ETHZilla Acquires 20% Stake in AI Platform Karus
- ETHZilla buys 20% of Karus for $10M.
- Karus will create tokenized auto loans.
- Potential impact on $1.6T ABS market.
ETHZilla Corporation has acquired a 20% equity stake in AI lending platform Karus Inc. through a $10 million deal aimed at tokenizing auto loans in the U.S. asset-backed securities market.
The acquisition signifies ETHZilla’s strategic expansion into real-world asset tokenization, potentially reshaping the DeFi landscape through AI-driven auto loans, increasing transparency and credit risk assessment efficiency.
ETHZilla Corporation has acquired a 20% stake in AI-based platform Karus for $10 million. This investment includes a $3 million cash payment and $7 million in ETHZilla stock. “This strategic acquisition not only enhances our portfolio but positions us to lead in the tokenization of real-world assets, particularly in the auto finance sector,” said the ETHZilla Leadership Team in their announcement. Source.
The acquisition allows ETHZilla to appoint a director to Karus’s board, indicating a strategic partnership. The focus is on leveraging Karus’s AI for tokenized auto loans.
The deal positions both companies to penetrate the $1.6 trillion U.S. asset-backed securities market. This involves integrating AI models to enhance credit risk assessment and transparency.
ETHZilla aims to influence DeFi infrastructure for real-world asset tokenization, marking a significant shift in asset management strategies.
The movement into AI-driven lending could redefine crypto-based lending protocols. ETHZilla will launch tokenized portfolios on Liquidity.io, marking a step towards integrating traditional finance with blockchain.
According to historical trends, tokenization within blockchains could impact governance tokens and DeFi lending protocols. The potential for new credit products in compliance with regulatory standards is significant.
