Company: DEFI
Filing Date: 2025-03-27
Form Type: 424B3
Source: 0001999371-25-003249
Chunk: 112

Company: Tidal Commodities Trust I
Filing Date: 2025-03-27
Form: 424B3
Chunk 112
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contracts. A margin deposit is like a cash performance bond. It helps assure the trader’s performance of the futures contracts
that he or she purchases or sells. Futures contracts are customarily bought and sold on initial margin that represents a small
percentage of the aggregate purchase or sales price of the contract. The amount of margin required in connection with a particular
futures contract is set by the exchange on which the contract is traded. Brokerage firms, such as the Fund’s clearing broker,
carrying accounts for traders in bitcoin interest contracts may require higher amounts of margin as a matter of policy to further
protect themselves.

Futures contracts are marked to market at
the end of each trading day and the margin required with respect to such contracts is adjusted accordingly. This process of marking
to market is designed to prevent losses from accumulating in any futures account. Therefore, if the Fund’s futures positions
have declined in value, the Fund may be required to post “variation margin” to cover this decline. Alternatively, if
the Fund’s futures positions have increased in value, this increase will be credited to the Fund’s account.

The Fund’s Investments in Spot Bitcoin

The Fund’s investment strategy also
includes direct investments in bitcoin, commonly referred to as “spot bitcoin”. The Fund’s position in bitcoin
is purchased and sold through CME’s Exchange for Physical Transactions and is held by the Bitcoin Custodian on behalf of
the Fund.

Purchases and Sales of Spot Bitcoin

The Fund will, under normal market conditions,
frequently increase or decrease its holdings of physical bitcoin as Shares are created and redeemed. The Fund acquires and disposes
of physical bitcoin only through EFP transactions on the CME Bitcoin Futures Market, which take place under the regulatory oversight
of the CME, a CFTC-regulated market.

The Sponsor believes that by acquiring physical
Bitcoin through EFP transactions, the Fund will significantly mitigate the risk of fraud and manipulation. In using EFP transactions,
the Sponsor expects that the Fund will provide investors with bitcoin exposure that is more resistant to fraud and manipulative
practices than comparable products that seek to rely on unregulated trading platforms. In particular, to avoid any exposure to
potential manipulation from actors operating on unregulated trading platforms, although the Fund holds bitcoin, the Fund’s
NAV is calculated using a bitcoin price derived from the price of Bitcoin Futures Contracts, and the Fund purchases and sells bitcoin
exclusively via EFP transactions on the CME Bitcoin Futures Market. The Fund does not trade