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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where TRX can be bought, held and sold; and the TRX OTC market. TRX TRX is the native cryptographic token of the Tron Network, a permissionless and decentralized blockchain network and development platform. TRX serves multiple functions within the Tron Network, including securing the network through staking, enabling governance participation and facilitating the payment of transaction fees. Tron Network – Overview The Tron Network is a decentralized blockchain platform launched in 2017 by entrepreneur Justin Sun. It is designed to facilitate high-speed, low-cost transactions and support the creation of decentralized applications (“dApps”), with a particular emphasis on content sharing and entertainment services. The Tron Network aims to address the scalability and cost limitations of earlier blockchain infrastructures by implementing a delegated proof-of-stake (“DPoS”) consensus mechanism, enabling it to process up to 2,000 transactions per second (“TPS”), making it suitable for applications requiring high throughput, such as gaming and multimedia platforms.

The Tron Network utilizes
a DPoS model in which TRX token holders vote to elect 27 Super Representatives (“Super Representatives”) who are responsible
for validating transactions and producing blocks. These Super Representatives are elected every six hours, and TRX holders can vote by
staking their tokens, thereby participating in the Tron Network’s governance. This mechanism enhances scalability and efficiency,
aligning validator incentives with network security.

The Tron Network supports
the creation and trading of non-fungible tokens (“NFTs”), allowing artists and creators to mint and sell digital assets in
a decentralized marketplace. The gaming industry benefits from the network’s capabilities, with TRX used for in-game purchases,
rewards and other economic activities within blockchain-based games. Additionally, TRX can be utilized in social media and content-sharing
platforms, enabling direct compensation for content creators without intermediaries.

The Tron Network employs advanced
cryptographic techniques to ensure the security, integrity, and confidentiality of transactions. Its decentralized architecture, supported
by the DPoS consensus mechanism, contributes to its resilience against attacks and censorship. The Tron Network is also designed to be
interoperable with other blockchain systems, facilitating the seamless transfer of assets and data across different platforms, thereby
enhancing its versatility and integration within the broader blockchain ecosystem.

Smart Contracts and Development
on the Tron Network

Smart contracts are programs
that run on a blockchain and can execute automatically when certain conditions are met. Smart contracts facilitate the exchange of anything
representative of value, such as money, information, property, or voting rights. Using smart contracts, users can send or receive digital
assets, create markets, store registries of debts or promises, represent ownership of property or a company, move funds in accordance
with conditional instructions, and create new digital assets. Smart contracts can also be used to develop complex governance systems and
DeFi protocols.

On the Tron Network, smart
contracts are executed via the Tron Virtual Machine (“TVM”), a lightweight, Turing-complete virtual machine compatible with
the Ethereum’s virtual machine. The TVM enables developers to deploy and run smart contracts with high speed and low cost by utilizing
Tron’s resource model based on Bandwidth and Energy (each described below). This architecture supports the development of scalable
decentralized applications, while minimizing transaction fees.

TRX Staking

TRX does not have a
fixed total supply and is subject to an inflationary model that may be adjusted over time by community governance. The issuance of
TRX as staking rewards follows a delegated proof-of-stake consensus mechanism. The current block reward is fixed at sixteen (16) TRX
per block, though this rate is subject to change through protocol updates or governance decisions.

To participate in TRX staking,
a user must freeze TRX to obtain either “Bandwidth” or “Energy” (each described below) and receive voting rights.
These votes can then be used to support a Super Representative (described below). TRX holders who do not possess sufficient resources
or do not wish to operate as an Super Representative can still stake by voting for existing Super Representatives to earn a share of block
rewards. Freezing TRX temporarily locks the tokens and makes them unavailable for transfer during the staking period. Users can unfreeze
their TRX after a minimum period (currently three (3) days), at which point the tokens become liquid again.

Bandwidth and Energy

The Tron Network utilizes
a dual-resource model—Bandwidth and Energy—to manage transaction costs and computational resource consumption. These resources
are designed to reduce reliance on traditional transaction fees and to optimize the allocation of network throughput and computing power.

“Bandwidth” is
a measure of data size and is used to cover the cost of simple transactions, such as TRX transfers. Each account on the Tron Network receives
a limited amount of free Bandwidth daily. Additional Bandwidth can be obtained by freezing TRX, which temporarily locks the tokens in
exchange for resource credits and staking rights. Transactions that exceed an account’s available Bandwidth balance may be subject
to TRX fees deducted directly from the account balance.

