ETHZilla has taken a monumental strategic step by acquiring a 20% stake in the artificial intelligence and finance startup Karus. John Kristoff, head of investor relations, confirmed that this alliance will allow the crypto treasury to issue tokenized auto loans on-chain by the year 2026. The company seeks to integrate advanced underwriting engines to revolutionize global access to vehicle credit markets.
The deal, valued at $10 million, combines $3 million in cash and $7 million in stock from the treasury company. Karus contributes a decisioning engine trained on more than 20 million historical auto loan outcomes. Furthermore, the startup has evaluated over $5 billion at origination, providing an essential pre-modeled dataset to structure AI-segmented pools with seamless on-chain settlement capabilities.
On the other hand, this move opens access to a massive segment of the asset-backed securities market in the United States. With approximately $1.6 trillion outstanding as of December 2024, this sector had traditionally been reserved for large institutional investment firms. By gaining a seat on Karus’s board of directors, ETHZilla secures a direct pipeline of loan portfolios stemming from a vast network of dealers and banks.
Likewise, financial projections estimate that every $100 million deployed into Karus-modeled tokens could generate up to $12 million in adjusted EBITDA. This could significantly strengthen ETHZilla’s balance sheet, which currently holds 94,030 Ether in its reserves. The integration of blockchain technology for real-world asset securitization promises to add a layer of unprecedented value and liquidity for global investors interested in stable and secure yields.
Will Tokenization Manage to Transform the Private Credit Market?
However, tokenized debt markets have accelerated notably during the year 2025, tripling to reach $9.21 billion according to recent data. Major asset managers like BlackRock are already leading the on-chain Treasury bond space. ETHZilla’s entry into automotive credit follows this bullish trend, where tokenized private credit consolidates as one of the segments with the highest growth and adoption within the digital financial ecosystem.
To conclude, the strategic collaboration between ETHZilla and Karus marks an important milestone in the convergence of traditional and decentralized finance. The first tokenized portfolios are expected to be operational and available by early 2026. Thus, the company positions itself to capitalize on institutional demand, creating high-quality income-generating assets that will be accessible to a much broader and more diversified investor base.
