ETHZilla’s recent move to buy a stake in the lending platform Karus, underscores how AI is transforming the finance process in new ways.
First things first: ETHZilla has taken a 20% stake in Karus in a $10 million deal that includes $3 million cash plus $7 million in ETHZilla stock, marking a significant turning point for the Ethereum-focused tech company, reports CoinDesk.
The 20% stake gains ETHZilla entry into the U.S. asset-backed securities market, using blockchain to tokenize real-world credit, specifically auto loans.
Karus uses AI models trained on 20M+ historical auto loan outcomes and has evaluated over $5B in loans, helping price and segment risk more precisely.
Integrating Karus’s AI underwriting and risk models with ETHZilla’s Ethereum-based infrastructure is designed to let those auto loans be turned into tradable on-chain tokens once the first portfolios launch.
Worth noting: ETHZilla also gets access to Karus’s network of 20,000-plus car dealerships, banks, and credit unions, giving it a big pipeline of loans to tokenize—as the tech company ramps up its broader push to turn real-world income-generating assets (like auto loans) into on-chain investment products.
Why it matters: More lenders are exploring AI-priced, tokenized funding lines that can approve and price risk in near real time, potentially beating traditional captives and banks on speed and niche approvals while still meeting their return targets. However, ushering in more global, fluid capital will likely raise fresh questions on compliance, transparency, and how F&I is sold in-store.
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Between the lines: Across the industry, AI, more specifically agentic AI—which instead of just answering questions based on prompts, can decide what to do next and actually do it—is not only beneficial for streamlining finance processes: the technology can also unlock new sources of value, according to a McKinsey & Company report.
Gen AI can cut operating costs enough to reduce cost-to-income ratios by 5–8 percentage points in auto finance, largely by streamlining and automating labor-intensive processes.
Sales/pricing agents dynamically set finance and leasing prices, optimize offers for B2C/B2B, and rely heavily on residual-value and risk models.
Bottom line: As lending players lean on AI agents to dynamically price, segment, and even renegotiate portfolios, dealerships that plug in could have an edge in capturing more approvals for unconventional customers.
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