ETHZilla (ETHZ) has unveiled a tokenized aviation asset, marking an important step in its plan to bring income-generating real-world assets to Ethereum.
The new offering, Eurus Aero Token I, provides accredited investors with access to leasing income from two commercial aircraft engines currently in use by a major US airline, ETHZilla announced on Thursday.
The deal, executed through ETHZilla’s newly formed subsidiary ETHZilla Aerospace LLC, converts a traditionally institutional asset, aircraft engine leasing, into fractional tokens.
Each $100 token represents a claim on monthly lease payments, with expected annual returns of around 11%, according to the company. ETHZIlla acquired the jet engines for $12.2 million late last month.
The tokens are issued on Ethereum Layer 2 and distributed through Liquidity.io, a platform that ETHZilla has supported.
Several companies buy and lease jet engines to aircraft operators. Companies rent these engines as spare parts to ensure their operations can continue if their main engines fail. Companies such as AerCap, Willis Lease and SMBC Aero Engine Lease are involved in the business.
This marks a change from the previous focus on ETHZilla as a crypto treasure. The company sold more than $114 million in ETH last year and redirected its capital into tokenized assets such as home loans, auto loans, and now aerospace equipment. The company still holds 69,802 ETH ($136.5 million).
Eurus tokens are collateralized by engines, leases and insurance, and distribution is built directly into smart contracts.
The leases extend through 2028 and include a purchase-sale agreement that could return additional capital to investors at the end of the term. ETHZilla plans to expand this model to other asset classes, the firm wrote.
