How to use DeFi (Decentralized Finance) capabilities

This page explains how to use our DeFi (Decentralized Finance) capabilities. Please follow these steps to accurately reflect the transactions in your wallet to the ledger to ensure the profit and loss are calculated correctly.


Steps to use the DeFi capabilities

    1. Connect your DeFi wallets
      1. Supported networks
    2. Address "To Confirm" DeFi transactions
      1. Case1: How to address "To Confirm - Unclassified transfers"
      2. Case2: How to address "To Confirm - Unknown transactions"
      3. Case3: How to address "To Confirm - Others"
    3. How to edit "Identified" DeFi transactions
    4. Check "Transactions"

 

1. Connect your DeFi wallets

First, please register the wallet address that you use for your DeFi. Once this is done, Cryptact automatically fetches all historical transactions associated with it.

For more details on how to register your wallet address, please refer to here (currently only in Japanese).

 

Supported networks

  • BNB Chain (Previously, Binance Smart Chain/BSC)
  • Ethereum (ETH)

* We also plan to gradually introduce support for other networks.

 


 

2. Address "To Confirm" DeFi transactions

The system analyzes the transactions associated with the wallet address and attempts to identify the associated smart contracts.

The system then attempts to determine the background for each transaction. If it can recognize the transaction type, it updates the transaction detail and run the PNL calculation for it automatically.

If the system cannot recognize their transaction types or if they are not DeFi, they will be temporarily marked as "To Confirm".

The system does not include transactions marked as "To Confirm" in the PNL calculation (because the information needed for the calculation is missing). To address this, please take the following steps to resolve the "To Confirm" status.

【Attention!】"To Confirm" transactions are excluded from the PNL calculation. To include them, you will need to manually specify the transaction types.

★In order to improve the logic of automatically recognizing DeFi transactions, we are constantly expanding our dictionary of DeFi transaction types and how they should be treated during the pnl calculation. Synchronizing wallet addresses may result in recognizing DeFi transactions which were previously marked "To Confirm". However, if you already have selected the transaction types for those marked "To Confirm", then the system will use the manually selected transaction types for the pnl calculation.

 


 

 

2-1. Case1: How to address "To Confirm - Unclassified transfers"

[What are "Unclassified transfers"?]

Unclassified transfers are deposits/withdrawals in your wallets that are unrelated to DeFi.

Examples are:

  • Deposits and withdrawals from the exchange to the wallet
  • ICO Participation from the wallet
  • Received cryptocurrencies that are unrelated to Defi through airdrops, hard forks, etc
  • Buying and selling of cryptocurrency through wallets between individuals

Because these are unrelated to DeFi, the system cannot automatically determine their transaction types. You need to manually select the transaction types to resolve the "To Confirm" status.

 

[HOW TO]

1. Check "DeFi Transactions"

Click "DeFi Transactions". If the system detected unclassified transfers, you will see the following screen. Click "Show unclassified transfers" to see all unclassified transfers.

defi-basic1.png

2. Select the reason for each transfer

For each transfer, select the reason by clicking the appropriate button (the below table gives the outlines for each option).

defi-basic2.png

[Options for Deposits]
Option Outline

Impact to

PNL Calculation

Self A deposit from your other wallet or from the exchange

No impact to PNL. Does not show on the ledger

Receive A cryptocurrency receipt as the result of a purchase (an exchange), an ICO participation, or a gift from an individual Bought at market value
Bonus Other than above. A cryptocurrency receipt as the result of staking reward, airdrop, or other types of rewards Considered as a profit at market value
Fee Only Reason for the deposit is unknown

Excluded from PNL calculation

[Options for Withdrawals]

Option Outline

Impact to

PNL Calculation

Self A withdrawal to your other wallet or to the exchange

・No impact to PNL. Does not show on the ledger

・If there is a fee associated with the withdrawal, the fee portion alone is reflected as  transfer fee (種別/Type:SENDFEE)

Pay A cryptocurrency withdrawal as the result of a sale (asset exchange), or a gift to an individual Sold at market value
Loss A cryptocurrency withdrawal which qualify as a loss or an expense

Considered as a loss (sold for 0 JPY)

Fee Only Reason for the withdrawal is unknown

・Excluded from PNL calculation

・If there is a fee associated with the withdrawal, the fee portion alone is reflected(種別/Type:DEFIFEE)

 

*Click "Apply to all visible" to make selections for all transfers displayed on the screen at once.

defi-basic3.png

*Click "Revert pending changes" to undo the bulk selection operation.

