Company: DEFI
Filing Date: 2025-03-17
Form Type: S-1/A
Source: 0001387131-25-000058
Chunk: 164

Company: Tidal Commodities Trust I
Filing Date: 2025-03-17
Form: S-1/A
Chunk 164
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. With respect to the Fund’s investments in Carbon Credit Futures, The Sponsor causes the Fund to transfer the proportional amount of proceeds of the sale of Creation Baskets to the Non-Digital Custodian or another financial institution for use in trading activities and/or investment in Carbon Credit Futures and cash and cash equivalents. When the Fund purchases Carbon Credit Futures, the Fund is required to deposit with the FCM on behalf of the exchange a portion of the value of the contract or other interest as security to ensure payment for the obligation under the Carbon Credit Futures at maturity. This deposit is known as initial margin. The Sponsor invests the Fund’s assets that remain after margin and collateral is posted in cash and cash equivalents. Subject to these margin and collateral requirements, the Sponsor has sole authority to determine the percentage of assets that will be: (i) held as margin or collateral with the FCM or other custodian; (ii) used for other investments; and (iii) held in bank accounts to pay current obligations and as reserves. In general, the Fund expects that it will be required to post approximately 10% to 20% of the notional amount of a Carbon Credit Future as initial margin when entering into such contract. Ongoing margin and collateral payments will generally be required based on changes in the value of the Carbon Credit Futures. Cash and cash equivalents held by the Fund constitute reserves that are available to meet ongoing margin and collateral requirements. All interest or other income is used for the Fund’s benefit. An FCM, counterparty, government agency or commodity exchange could increase margin or collateral requirements applicable to the Fund to hold trading positions at any time. Moreover, margin is merely a security deposit and has no bearing on the profit or loss potential for any positions held. The Fund’s assets that are used to post the approximate 10% to 20% of notional value for margin held by the FCM are held in segregation pursuant to the CEA and CFTC regulations. For purposes of creation and redemption orders for Carbon Credit Futures, the settlement price on the primary exchange will be used.

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In connection with a Redemption Order (as defined below), the Sponsor, on behalf of the Fund, is responsible for selling bitcoin and Carbon Credit Futures in an amount equal to the value of the Basket. When seeking to sell bitcoin, the Sponsor will seek to sell bitcoin at prices as close to the Bitcoin Price as practical on terms from any of the approved Bitcoin Trading Counterparties. Once agreed upon, the transaction