ETHZilla has made a significant move by acquiring two CFM56-7B24 aircraft engines for $12.2 million. This purchase was executed through its newly formed subsidiary, ETHZilla Aerospace LLC, following a substantial liquidation of its Ethereum (ETH) holdings, totaling $114.5 million over recent months.
The engines are currently leased to a major airline under a management agreement with Aero Engine Solutions. This strategic acquisition reflects ETHZilla”s shift towards the tokenization of real-world assets utilizing blockchain technology, a trend gaining traction in the aerospace sector.
According to a recent filing with the U.S. Securities and Exchange Commission, the transaction includes a buy-sell option agreement, allowing either party to engage in the purchase or sale of the engines for $3 million each, contingent on meeting specified conditions upon lease expiration.
The aircraft engine leasing market is expanding rapidly. Airlines often lease spare engines to ensure operational consistency, especially when primary engines require maintenance. Key players in this market include AerCap and Willis Lease Finance Corporation. The International Air Transport Association projects that airlines will spend approximately $2.6 billion on spare engine leases in 2025, with the global market expected to grow from $11.17 billion in 2025 to $15.56 billion by 2031, representing a compound annual growth rate of 5.68 percent.
Despite the promising market, ETHZilla”s shares have suffered a decline of about 97 percent from their peak in August 2024. The company utilized $40 million from its Ethereum holdings in October for a stock buyback program, and an additional $74.5 million in ETH was liquidated in December to address outstanding debts. Digital asset treasury companies like ETHZilla have faced challenges, often trading below their net asset value.
This engine acquisition is part of a broader initiative by ETHZilla to tokenize various real-world assets. The company is collaborating with Liquidityio, a regulated broker-dealer and SEC-registered alternative trading system, to develop a pipeline for tokenizing assets such as aircraft engines, auto loans, and manufactured home loans. ETHZilla also holds a 15 percent stake in Zippy, a provider of manufactured home loans, aiming to tokenize these loans as compliant, tradable instruments.
Additionally, the firm has invested in Karus, an auto finance platform, with similar goals of blockchain integration. In a recent communication on social media, ETHZilla outlined its vision: “We”re building a scalable tokenization pipeline across asset classes with predictable cash flows and global investor demand.” The first tokenized asset offerings are anticipated to launch in the first quarter of 2026, marking a significant pivot from traditional cryptocurrency treasury management towards blockchain-based asset tokenization.
