Company: DEFI
Filing Date: 2025-03-27
Form Type: 424B3
Source: 0001999371-25-003249
Chunk: 18

Company: Tidal Commodities Trust I
Filing Date: 2025-03-27
Form: 424B3
Chunk 18
---
 all documents related to both the futures and the corresponding physical bitcoin position, in accordance with CFTC Regulation 1.35. CME has the authority to obtain records related to EFP transactions and has a surveillance program in place to appropriately monitor and enforce compliance with its Market Regulation to prevent fraud and manipulation.

Given that both sides of the trade track the same benchmark (Bitcoin), an EFP is a market-neutral transaction. Therefore, the pricing of the EFP is quoted in terms of the basis between the price of the futures contract and the level of the underlying bitcoin.

When the Sponsor decides to increase or decrease its holdings of physical bitcoin, it will cause the Fund to execute an EFP trade with a liquidity provider (an “LP”). The selection of those LPs is based on the objective of achieving the best execution for each transaction, in line with the Fund’s investment strategy. As of the date of this prospectus, Cumberland DRW LLC, Flow Traders B.V., JSCT, LLC, XBTO International Ltd., DV Chain, LLC, GSR Markets Ltd. B2C2 USA, Inc. and Nonco LLC have been approved as LPs. Jane Street Capital, LLC, one of the Authorized Purchasers, is an affiliate of JSCT, LLC, one of the LPs. Current or future LPs may be affiliates or, or have material relationships with, the Fund’s current or future Authorized Purchasers.

The Fund and the LP will simultaneously exchange a futures position for a corresponding, economically offsetting position in physical bitcoin. Specifically, when the Sponsor intends to increase the Fund’s bitcoin holdings, the Fund will participate in an EFP transaction to sell futures contracts and buy physical bitcoin, while the LP participating in such transaction will buy futures contracts and sell physical bitcoin. Similarly, when the Sponsor seeks to decrease the Fund’s bitcoin holdings, the Fund will participate in an EFP transaction to buy futures contracts and sell physical bitcoin, while the LP on the other side of the transaction will sell futures contracts and buy physical bitcoin.

In order to ensure best execution and ensure that transactions are executed at commercially reasonable prices when the Fund needs to purchase or sell spot bitcoin, the Sponsor will conduct a Request-for-Quote (“RFQ”) auction with multiple LPs using the current day settlement price as the reference for the Futures Contracts. The Sponsor may use electronic means such as the Directed Request for Quote (DRFQ) available in the CME Direct, chat services or any other communication mechanism that is compatible with CME’s and