Company: DEFI
Filing Date: 2025-03-27
Form Type: 424B3
Source: 0001999371-25-003249
Chunk: 113

Company: Tidal Commodities Trust I
Filing Date: 2025-03-27
Form: 424B3
Chunk 113
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 or otherwise rely on information or
services from unregulated spot bitcoin trading platforms, but instead buys Bitcoin Futures Contracts with the purpose of using
them to acquire physical bitcoin through EFP transactions.

However, despite being subject to CME’s
oversight, the Sponsor cannot assure investors that each and every transaction will be subject to a thorough analysis by the CME.
The Sponsor notes that this approach is less prone to being affected by would-be manipulators than other mechanisms that are not
reported to a regulated market, but it does not completely eliminate the risk of fraud.

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EFP Transactions are privately negotiated
trades between two parties that allow for the simultaneous transfer of a futures position for an equivalent spot market position,
or vice versa. The Fund does not intend to trade on unregulated bitcoin spot exchanges. All transfers relating to purchases or
sales of bitcoin are settled via “on-chain” transactions represented on the bitcoin blockchain. The Fund can exchange
any maturities of either BTC or MBT Contracts in which the Fund has an open long position to engage in EFP trade to purchase bitcoin.
When selling bitcoin, the Fund will normally exchange it for a long position on the first to expire BTC Contracts and/or MBT Contracts.

Governed by CME Exchange Rule 538, EFP transactions
must be executed at commercially reasonable prices mutually agreed upon by the parties involved. All parties to an EFP are required
to prepare and maintain all documents related to both the futures and the corresponding physical bitcoin position, in accordance
with Commodity Futures Trading Commission (CFTC) Regulation 1.35. CME has the authority to obtain records related to EFRP transactions
and has a surveillance program in place to appropriately monitor and enforce compliance with its Market Regulation to prevent fraud
and manipulation.

Given that both sides of the trade track
the same benchmark (Bitcoin), an EFP is a market-neutral transaction. Therefore, the pricing of the EFP is quoted in terms of
the basis between the price of the futures contract and the level of the underlying bitcoin.

When the Sponsor decides to increase or
decrease its holdings of physical bitcoin, it will cause the Fund to execute an EFP trade with a liquidity provider (an “LP”).
The selection of those LPs is based on the objective of achieving the best execution for each transaction, in line with the Fund’s
investment strategy. As of the date of this prospectus, Cumberland DRW LLC, Flow Traders B.