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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as some believe, the risk of and arising from this particular group of users obtaining control of the validating power on the Tron Network will be even greater, and should this materialize, it may adversely affect the value of the Shares. Validators Exit The Tron Network, It Could Increase The Likelihood Of A Malicious Actor Obtaining Control. Validators exiting the network could make the Tron Network more vulnerable to a malicious actor obtaining control of a large percentage of staked TRX, which might enable them to manipulate the TRX Blockchain by censoring or manipulating specific transactions, as discussed previously. If the TRX Blockchain suffers such an attack, the price of TRX could be negatively affected, and a loss of confidence in the Tron Network could result. Any reduction in confidence in the transaction confirmation process or staking power of the Tron Network may adversely affect an investment in the Trust.

Blockchain
Technologies Are Based On Theoretical Conjectures As To The Impossibility Of Solving Certain Cryptographical Puzzles Quickly. These Premises
May Be Incorrect Or May Become Incorrect Due To Technological Advances.

Blockchain
security relies on cryptographic principles, including public-key cryptography and multi-party signing mechanisms. Those cryptographic
principals could prove to be incorrect or less secure than originally thought. Blockchain technology companies, including TRX, may be
negatively affected by cryptography or other technological or mathematical advances, such as the development of quantum computers with
significantly more power than computers presently available, that undermine or vitiate the cryptographic consensus mechanism underpinning
the Tron Network and other distributed ledger protocols. If either of these events were to happen, markets that rely on blockchain technologies,
such as the Tron Network, could quickly collapse, and an investment in the Trust may be adversely affected.

The
Price Of TRX On The TRX Market Has Exhibited Periods Of Extreme Volatility, Which Could Have A Negative Impact On The Performance Of The
Trust.

The
price of TRX as determined by the TRX market has experienced periods of extreme volatility and may be influenced by a wide variety of
factors. Speculators and investors who seek to profit from trading and holding TRX generate a significant portion of TRX demand. Such
speculation regarding the potential future appreciation in the value of TRX may cause the price of TRX to increase.

Conversely,
a decrease in demand for or speculative interest regarding TRX may cause the price to decline. The volatility of the price of TRX, particularly
arising from speculative activity, may have a negative impact on the performance of the Trust.

Smart
Contracts, Including Those Relating To DeFi Applications, Are A New Technology And Their Ongoing Development And Operation May Result
In Problems, Which Could Reduce The Demand For TRX Or Cause A Wider Loss Of Confidence In The Tron Network, Either Of Which Could Have
An Adverse Impact On The Value Of TRX.

Smart
contracts, including those used in DeFi applications, are a relatively new technology, and their ongoing development and operation may
result in unforeseen issues. Any vulnerabilities or failures in smart contracts deployed on the Tron Network could reduce demand for TRX
or cause a broader loss of confidence in the network, either of which could negatively impact the value of TRX.

Smart
contracts are self-executing programs that run on the Tron Network, executing predefined actions when certain conditions are met. The
Tron Network utilizes the Move programming language, which is designed to enhance security, minimize attack vectors, and provide more
efficient execution of smart contract logic. Despite these advantages, smart contract risks remain, including potential coding errors,
unforeseen interactions between contracts, and exploits that could lead to loss of funds or network inefficiencies.

The
Tron Network supports high-performance smart contracts, enabling seamless transactions, asset transfers, and automated processes within
DeFi applications, gaming, and other blockchain-based services. However, smart contract execution relies on validators and network participants
to confirm and process transactions. If a smart contract contains flaws, operates inefficiently, or is subject to an exploit, it could
lead to security breaches, loss of user funds, or disruptions in the broader Tron Network ecosystem.

The
adoption and functionality of smart contracts on the Tron Network depend on continuous improvements, rigorous security audits, and widespread
developer participation. While the Move language enhances security by reducing common vulnerabilities, no blockchain or smart contract
platform is entirely immune to risk. Issues arising from smart contract failures or security breaches may impact user confidence, hinder
adoption, and negatively affect the demand for TRX as a utility token within the ecosystem.

Even
when upgraded, smart contracts typically cannot be stopped or reversed, vulnerabilities in their programming can have damaging
effects. For example, in June 2016, a vulnerability in the smart contracts underlying the DAO, a distributed autonomous organization
for venture capital funding on the Ethereum network, allowed an attack by a hacker to syphon approximately $60 million worth of
ether from The DAO’s accounts into a segregated account. In the aftermath of the theft, certain core developers and
contributors pursued a “hard fork” of the ethereum network in order to erase any record of the theft. Despite these
efforts, the price of ether reportedly dropped approximately 35% in the aftermath of the attack and subsequent hard fork. In
addition, in July 2017, a vulnerability in a smart contract for a multi-signature wallet software developed by Parity led to a
reportedly $30 million theft of ether, and in November 2017, a new vulnerability in Parity’s wallet software reportedly led to
roughly $160 million worth of ether being indefinitely frozen in an account. Furthermore, in April 2018, a batch overflow bug was
found in many Ethereum-based ERC20-compatible smart contract tokens that allows hackers to create a large number of smart contract
tokens, causing multiple crypto asset platforms worldwide to shut down ERC20-compatible token trading. Similarly, in March 2020, a
design flaw in the MakerDAO smart contract caused forced liquidations of crypto assets at significantly discounted prices, resulting
in millions of dollars of losses to users who had deposited crypto assets into the smart contract. In another example, in February
2022, a vulnerability in a smart contract for Wormhole, a bridge between the Ethereum and Solana Networks led to a $320 million
theft of Ethereum. While persons associated with Solana Labs and/or the Solana Foundation are understood to have played a key role
in bringing the network back online, the broader community also played a key role, as Solana validators coordinated to upgrade and
restart the network. Other smart contracts, such as bridges between blockchain networks and decentralized finance
(“DeFi”) protocols have also been manipulated, exploited or used in ways that were not intended or envisioned by their
creators such that attackers syphoned over $3.8 billion worth of digital assets from smart contracts in 2022. Problems with the
development, deployment, and operation of smart contracts may have an adverse effect on the value of TRX, just as they have for
other digital assets like ethereum.

In some cases, smart
contracts on the Tron Network may be controlled by one or more “admin keys” or users with special privileges, sometimes referred
to as “super users.” These users may have the ability to unilaterally make changes to the smart contract, enable or disable
specific features, modify how the smart contract receives external inputs and data, and alter other key functionalities. In some instances,
inadequate public information may be available regarding the operation of certain smart contracts, and information asymmetries may exist
even for open-source applications. As a result, certain participants may possess hidden informational or technological advantages, creating
an uneven playing field.