 

3. Apply selected options

After selecting the reason for the transfers, click "Synch all". Your selection will be reflected in the system, and the status is updated from "To Confirm" to "Identified".

defi-basic4.png

4. Once all unclassified transfers are addressed, you can proceed to the next step.

defi-basic5.png

 

Back to Table of Contents

 


 

 

2-2. "Case2: How to address "To Confirm - Unknown transactions"

[What are "Unknown transactions]?

Unknown transactions are DeFi transactions for which the system could not identify the transaction types.

The system refers to the smart contracts associated with the transactions and attempts to identify their transaction types. If the system cannot determine the transaction type, the transaction is flagged as "To Confirm - Unknown transaction". Please manually select the transaction type to resolve the "To Confirm" status.

 

[HOW TO]

1. Check "DeFi Transactions"

Click "DeFi Transactions". If the system detected unknown transactions, you will see the following screen. Click "Show unknown transactions" button to see all unknown transactions.

defi-basic6.png

2. Select the transaction type

For each transaction, select the transaction type from the pull-down menu (the below table gives the outlines for each option).

You can refer to the information in the link in the DEFI TRANSACTION column and the DETAIL column to make your selection.

defi-basic7.png

[Available Transaction Type Options]

Transaction Type Outline

Impact to

PNL Calculation

Bonus A deposit as the result of an airdrop or other type of reward

・Considered as a profit at market value

・If there is a withdrawal with the same transaction hash, the withdrawal is excluded from the PNL calculation

Loss A withdrawal which qualifies as a loss or an expense

Considered as a loss (sold for 0 JPY)

Pay

A payment for the purchase of services or goods

Sold at market value
Fee Only

The reason for the deposit/withdrawal is unknown and want to only include the fee portion in the PNL calculation

・Excluded from the PNL calculation

・The fee portion alone is reflected as DEFIFEE (always as a deductable)

Transfer

In this case, you will need to select the reason for the transfer also.

*Only for ERC20 or NFT deposit and withdrawal history, this option is available.

* For details, please refer to 2-1. Case1: How to address "Unclassified transfers"

・The fee is reflected as a transfer fee (SENDFEE)

Swap

Exchange of one cryptocurrency to another

* To select this type, the deposit/withdrawal history must be present in the ASSET MOVEMENTS column.

Reflected as an exchange of one cryptocurrency to another

* The transaction history will show as either Buy or Sell

Harvest Received an interest-like income from the locked coins Considered as a profit at market value
Add Liquidity Deposited a coin pair into a liquidity pool

No impact to PNL at the time of deposit

* PNL calculation method differs depending on your setting. For more details, please refer to here (currently only in Japanese).

Remove Liquidity Withdrew the coin pair from the liquidity pool

・For each coin, determine the type based on the difference in the # of coins deposited and withdrawn

deposited < withdrawn => considered as a profit at market value (BONUS)

deposited > withdrawn => considered as a loss (Sold for 0 JPY)

* PNL calculation method differs depending on your setting. For more details, please refer to here (currently only in Japanese).

Enter Staking Deposited coins for staking

・No impact to PNL at the time of deposit

* If you have a confirmed staking reward from your previously staked coins, the reward is considered a profit (will show as STAKING)

Leave Staking Withdrew coins from staking pool

・Withdrawn - Deposited => considered a staking reward (STAKING) or a profit at market value

・If the staked coin and the reward coin differ, only consider the staking reward as a profit (STAKING)

Enter LP Staking Deposited LP tokens for staking ・No impact to PNL at the time of deposit
Leave LP Staking Withdrew LP tokens from staking pool

・Withdrawn - Deposited => needs to be recognized as a staking reward

* We currently do not handle staking rewards for LP tokens. Please manually upload them as custom trades separately.

Enter Lending Started lending coins

No impact to PNL at the time of starting lending

Leave Lending Received back the loaned coins

Returned - Loaned => considered a lending interest (LENDING) or a profit at market value

Borrow Borrowed coins

・No impact to PNL at the time of borrowing

・Position in borrowed coins increases

Return Return the borrowed coins

Borrowed amount - (Book value of the coin * quantity) => considered as a loss

Approve The fee (gas fee) that incurs when a transaction is approved and sent The fee portion is considered a loss (will show as DEFFEE)
Wrap Wrap coins to be sent and used on another chain

The fee portion alone is reflected in the PNL calculation

* For details on how wrapped tokens are handled, please refer to here (currently only in Japanese).

