The creation and redemption of Baskets requires the delivery to or acquisition by the Trust, or the distribution or disposition by the Trust, of the amount of ZEC represented by the Baskets being created or redeemed, the number of which is equal to the “Basket Amount” as of 4:00 p.m., New York time, on the trade date of a creation or redemption order multiplied by the number of Baskets being created or redeemed (the “Total Basket Amount”). The amount of ZEC required to create a Basket, or to be delivered or disposed of upon the redemption of a Basket, will gradually decrease over time due to the transfer of the Trust’s ZEC to pay the Sponsor’s Fee and the delivery or sale of the Trust’s ZEC to pay any Trust expenses not assumed by the Sponsor. See “Description of Creation and Redemption of Shares” in this prospectus and “Part I—Item 1. Business— Activities of the Trust” in the Annual Report.
Although the Trust creates Baskets only upon the receipt of ZEC, and redeems Baskets only by distributing ZEC or proceeds from the disposition of ZEC, at this time an Authorized Participant may choose to submit Cash Orders, pursuant to which the Authorized Participant will deposit cash into, or accept cash from, the Cash Account in connection with the creation and redemption of Baskets. Cash Orders will be facilitated by the Transfer Agent and Grayscale Investments Sponsors, LLC, which will engage one or more eligible companies (each, a “Liquidity Provider”) that is not an agent of, or otherwise acting on behalf of, any Authorized Participant to obtain or receive ZEC in connection with such orders. Transfers of ZEC between the Trust’s Accounts and the Liquidity Provider in connection with Cash Orders are “on-chain” transactions represented on the Blockchain. The Liquidity Provider will pay any transfer fees associated with such on-chain transfers of ZEC into the Trust, while the Custodian will pay transfer fees for on-chain transfers of ZEC within the Trust or out of the Trust. Neither the Custodian nor the Liquidity Provider will pay such transfer fees with the Trust’s assets. The Sponsor may in its sole discretion limit the number of Shares created pursuant to Cash Orders on any specified day without notice to the Authorized Participants and may direct the Marketing Agent to reject any Cash Orders in excess of such capped amount. The redemption of Shares pursuant to Cash Orders will only take place if approved by the Sponsor in writing, in its sole discretion and on a case-by-case basis. The Trust may also create Baskets via In- Kind Orders, pursuant to which an Authorized Participant or its AP Designee would deposit ZEC directly with the Trust. As of the date of this prospectus, the Trust does not permit the redemption of Shares through In-Kind Orders, and Authorized Participants must submit orders to redeem Shares as Cash Orders. In the future, the Trust may, but is under no obligation to, permit redemption of Shares via In-Kind Orders, which would involve the Trust redeeming Baskets of Shares from Authorized Participants, or their AP Designees, in exchange for ZEC directly from the Trust. See “Description of Creation and Redemption of Shares.” The Sponsor has engaged certain unaffiliated Liquidity Providers, and intends to engage additional Liquidity Providers who are unaffiliated with the Trust in the future. Net Asset Value .............................As of June 30, 2026, the Trust’s Principal Market NAV, determined on a U.S.
GAAP basis, was $155,251,816 and the Trust’s Principal Market NAV per Share was $32.15. See “Part I—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Selected Operating Data” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 for additional information reconciling the Trust’s NAV and NAV per Share presented in the Annual Report (previously referred to therein as “Digital Asset Holdings” and “Digital Asset Holdings per Share”) against the U.S. GAAP metrics presented in our financial statements included hereto.
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