cost, depending on local prices), and (2) complete audits by certification agents (pre- & post-install + permit checks; ~\$1k total).
  • Earn weekly rewards:
    • $GLW emissions: 175k $GLW minted weekly to miners for four years, weighted by each miner’s protocol fee relative to the active set.
    • $USDC distributions: 1/192 of the protocol treasury paid weekly to miners for ten years, weighted by verified carbon credits produced.
  • Value accrual: Carbon offsets generated by the network are auctioned for $GLW which is then burned (buyback-&-burn model).

Network Status (at time of memo)

  • Testnet launch: Dec 2023; first miners earning: late Mar 2024.
  • Live farms: 13, producing ~100 annualized carbon credits.
  • Treasury TVL: \$4.7m $USDC.
  • Token price references & implied valuations provided in the memo.

Game Theory for Miners

Miners stake up-front $USDC and share in a rolling four-year liquidation of the $USDC treasury, weighted by carbon output. Expected breakeven in $USDC over ~4 years, with upside from early $GLW emissions. Earnings depend on:

  1. How much $GLW is sold from the early liquidity pool.
  2. Join timing (earlier is better).
  3. Network growth speed (slower can be better for existing miners).
  4. Relative carbon-credit competitiveness.

Inflationary rewards are front-loaded: the average farm can recover protocol fees very quickly when the network is small; payback times extend as the network scales.

Tokenomics (Summary)

  • Ongoing issuance (weekly, perpetual): 230k $GLW (175k miners, 40k grants, 10k certification agents, 5k veto council). Some streams vest/are slashable over 100 weeks.
  • Premine: 108m $GLW (47m investors, 43m insiders, 12m early liquidity, 6m grants) on a six‑year linear vest with one‑year cliff (Dec 2024 for investors/insiders).
  • Early liquidity contract: 12m tokens with a bonding‑curve sale; proceeds feed the $USDC rewards pool.

What Do We Need to Believe (Long‑Term)?

  1. Installer adoption: Solar installers/financiers will scale deployments to mine $GLW; protocol design mitigates custody/contract risks.
  2. Carbon credit demand: Market will buy Glow’s solar credits (target \$5–10/credit) based on additionality arguments vs. traditional RECs.
  3. Valuation framing: Markets value Glow on “book value” (treasury) vs. near‑term “earnings” (burn from credit auctions).

Deployment‑Level Considerations

  1. Be early: Majority of lifetime $GLW mined in the first month; earlier go‑live strongly improves returns.
  2. Local energy costs drive capital needs: Protocol fee scales with local electricity rates (e.g., San Mateo can be \$60–75k).
  3. Counterparty risk: Fraud or outages can halt $USDC rewards; $GLW rewards continue four years unless kicked off for fraud.

Key Risks

  • Market may value Glow on $GLW burn from carbon auctions (earnings) rather than book value of treasury.
  • Operational risks: host moves, hardware failures, construction/audit delays, or fraud leading to ejection from the network.
  • Liquidity/execution risks: exchange listings, DEX liquidity depth, and early‑liquidity contract absorbing buy pressure.
  • Reputation risks: polarized views on team based on prior projects.

Underwriting Case (Scenarios)

Slow/medium/high growth modeled with assumptions on net inflows to early liquidity, start date (e.g., July), and reward split (e.g., 50%). Memo frames downside recovery (30–50% via $USDC) if $GLW → 0 and substantial upside if growth is steady with ongoing onchain demand.

Resources

Get the PDF version of the original investment memo:

Glow — Investment Memo by Escape Velocity

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