The former biotechnology company ETHZilla (ETHZ) is intensifying its layout in the physical asset market by acquiring a 15% stake in the digital housing loan institution Zippy, bringing the manufactured housing loan business into the on-chain ecosystem. This marks the company's second acquisition deal completed within a week.
An announcement released on Wednesday indicated that ETHZilla will pay $5 million in cash and $16.1 million in stock to acquire a 15% stake in Zippy. Zippy, established in 2021, is a U.S. lending institution that issues manufactured housing loans through a digital platform.
The two companies plan to combine Zippy's loan issuance system and AI-driven technology with ETHZilla's tokenization technology stack to achieve on-chain distribution of manufactured housing mortgages, including potential forward flow sales aimed at institutional investors.
As part of the deal, ETHZilla will secure a board seat at Zippy and lock in a 36-month exclusive collaboration period, requiring Zippy to conduct all blockchain infrastructure construction, digital asset issuance, and tokenization business through the ETHZilla platform.
According to CoinGecko, ETHZilla is the sixth-largest ETH treasury company. The company noted that this investment is a significant component of its broader strategic layout in the real-world asset (RWA) market.
A week prior to the announcement, ETHZilla had spent $10 million (cash plus stock) to acquire a fully diluted 20% stake in the auto finance startup Karus.
According to Yahoo Finance data, ETHZilla's stock price had dropped about 10% at the time of writing.
Several publicly listed companies that incorporated ETH into their balance sheets have experienced significant stock price volatility as token prices have retreated from their peaks, with ETHZilla being one of them.
ETHZilla (formerly 180 Life Sciences Corp) announced its transformation into an ETH treasury company on July 29. The company's stock price rose from an opening price of $45 that day to $107 at the close on August 13. However, the stock price subsequently plummeted by about 91%, currently trading at around $10.
SharpLink Gaming launched its Ethereum treasury strategy in May while completing a $425 million private placement, with investors including Consensys, coinciding with the news of Ethereum co-founder Joseph Lubin being nominated as chairman.
According to Yahoo Finance data, the company's stock surged over 130% after the announcement, reaching a high of $79.21 on May 29, but has since significantly retraced, trading at about $11.77 on Wednesday.
Bitmine Immersion, an Ethereum treasury company led by Fundstrat co-founder Tom Lee, has also performed poorly in recent months. Its stock reached a historical high of $135 in July but has now fallen to around $40.
Kadan Stadelmann, Chief Technology Officer of Komodo Platform, pointed out in an August interview with Cointelegraph that companies adopting the ETH treasury strategy face structural risks and warned that a market downturn could force these companies into liquidation, further exacerbating the sell-off pressure on the token.
According to CoinGecko data, ETH has continued to decline since reaching an all-time high of $4,946.05 on August 24, currently trading at $3,365.
Related: Abu Dhabi sovereign fund Mubadala Capital is exploring ways to open private market investment channels through tokenization.
Original text: “ETHZilla Enters On-Chain Housing Finance Sector by Acquiring 15% Stake in Zippy”
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