“Energy” is consumed
when executing more complex operations on the Tron Network, such as smart contract executions. Unlike Bandwidth, Energy is not distributed
for free and must be acquired by freezing TRX. The amount of Energy consumed depends on the computational complexity of the smart contract
operation. Insufficient Energy at the time of execution may result in the failure of the transaction or additional TRX being burned to
cover the resource deficit.

Both Bandwidth and Energy
are non-transferable resource credits tied to a user’s address and are reset or recalculated periodically. The need to freeze TRX
in order to access these resources creates temporary illiquidity, which may introduce opportunity costs and liquidity risk for holders.

Super Representative

The Tron Network utilizes
a model in which TRX token holders vote to elect 27 Super Representatives who are responsible for validating transactions and producing
blocks. These Super Representatives are elected every six hours, and TRX holders can vote by staking their tokens, thereby participating
in the Tron Network’s governance. This mechanism enhances scalability and efficiency, aligning validator incentives with network
security.

Security and Interoperability

The Tron Network employs advanced
cryptographic techniques to ensure transaction integrity and network resilience. The TVM is designed to support smart contract execution
with efficiency and scalability, although smart contract risks remain inherent to any programmable blockchain. Validators (i.e.,
Super Representatives) are economically incentivized to act honestly, as continued voter support—and thus eligibility for block
rewards—depends on maintaining performance and reputation. While the Tron Network does not implement token slashing, underperformance
or misconduct may result in removal from the validator set. TRX is designed for interoperability, enabling asset and data transfers across
blockchains through cross-chain bridges and integrations (e.g., the BitTorrent Chain), thereby supporting a more connected and
composable multi-chain ecosystem.

Functions and Use Cases
of TRX

TRX is the native asset of
the Tron Network, and serves multiple purposes: (i) staking and network security, where users freeze TRX to vote for Super Representatives
responsible for validating transactions and producing blocks; (ii) transaction fees, as TRX is used to acquire Bandwidth and Energy resources
to cover transaction and smart contract execution costs; (iii) governance participation, where TRX holders influence validator selection
and network upgrades through delegated voting; and (iv) on-chain utility, as TRX is used across a broad ecosystem of smart contracts,
decentralized finance protocols, gaming applications, and NFT platforms.

TRX powers a variety of real-world applications:

1.	Decentralized Finance (DeFi) : Lending and borrowing platforms
on the Tron Network allow users to earn yield by supplying TRX or borrowing against collateral. Liquidity providers can participate in
decentralized exchanges and yield farming protocols. TRX’s low transaction costs and rapid confirmation times support stablecoin-based
payment systems and cost-efficient remittances.

2.	Non-Fungible Tokens (NFTs) : TRX is used to mint and trade
NFTs on TRX’s blockchain through marketplaces. The Tron Network’s low minting and trading fees lower the barrier to entry
for artists and developers. NFTs are also used to represent gaming assets and digital collectibles with verifiable ownership.

3.	Gaming and Metaverse : TRX facilitates in-game transactions,
player rewards, and ownership of tokenized gaming assets in decentralized gaming environments. The Tron Network’s high throughput
supports low-latency, on-chain gameplay and seamless digital commerce.

4.	Enterprise and Supply Chain Solutions : Businesses use the
TRX Blockchain to create immutable records, automate digital agreements via smart contracts, and track goods across supply chains. The
transparency and auditability of the TRX Blockchain enhance trust and efficiency in enterprise systems.

5.	Identity and Security : TRX is being explored in decentralized
identity frameworks, enabling credential verification and reducing fraud. Smart contract-based systems may also support privacy-preserving
applications and selective disclosure mechanisms in the future.

Governance and Ecosystem
Development

TRX holders participate in
network governance primarily through the election of Super Representatives, who validate transactions, produce blocks and influence protocol-level
decisions. TRX holders vote for Super Representatives by freezing their TRX and delegating votes, with vote weight proportional to the
amount staked. While the current governance structure is more representative than direct, Super Representatives may influence network
parameters such as block rewards, resource allocation policies and upgrade proposals. The governance model aims to encourage community
participation and maintain decentralized control over core network functions.