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Platform Workflow

Energy Substantiation connects suppliers with investors through a daily auction process.

The Core Flow

Supplier Creates Offer → Investor Places Order → Auction Matches → Tokens Issued → Settlement

1. Suppliers Create Offers

Energy suppliers offer to sell energy:

  • Specify quantity, discount and term
  • Issue volumetric energy receipt for specified quantity
  • Retain physical custody of the commodity

2. Investors Place Orders

Investors place orders to acquire or redeem tokens:

  • Mint orders - Purchase new tokens
  • Burn orders - Redeem tokens for cash or physical delivery of underlying energy

3. Daily Auction

Each market day, the platform runs an auction:

  • Reference price for commodity is obtained
  • All matched orders execute at the same price
  • Supply and orders are matched and filled

4. Token Issuance

When orders match:

  • Investors receive tokens representing commodity exposure
  • Suppliers receive payment (minus their discount)
  • Custodian records energy receipts

5. Settlement

When investors want to exit:

  • Trade via secondary crypto market 24x7x365
  • Deliver tokens and submit a burn order
    • Receive cash at the current reference price
    • Tokens are destroyed
    • Energy receipts reduced to remove underlying energy

Key Participants

Participant Role
Suppliers Sell commodity and issue volumetric energy receipts for quantity sold, receive upfront payment
Investors Hold tokens backed by those volumetric energy receipts
Custodian Holds receipts, and audits suppliers to verify existence of commodity
Platform Operates auction, maintains records

The Custodian's Role

An independent custodian ensures everything is on the level:

  • Audits suppliers - Evaluates suppliers during onboarding and determines their capacity
  • Holds receipts - When offers match and are confirmed, receipts are deposited with the custodian
  • Verifies regularly - Verifies existence of physical commodity backing each energy receipt
  • Provides transparency - Publishes verification data so investors know tokens are backed 1:1

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