On this page, we'll introduce handling Wrapped Tokens in DeFi transactions.
As of December 2021, there were no clear guidelines from the National Tax Agency, so please confirm the calculation method with your local tax office. Additionally, there is a possibility that future guidelines may differ from the calculation method outlined here.
Contents;
１．What is Wrapped Token
Wrapped Tokens are tokens designed to track the value of other tokens. They are obtained by applying a "wrapping" process to the underlying token, but can also be acquired directly through exchanges and other platforms.
By using Wrapped Tokens, it's possible to transport the value of the underlying token to a different blockchain. For example, while you can't directly use Bitcoin on the Ethereum blockchain, creating a Wrapped Token for Bitcoin on Ethereum allows you to transfer the value of Bitcoin within the Ethereum ecosystem.
Generally, you can reclaim the original coins by "unwrapping" them at your own discretion.
２．Examples of Wrapped Tokens
Our supported Wrapped Tokens include WETH, WBNB, WMATIC, WFTM, WAVAX, and more. Please refer to our supported coin list for further details.
３．Handling Wrapped Tokens on DeFi
When processing DeFi transactions, wrapped tokens and their unwrapped counterparts are treated as the same coin in our system (*1).
The reason for this is that there are a very large number of wrapped tokens in DeFi, and some wrapped tokens even keep the same name as the original asset. Therefore, it is practically impossible to identify all of them without omission. As a practical approach, our system handles them as described above.
(*1) In cryptact, the main coin on each network is treated as the same coin and reflected in the transaction page.
Examples:
BSC: WBTC → Since the main coin on BSC is BTCB, BTCB is reflected as “BTC” in the transaction page.
However, WBTC is not the main coin, so if you have WBTC transactions, they will be reflected as “WBTC” rather than “BTC.”BASE: WBTC → Reflected as “BTC” in the transaction page.
*Regarding tokens that are not wrapped in a 1:1 ratio, please upload the transaction history for custom files, adjusting the quantities as follows:
- If the quantity has increased: Upload the purchase history at the market value of the original coin for the increased quantity.
- If the quantity has decreased: Upload the sales history at the market value of the original coin for the decreased quantity.