What is DeFi?
Decentralized Finance ("DeFi" for short) refers to online peer-to-peer financial activities. These activities are handling on a blockchain (e.g. Ethereum) without an intermediary bank or financial institution.
There are a broad range of financial activities included in DeFi including lending, borrowing, earning interest, paying interest on borrowed funds, trading financial instruments, and more.
How is DeFi taxed?
DeFi taxation is complex and depends on the type of activity that is carried out. Some types of activity are taxed in the same manner as their non-crypto counterparts (e.g. earning interest, lending, borrowing, paying interest), while other types don't even exist in the traditional financial world (e.g. wrapping, synthetic assets). We have written a DeFi tax guide and CoinTracker Tax & Portfolio plans helps you do this automatically.
Which DeFi platforms does CoinTracker support?
We support the following DeFi platforms:
We are planning support for many others including:
We are rapidly expanding in this area and building out integrations with top DeFi platforms. Please check out our feedback page to see our roadmap and upvote the DeFi integrations you want to see added.
Common issues and solutions for DeFi transactions
Cost basis or proceeds not detected for a token
Whenever possible, CoinTracker automatically synchronizes transaction and price history for DeFi wallets and platforms. Sometimes, however, the price history of a token may be missing. This most commonly occurs when we do not have the price history of a particular coin.
Example of a warning flag on a transaction where we don't have a price history feed.
We are rapidly working on expanding our list of supported tokens and price histories, which will entirely eliminate this problem in most cases. In the meantime, you can manually solve the issue by adding the proceeds and cost basis on the transactions page.
To do this, simply navigate to the relevant transaction with a needs review flag and then use the down arrow on the right-hand side of the page to select the relevant coin and then "Edit cost basis" or "Edit proceeds" depending on whether the flag is on the left or right-hand side of the transaction respectively. From there, you can manually enter in the correct price of that coin on that date, by looking up the price from Nomics, CoinMarketCap or on Etherscan.
After you add proceeds and cost basis, CoinTracker will re-compute your cost basis (you'll see a yellow banner at the top of the page). After a few minutes, go ahead and refresh the page. Once the yellow banner is gone, you'll know the recomputation is done and you'll see the red flags disappear.
Why aren't my DeFi transactions being recognized?
The most common reason is that we haven't yet added support for this type of DeFi platform or activity. Examples including loans, debt, decentralized derivatives, wrapping, and synthetic tokens. To request support for these, please upvote the relevant request from our feedback page.