ETHZilla (ETHZ) has launched a tokenized aviation asset, marking a major step in its plans to bring income-generating real-world assets to Ethereum.
ETHZilla announced on Thursday that the newly issued Euros Aero Token I enables accredited investors to receive leasing revenue from two commercial jet engines currently used by a major U.S. airline.
The deal, conducted through ETHZilla’s newly formed ETHZilla Aerospace LLC subsidiary, converts a traditional institutional asset (aircraft engine leasing) into fractional tokens.
Each $100 of tokens represents a claim on a monthly lease payment, with an expected annual return of approximately 11%, the company said. ETHZilla acquired Jet Engine late last month for $12.2 million.
The tokens are issued on Ethereum Layer 2 and distributed through Liquidity.io, a platform powered by ETHZilla.
Many companies purchase and lease jet engines to aircraft operators. These companies lease these engines as spare parts to ensure continued operations in the event of a main engine failure. Companies such as AerCap, Willis Lease and SMBC Aero Engine Lease are involved in the business.
This marks a shift from ETHZilla’s previous focus on being a cryptocurrency vault. The company sold more than $114 million in ETH last year and shifted its funds toward tokenized assets such as home loans, car loans and now aerospace equipment. The company still has 69,802 ETH ($136.5 million).
Eurus tokens are protected by the engine, lease contracts and insurance, with allocations built directly into smart contracts.
The leases run until 2028 and include a purchase and sale agreement that returns additional capital to investors at the end of the term. ETHZilla plans to expand the model to other asset classes, the company wrote.