How to change the setting for PNL calculation for Liquidity Provider

This article explains how you can change the setting for PNL calculation for Liquidity Provider.

As of December 2021, there is no clear guidance from the National Tax Agency on how the Liquidity Provider should be treated while calculating the pnl. Ultimately, you need to check with your tax office for final guidance on your own circumstances. In the future, the National Tax Agency may issue guidance on the calculation method which differs from the below.


1. Cryptact's approach to calculating the PNL for Liquidity Provider and LP tokens

The default calculation method focuses only on the difference in the number of coins deposited (Add Liquidity) and withdrawn (Remove Liquidity). The pnl is calculated only based on the difference.

This means that the act of Adding Liquidity/Removing Liquidity or the increase/decrease in the number of LP tokens is deemed to have no impact on the pnl, and therefore, they are not included in the pnl calculation. If you prefer to see these transactions as To Confirm transactions in Cryptact and handle them by yourself, please follow the steps below.

DeFi: Our approach to Liquidity Provider and LP tokens


2. How to change the setting

1. Go to the Transactions tab and click the gear icon in the top-right corner.

LP Setting I.png

Alternatively you can click "Settings" tab in the top-left corner.

スクリーンショット 2023-11-09 190142.png


2. In the "DeFi settings" section, change the "Calculations for certain DeFi transactions" to "Confirm", then click "Update".

LP Setting II.png

* The default setting is "Differential".