Unwrap Unwrap the coin received back from another chain

The fee portion alone is reflected in the PNL calculation

* For details on how wrapped tokens are handled, please refer to here (currently only in Japanese).

 

*Click "Apply to all visible" to make selections for all transactions displayed on the screen at once (only for "Fee Only").

defi-basic8.png

*Click "Revert pending changes" to undo the bulk selection operation.

 

3. Apply selected options

After selecting the transaction types, click "Synch all". Your selection will be reflected in the system, and the status is updated from "To Confirm" to "Identified".

defi-basic9.png

4. Once all unknown transactions are addressed, you can proceed to the next step.

defi-basic10.png

Back to Table of Contents

 

 

2-3. How to address "To Confirm - Other"

[What are "To Confirm - Other"?]

"To Confirm - Others" are irregular transactions or transactions that can't be reflected in the PNL calculation properly due to incorrect edits made in step 1 and 2 above.

The transaction gets flagged as "To Confirm - Other", if the system was able to identify the associated smart contract but still could not identify the transaction type due to some irregularity, or if the transaction cannot be reflected in the PL calculation properly because the edits made in step 1 and 2 don't make sense (*). Please manually update the transaction type and resolve the "To Confirm" status.

 

* Examples of transactions that cannot be reflected in the PNL calculation properly:

  • Even though the ASSET MOVEMENTS column only shows "withdrawal" history, "Swap" ( Exchange of one cryptocurrency to another) was selected
  • Even though the ASSET MOVEMENTS column only shows "deposit" history, "withdrawal" related transaction type was selected
  • Even though there is no "Add Liquidity" transaction, "Remove Liquidity" was selected

 

[HOW TO]

1. Check "DeFi Transactions"

Click "DeFi Transactions". If the system detected "To Confirm - Others", you will see the following screen. Click "Show irregular/misclassified transaction(s)" to see all "To Confirm - Others" transactions.

defi-basic11.png

2. Select the transaction type

For each transaction, select the transaction type from the pull-down menu.

You can refer to the information in the link in the DEFI TRANSACTION column and the DETAIL column to make your selection.

defi-basic12.png

3. Apply selected options

After selecting the transaction types, click "Synch all". Your selection will be reflected in the system, and the status is updated from "To Confirm" to "Identified".

defi-basic13.png

When step1~3 are completed and all "To Confirm" transactions are addressed, you will see the following message. You can click "All" to view all DeFi transactions.

defi-basic14.png

Back to Table of Contents


 

 

3.How to edit "Identified" DeFi transactions

Please take the following steps if you wish to edit DeFi transactions that are already in "Identified" status.

Transactions that were automatically recognized by the system and transactions that you manually recognized (manually selected the transaction types in step 1~3) can both be edited using the following steps.

 

[HOW TO]

1. Select the DeFi transaction that you wish to edit. Click "Identified". You can filter transactions based on whether they were automatically recognized by the system or manually recognized (manually selected the transaction types).

defi-basic15.png

2. Click the "Edit" button.

defi-basic16.png

3. Select the transaction type.

defi-basic17.png

4. Click "Synch All".

defi-basic18.png

5. The newly selected transaction type is reflected in the system.

defi-basic19.png

Back to Table of Contents

 


 

 

4. Check "Transactions"

"DeFi Transactions" displays the list of transactions fetched from the wallet you have connected in "1. Connect your DeFi wallets".

"Transactions" displays the list of all cryptocurrency transactions including DeFi transactions and exchange transactions.

* DeFi transactions in "Identified" status are automatically reflected in the "Transactions" and included in the PNL calculation.

* DeFi transactions for which you selected "Fee Only" or "Self" are excluded from the PNL calculation, hence they are greyed out in the "Transactions".

defi-basic20.png

Please make sure you have no invalid transactions. "Repair Ledger" button does not handle invalid transactions in DeFi. Therefore, if you have invalid transactions in DeFi, you will need to upload custom trades manually.

 

Disclaimer

As stated in the Terms of Use, Cryptact is not responsible for the calculated pnl. In addition, the information provided here is only a tentative description and does not take into account individual circumstances. If you have any questions about taxation, please contact your tax advisor.