Company: DEFI
Filing Date: 2025-03-25
Form Type: POS AM
Source: 0001999371-25-003118
Chunk: 109

Company: Tidal Commodities Trust I
Filing Date: 2025-03-25
Form: POS AM
Chunk 109
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The Sponsor employs a passive investment
strategy intended to track the changes in the Benchmark regardless of whether the Benchmark goes up or goes down, meaning that
the Sponsor will not try to “beat” the Benchmark. The Fund’s passive investment strategy is designed to permit
investors generally to purchase and sell the Fund’s Shares for the purpose of investing indirectly in the bitcoin market
in a cost-effective manner. The Sponsor endeavors to manage the Fund’s investments so that the Fund’s average daily
tracking error against the Benchmark will be less than 10 percent over any period of 30 trading days. However, the Fund incurs
certain expenses in connection with its operations, which cause imperfect correlation between changes in the Fund’s NAV and
changes in the Benchmark because the Benchmark does not reflect expenses or income. As a result, investors may incur a partial
or complete loss of their investment even when the performance of the Benchmark is positive.

As an example, assume that a Creation Basket
is sold by the Fund, and that the Fund’s closing NAV per Share is $25.00. In that case, the Fund would receive $250,000 in
proceeds from the sale of the Creation Basket ($25.00 NAV per Share multiplied by 10,000 Shares and ignoring the Creation Basket
fee of $300). If one were to assume further that in accordance with the Fund’s policy, the Sponsor wants to invest at least
95% of the entire proceeds from the Creation Basket in bitcoin and up to 5% in Bitcoin Futures Contracts and that the market value
of each such Bitcoin Futures Contract is $188,175 and bitcoin price is $37,635 (or otherwise not a round number), the Fund would
be unable to buy an exact number of Bitcoin Futures Contracts with an aggregate market value equal to $250,000. In this case, the
Fund would be able to purchase 1 BTC Contract with an aggregate market value of approximately $188,175 and 16 MBT Contracts (each
of which represent 0.10 bitcoin) at $3,763 per contract with an aggregate market value of approximately $60,208, bringing the aggregate
value of proceeds to $248,383. To purchase the bitcoins, the Fund would then engage in an Exchange for Physical (EFP) transaction
on CME to trade 1 BTC Contract and 14 MBT Contracts for an equivalent position of 6.4 bitcoins (equivalent to $239,136.5., assuming
for simplicity that