Former biotech company ETHZilla (ETHZ) is significantly increasing its presence in real-world asset markets with a new 15% stake in digital housing lender Zippy. This strategic investment aims to bring manufactured-home loans onto the blockchain through tokenization. This acquisition follows another significant deal made by ETHZilla within the past week.
The agreement, announced on Wednesday, details that ETHZilla will acquire its 15% stake in Zippy for a combination of $5 million in cash and $16.1 million in company stock. Zippy, a United States-based lender established in 2021, specializes in originating manufactured-home loans via a digital platform.
The partnership intends to integrate Zippy’s loan origination processes and artificial intelligence-powered systems with ETHZilla’s tokenization technology. This integration will facilitate the on-chain distribution of manufactured-home chattel loans, opening possibilities for forward-flow sales to institutional investors.
As part of this transaction, ETHZilla will secure a seat on Zippy's board of directors. Additionally, the agreement includes a 36-month exclusivity period, during which Zippy is obligated to conduct all its blockchain infrastructure development, digital asset issuance, and tokenization activities exclusively through ETHZilla's platforms.
ETHZilla, recognized as the sixth-largest company holding Ether (ETH) in its treasury according to CoinGecko data, stated that this investment aligns with its broader strategy to expand into real-world asset (RWA) markets.
This announcement arrives just one week after ETHZilla completed the acquisition of a 20% fully diluted stake in the auto-finance startup Karus, a deal valued at $10 million in cash and stock.
At the time of writing, ETHZilla's stock price had experienced a decline of approximately 10%, based on data from Yahoo Finance.
Ether Treasury Stocks Face Significant Declines
Several publicly traded companies that have incorporated Ether into their balance sheets this year have witnessed substantial reversals in their stock prices. This trend has occurred as the price of Ether has fallen from its previous highs, impacting companies like ETHZilla.
ETHZilla, formerly known as 180 Life Sciences Corp, announced its strategic shift to becoming an Ether treasury company on July 29. Following this announcement, its stock price saw a significant increase, opening at $45 and closing at $107 by August 13. However, the stock has since depreciated by roughly 91%, currently trading around $10 at the time of this report.
SharpLink Gaming also launched an Ether treasury strategy in May. This initiative was accompanied by a $425 million private placement that included Consensys as an investor and coincided with the nomination of Ethereum co-founder Joseph Lubin as its chairman.
The company's stock initially surged by over 130% following this news, reaching $79.21 on May 29. However, it has since experienced a sharp decline and was trading around $11.77 on Wednesday, according to Yahoo Finance data.
Bitmine Immersion, an Ether treasury company led by Fundstrat’s co-founder Tom Lee, has also faced challenges in recent months. After reaching an all-time high of $135 in July, its stock price has fallen to approximately $40 at present.
In August, Kadan Stadelmann, the chief technology officer at Komodo Platform, cautioned Cointelegraph that companies pursuing ETH treasury strategies face inherent structural risks. He warned that a market downturn could potentially trigger liquidations and exacerbate selling pressure on the Ether token.
Ether's price has declined since reaching its all-time high of $4,946.05 on August 24. Currently, it is trading at $3,365, according to CoinGecko data.