Company: DDC
Filing Date: 2025-08-05
Form Type: F-3/A
Source: 0001213900-25-072059
Chunk: 22

Company: DDC Enterprise Ltd
Filing Date: 2025-08-05
Form: F-3/A
Chunk 22
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. We have in the past conducted, and expect to conduct in the future, supplemental due diligence when we believe it
is warranted by market circumstances or otherwise.

We negotiate specific contractual terms and conditions
with our custodians that we believe will help establish, under existing law, that our property interest in the bitcoin held by our custodians
is not subject to the claims of the custodian’s creditors in the event the custodian enters bankruptcy, receivership or similar
insolvency proceedings. All of our custodians are subject to regulatory regimes intended to protect customers in the event that a custodian
enters bankruptcy, receivership or similar insolvency proceedings. Based on existing law and the terms and conditions of our contractual
arrangements with our custodians, we 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