Company: DDC
Filing Date: 2025-07-22
Form Type: F-3
Source: 0001213900-25-066338
Chunk: 23

Company: DDC Enterprise Ltd
Filing Date: 2025-07-22
Form: F-3
Chunk 23
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 believe that the bitcoin held on our behalf by our custodians would not be considered part of a custodian’s
bankruptcy estate were one or more of our custodians to enter bankruptcy, receivership or similar insolvency proceedings. For a discussion
of risks relating to the custody of our bitcoin, see “Item 1A. Risk Factors—Risks Related to Our Bitcoin Strategy and Holdings—Our
bitcoin strategy exposes us to various risks, including risks associated with bitcoin,” and “—Our bitcoin strategy exposes
us to risk of non-performance by counterparties.”

We believe that bitcoin is an attractive asset
because it can serve as a store of value, supported by a robust and public open-source architecture, that is untethered to sovereign monetary
policy. We also believe that, due to its limited supply, bitcoin offers the potential to serve as a hedge against inflation in the long-term
and, if its adoption increases, the opportunity for appreciation in value.

Bitcoin exists entirely in electronic form, as
virtually irreversible public transaction ledger entries on the blockchain, and transactions in bitcoin are recorded and authenticated
not by a central repository, but by a decentralized peer-to-peer network. This decentralization mitigates the risks of certain threats
common to centralized computer networks, such as denial-of-service attacks, and reduces the dependency of the bitcoin network on any single
system. The decentralization of user nodes and miners also mitigates the risk of a 51% attack, which would be very costly and difficult
to execute with respect to bitcoin because the Bitcoin network is open source and widely distributed, and transactions on the blockchain
require significant computing power to be validated.

However, while the Bitcoin network as a whole is
decentralized, the private keys used to access bitcoin balances are not widely distributed and are susceptible to phishing and other attacks
designed to obtain sensitive information or gain access to password-protected systems. Loss of such private keys can result in an inability
to access, and effective loss of, the corresponding bitcoin. Consequently, bitcoin holdings are susceptible to certain risks inherent
in holding any electronic data, such as data corruption, security breach, communication failure and user error, among others. These risks,
in turn, make bitcoin substantially more susceptible to theft, destruction, or loss of value from hackers, corruption, viruses and other
technology-specific factors as compared to conventional fiat currency or other conventional financial assets. See “Item 1A. Risk
Factors—Risks Related to Our Bitcoin Strategy and Holdings—If