Company: DEFI
Filing Date: 2025-02-21
Form Type: POS AM
Source: 0001839882-25-010345
Chunk: 118

Company: Tidal Commodities Trust I
Filing Date: 2025-02-21
Form: POS AM
Chunk 118
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 50 bitcoins
in exchange for 10 units of the next maturity of BTC Contracts. The Sponsor will select an LP that it believes will provide the
best execution opportunity for the proposed EFP trade. The LP will provide bid/ask quotes for the EFP transaction as a basis spread
against the settlement price of the BTC Contract to determine the price of the physical bitcoin that will be exchanged in the physical
leg of the EFP. Then, assume that the Sponsor determines that the best option for the Fund is a bid of +25 bps. Assuming that the
daily settlement price of the relevant BTC Contract was $26,060, the price for the physical leg of the EFP transaction agreed upon
by the Fund and the LP is $25,995.01. Upon completion of the EFP transaction, the Fund and the LP will have different positions,
but the same financial exposure:

| ● | Before the transaction, the Fund was long 10 BTC Contracts; after the transaction, it has converted this exposure into 50 physical 
 bitcoins.                                                                                                                          |

| ● | Before the transaction, the LP had 50 bitcoins; after the transaction, it holds an equivalent position long in 10 BTC Contracts. |

The table below illustrates
the steps in this EFP transaction:

| Steps                                                                                              | LP                                                     | Fund              |
| 1. Starting position                                                                               | 50 bitcoins                                            | 10 BTC Contracts  |
| 2. EFP transaction is negotiated between the LP and the Fund                                       | The LP and the Fund agree to terms of the EFP, namely: 
 ● Fund sells / LP buys 10 BTC Contracts at $26,060     
 ● Fund buys / LP sells 50 bitcoins at 25,995.01        
 (basis spread of +25bps)                               |                   |
| 3. LP sends bitcoin to the Fund                                                                    | -50 bitcoins                                           | +50 bitcoins      |
| 4. The EFP transaction is reported to CME and the LP assumes the long position in 10 BTC Contracts | +10 BTC Contracts                                      | -10 BTC Contracts |
| 5. Final position                                                                                  | 10 BTC Contracts                                       | 50 bitcoins       |

As an EFP is a privately negotiated off-exchange,
the CME allows it to be executed at a mutually agreed price, but it requires that such price be commercially reasonable. EFP transactions
fall under the governance of CME Exchange Rule 538, stipulating that these transactions must be conducted at commercially reasonable
prices