SEC Filing Document

Company: Canary Staked TRX ETF
Ticker: 
CIK: 2064768
Filing Type: S-1
Document Type: S-1
Date Filed: 2025-04-18
Accession Number: 0001999371-25-004423
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2064768/000199937125004423/canary-s1_041825.htm

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the speed and throughput of digital asset transactions. As corresponding increases in throughput lag behind growth in the use of digital asset networks, average resource costs and settlement times may increase considerably. Since inception, Tron Network transaction costs have been based on a variable model that uses Bandwidth and Energy resources, rather than fixed gas fees. If a user lacks sufficient resources, TRX is burned to complete the transaction. Increased resource costs and delayed transaction finality could preclude certain use cases for TRX (e.g., micropayments) and could reduce demand for, and the price of, TRX, which could adversely impact the value of the Shares. There is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement of Tron Network transactions will be effective, or how long such mechanisms will take to become effective, which could adversely impact the value of the Shares.

The rapid development
of competing scalability solutions—including those that process most transaction execution, smart contract computation, and application
logic off the Layer 1 blockchain—has given rise to alternatives to on-chain scaling. While the Tron Network does not currently support
a formal Layer 2 ecosystem akin to rollups, it has implemented sidechain infrastructure, such as the BitTorrent Chain (BTTC), which facilitates
cross-chain transactions and offloads activity from the main network. Sidechains allow smart contracts and decentralized applications
to operate independently, with periodic settlement onto the Layer 1 TRX Blockchain. If a widely adopted scaling solution (e.g., a sidechain
like BTTC) were to suffer a technical failure, loss of user confidence, or regulatory constraint, it could reduce demand for TRX by disrupting
a key source of transactional volume. Any of the foregoing scenarios could adversely impact the market price of TRX or the value of the
Shares of the Trust.

If The Digital
Asset Award Or Transaction Fees For Recording Transactions On The Tron Network Are Not Sufficiently High To Incentivize Validators, Or
If Certain Jurisdictions Continue To Limit Or Otherwise Regulate Validating Activities, Validators May Cease Expanding Validating Power
Or Demand High Transaction Fees, Which Could Negatively Impact The Value Of TRX And The Value Of The Shares.

If the digital asset
awards for validating blocks or the transaction fees for recording transactions on the Tron Network are not sufficiently high to incentivize
validators, or if certain jurisdictions continue to limit or otherwise regulate validating activities, validators may cease expending
validating power to validate blocks and confirmations of transactions on the TRX Blockchain could be slowed. For example, the realization
of one or more of the following risks could materially adversely affect the value of the Shares:

•	A significant reduction in the price of TRX could enable a malicious actor or botnet
(a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) to accumulate
enough TRX that could be staked to obtain control of the Tron Network. See “Risk Factors—Risks Associated with TRX and the
Tron Network— The TRX Blockchain could be vulnerable to attacks on transaction finality and consensus processes, which could adversely
affect an investment in the trust or the ability of the trust to operate. ”

•	Validators have historically accepted relatively low transaction confirmation fees
on most digital asset networks. If validators demand higher transaction fees for recording transactions in the TRX Blockchain or a software
upgrade automatically charges fees for all transactions on the Tron Network, the cost of using TRX may increase and the marketplace may
be reluctant to accept TRX as a means of payment. Alternatively, validators could collude in an anti-competitive manner to reject low
transaction fees on the Tron Network and force users to
pay higher fees, thus reducing the attractiveness of the Tron Network. Higher transaction confirmation fees resulting through collusion
or otherwise may adversely affect the attractiveness of the Tron Network, the value of TRX and the value of the Shares.

•	To the extent that any validators cease to record transactions that do not include
the payment of a transaction fee in blocks or do not record a transaction because the transaction fee is too low, such transactions will
not be recorded on the TRX Blockchain until a block is validated by a validator who does not require the payment of transaction fees or
is willing to accept a lower fee. Any widespread delays or disruptions in the recording of transactions could result in a loss of confidence
in the Tron Network and could prevent the Trust from completing transactions associated with the day-to-day operations of the Trust, including
creations and redemptions of the Shares in exchange for TRX with Authorized Participants.

•	During the course of ordering transactions and validating blocks, validators may
be able to prioritize certain transactions in return for increased transaction fees, an incentive system known as “Maximal Extractable
Value” or MEV. For example, in blockchain networks that facilitate DeFi protocols in particular, such as the Tron Network, users
may attempt to gain an advantage over other users by increasing offered transaction fees. Certain software solutions, such as Flashbots,
have been developed which facilitate validators in capturing MEV produced by these increased fees. The MEV incentive system may lead to
an increase in transaction fees on the Tron Network, which may diminish its use. Users or other stakeholders on the Tron Network could
also view the existence of MEV as unfair manipulation of decentralized digital asset networks, and refrain from using DeFi protocols or
the Tron Network generally. In addition, it’s possible regulators or legislators could enact rules which restrict the use of MEV,
which could diminish the popularity of the Tron Network among users and validators. Any of these or other outcomes related to MEV may
adversely affect the value of TRX and the value of the Shares.

Due To The
Unregulated Nature And Lack Of Transparency Surrounding The Operations Of TRX Trading Platforms, They May Experience Fraud, Manipulation,
Security Failures Or Operational Problems, Which May Adversely Affect The Value Of TRX And, Consequently, The Value Of The Shares.

Digital asset trading
platforms are relatively new and, in some cases, unregulated. Many operate outside the United States. Furthermore, while many prominent
digital asset trading platforms provide the public with significant information regarding their ownership structure, management teams,
corporate practices and regulatory compliance, many digital asset trading platforms do not provide this information. Digital asset trading
platforms may not be subject to, or may not comply with, regulation in a similar manner as other regulated trading platforms, such as
national securities exchanges or designated contract markets. As a result, the marketplace may lose confidence in digital asset trading
platforms, including prominent trading platforms that handle a significant volume of TRX trading.

Many digital asset
trading platforms are unlicensed, unregulated, operate without extensive supervision by governmental authorities, and do not provide
the public with significant information regarding their ownership structure, management team, corporate practices, cybersecurity, and
regulatory compliance. In particular, those located outside the United States may be subject to significantly less stringent regulatory
and compliance requirements in their local jurisdictions, and may take the position that they are not subject to laws and regulations
that would apply to a national securities exchange or designated contract market in the United States, or may, as a practical matter,
be beyond the ambit of U.S. regulators. As a result, trading activity on or reported by these digital asset trading platforms is generally
significantly less regulated than trading in regulated U.S. securities and commodities markets, and may reflect behavior that would be
prohibited in regulated U.S. trading venues. For example, in 2019 there were reports claiming that 80.95% of bitcoin trading volume on
digital asset trading platforms was false or noneconomic in nature, with specific focus on unregulated trading platforms located outside
of the United States. Such reports alleged that certain overseas trading platforms have displayed suspicious trading activity suggestive
of a variety of manipulative or fraudulent practices, such as fake or artificial trading volume or trading volume based on non-economic
“wash trading” (where offsetting trades are entered into for other than bona fide reasons, such as the desire to inflate
reported trading volumes), and attributed such manipulative or fraudulent behavior to motives like the incentive to attract listing fees
from token issuers who seek the most liquid and high-volume trading platforms on which to list their coins. Although these reports concerned
bitcoin, it is possible that similar concerns are present for TRX markets as well.