ETHZilla has launched a novel blockchain-based structure after acquiring two CFM56 commercial jet engines, valued at $12.2 million total. The engines are on lease to a leading US carrier.
The structure introduces the first-ever tradable tokenized aviation assets on the Ethereum network.
Eurus Aero Token I is a tokenized real-world asset instrument. It allows investors to gain exposure to aircraft engines through tradable digital tokens that represent contractual revenue rights.
Under the structure, the engines generate monthly cash receipts that include base rent and utilisation-based payments, with distributions expected to be made monthly to token holders.
The leases extend into 2028, with the carrier handling maintenance and servicing during that time and a post-lease completion will be completed by Aero Engine Solutions.
The lease also includes customary protections and a $3 million put/call at lease end with the engine services provider.
“By structuring the investment around defined lease terms and customary contractual and operational protections, ETHZilla Aerospace is offering a transparent, income-oriented alternative to traditional private aerospace leasing structures,” the company said in a statement.
The structure uses Layer 2 (L2) protocols on the Ethereum network, which enables on-chain verification of token holders, automated distributions, and a regulated framework. This essentially allows investors of the engine tokens to receive their share of lease payments in a safe and verifiable way.
The financial technology company said this new structure aims to modernise access to investing in real-world assets.
ETHZilla launched its wholly owned special purpose subsidiary ETHZilla Aerospace as part of the Euros Aero Token I launch. This also marks the company's entry into the aerospace industry.
“Offering a token backed by engines leased to one of the largest and most profitable US airlines serves as a strong use case in applying blockchain infrastructure to aviation assets with contracted cash flows and global investment demand,” said ETHZilla chairman and CEO McAndrew Rudisill. “The Eurus Aero Token I expands investment access and modernizes fractional asset ownership in markets that have historically been available only to institutional credit and private equity.”
ETHZilla said it expects to launch Ethereum L2 tokens for additional asset classes in the near future, including manufactured home loans and car loans through its existing agreements with Zippy and Karus.
In 2024, both Novus Aviaton Capital and VMIC had signed separate MoUs with MANTRA and IX Swap, respectively, to explore aviation tokenization. This was examined in Airline Economics Issue 82.