ETHZilla buys 20% of Karus to tokenise AI‑modelled auto‑loan portfolios

Published: 2025-12-03 18:30:05 |

ETHZilla acquired a 20% fully diluted stake in Karus, an AI-driven auto-lending and decisioning platform, in a $10 million deal ($3M cash, $7M in ETHZilla stock). The purchase grants ETHZilla a board seat, governance rights and access to Karus’s underwriting engine — trained on more than 20 million historical auto-loan outcomes and used to evaluate over $5 billion in originated loans — plus its distribution network of 20,000+ U.S. car dealerships, banks and credit unions. ETHZilla plans to integrate Karus’s AI credit models into its Ethereum-based infrastructure to issue AI-segmented, tokenized auto-loan portfolios with onchain settlement. The firm targets first tokenized offerings in early 2026 and projects $9–$12 million adjusted EBITDA per $100 million deployed into Karus‑modeled tokens. ETHZilla holds about 94,060 ETH in its treasury and reported a near 5% share-price rise after the announcement. The deal positions ETHZilla to tap the US auto-loan ABS market (around $1.6 trillion) for global investors and reflects broader 2025 growth in debt tokenization (including Treasurys and private credit). Key themes: tokenization, real-world assets, AI underwriting, Ethereum infrastructure.

Bullish

Direct price impact applies only to ETH. The deal is bullish for ETH sentiment and potential onchain demand because ETHZilla is integrating an AI-driven real-world-asset (RWA) product onto Ethereum and holds a sizeable ETH treasury (~94k ETH). Plans to tokenise large auto-loan pools and enable onchain settlement could increase demand for Ethereum blockspace, smart‑contract activity and potentially ETH usage for settlement or collateral. Short-term effects: modest positive sentiment and speculative buying in ETH following the announcement (as shown by ETHZilla’s stock move) but limited immediate onchain volume until tokenized products launch (target early 2026). Long-term effects: if ETH-native RWA issuance scales (tens-to-hundreds of millions per issuance), it could materially increase recurring demand for Ethereum services and raise ETH utility, supporting a bullish outlook. Risks that temper the bullish case include tokenization execution risk, regulatory uncertainty for US auto‑loan securitisations, and the time lag to market — any delays or regulatory pushback would weaken the near-term impact.