ETHZilla, one of the largest Ethereum treasuries in the United States, is entering the housing market with a recent partnership, further expanding its move toward real-world assets.
The technology company announced a deal Wednesday with Zippy, a digital lending platform, that will bring
"We believe that Zippy has built an institutional-grade lending and servicing platform with a modern data architecture that enables both large scale investor participation and efficient on-chain distribution, which is expected to help unlock access to the estimated $14 billion manufactured home financial services market," said McAndrew Rudisill, chairman and CEO of ETHZilla, in a press release.
ETHZilla will acquire a 15% fully diluted ownership stake in Zippy for $5 million in cash and $14 million in shares of common stock payable to Zippy and $2.1 million in shares of common stock issuable to certain individual shareholders of Zippy as part of the deal.
Zippy had multiple other offers from both private equity and corporate suitors, as many wanted access to the high-single-digit yields, Rudisill told National Mortgage News.
"ETHZilla's blockchain infrastructure gives Zippy the ability to turn its chattel assets into an accessible, technology-driven investment vehicle," said Ben Halliday, cofounder and CEO of Zippy, in a press release. "By combining our community-focused lending platform with ETHZilla's tokenization engine, we believe we can accelerate America's most cost-effective housing option while opening access for investors to participate in a market that has been dominated by privately held companies for decades."
Private equity has
While that's important to ETHZilla, it is primarily involved in the space due to size and performance of the mortgages. The mortgages are smaller than that of a single-family home, with equal or better performance because of higher interest rates, creating an attractive yield for investors, Rudisill said.
"We believe that manufactured homes represent an affordable housing solution, a compelling yield opportunity, and an ideal fit for our on-chain securitization framework," Rudisill said. "With this transaction, we plan to move our business model directly into the home-lending market, which we expect will position ETHZilla as a leading player in US on-chain home finance with only one significant competitor."
The company's strategy to bring real-world assets onto Ethereum also includes auto loans, structured credit, equipment and real estate. ETHZilla previously invested in the parent company of Liquidity.io, a Financial Industry Regulatory Authority-regulated alternative trading system for tokenized private credit and real assets, and Karus, which provides AI-driven risk forecasting and loan-level cash-flow analytics for structured auto credit, according to the release.
ETHZilla's focus will be on heavy equipment and real estate next year, Rudisill said.
Zippy originates secured loans backed by manufactured homes through its platform, which connects homebuyers directly with home sellers, reduces costs to produce, accelerates closing timelines, expands access to credit and improves risk and compliance accuracy, the release said.
Zippy has been
