Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066338
Chunk: 21

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 21
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 in blockchain platforms and digital assets
that utilize consensus mechanisms other than proof-of-work mining, which is employed by the Bitcoin network. For example, in late 2022,
the Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly
less computing power than proof-of-work mining. Other alternative digital assets include “stablecoins,” which are designed
to maintain a constant price because of their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar deposits
and short-term U.S. treasury securities) equal to the total value of stablecoins in circulation.

Additionally, central banks in some countries have
started to introduce digital forms of legal tender. For example, China’s central bank digital currency (“CBDC”) project
was made available to consumers in January 2022, and governments including the United States and the European Union have discussed the
potential creation of new CBDCs. For a discussion of risks relating to the emergence of other digital assets, see “Risk Factors
– Risks Related to Our Bitcoin Strategy and Holdings—The emergence or growth of other digital assets, including those with
significant private or public sector backing, could have a negative impact on the price of bitcoin and adversely affect our business.”

Our bitcoin strategy generally involves from time
to time, subject to market conditions, (i) issuing debt or equity securities or engaging in other capital raising transactions with the
objective of using the proceeds to purchase bitcoin and (ii) acquiring bitcoin with our liquid assets that exceed working capital requirements.
When we engage in such capital raising transactions, we compete for capital with, among others, ETPs, bitcoin miners, digital assets exchanges,
other digital assets service providers, other companies that hold bitcoin or other digital assets as treasury reserve assets, private
funds that invest in bitcoin and other digital assets, and similar vehicles. An increase in the competition for sources of capital could
adversely affect the availability and cost of financing for our bitcoin purchases, and thereby could adversely affect the market price
of our listed securities.

We hold substantially all of our bitcoin in custody
accounts at U.S.-based, institutional-grade custodians that have demonstrated records of regulatory compliance and information security.
As a result, the primary counterparty risk we are exposed to with respect to our bitcoin is performance obligations under the various
custody arrangements into which we have entered. We custody our bitcoin across multiple custodians to diversify our potential risk exposure
to any one custodian. Our