Company: DEFI
Filing Date: 2025-03-25
Form Type: POS AM
Source: 0001999371-25-003118
Chunk: 111

Company: Tidal Commodities Trust I
Filing Date: 2025-03-25
Form: POS AM
Chunk 111
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 price paid for the
offsetting sale or purchase, after allowance for brokerage commissions, constitutes the profit or loss to the trader.

If the price of the cryptocurrency increases
after the original futures contract is entered into, the buyer of the futures contract will generally be able to sell a futures
contract to close out its original long position at a price higher than that at which the original contract was purchased, generally
resulting in a profit to the buyer. Conversely, the seller of a futures contract will generally profit if the price of the underlying
bitcoin cryptocurrency decreases, as it will generally be able to buy a futures contract to close out its original short position
at a price lower than that at which the original contract was sold. Because the Fund seeks to track the Benchmark directly, the
Fund intends to hold only long positions in bitcoin futures contracts and intends to roll its Bitcoin Futures Contracts prior to
expiration via sales of existing long positions and the acquisition of new long positions as replacements for contracts sold. Futures
contracts are typically traded on futures exchanges (i.e. DCMs) such as the CME, which provide centralized market facilities in
which multiple persons may trade contracts. Members of a particular futures exchange and the trades executed on such exchange are
subject to the rules of that exchange. Futures exchanges and their related clearing organizations (i.e. DCOs) are given reasonable
latitude in promulgating rules and regulations to control and regulate their members.

Trades on a futures exchange are generally
cleared by the DCO, which provides services designed to mutualize or transfer the credit risk arising from the trading of contracts
on an exchange. The clearing organization effectively becomes the other party to the trade, and each clearing member party to the
trade looks only to the clearing organization for performance.

Bitcoin Futures Contracts

CME began offering trading in BTC Contracts
in 2017 (and in MBT Contracts in 2021). The CME needed a transparent and readily available way to determine the price of bitcoin
for its futures contract customers. However, there are numerous exchanges on which one can buy and sell bitcoin, and the prices
of bitcoin can differ greatly from exchange to exchange. CME wanted to use pricing information from what it considered to be reputable
bitcoin exchanges to calculate a once-a-day reference rate of the U.S. dollar price of bitcoin.

The CME developed the CME CF Bitcoin Reference
Rate (the “BRR”) to serve these purposes. Each of the BTC and MBT contract’s final daily