Recording your DeFi positions
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 7 min
In short
In DeFi your deposit is often replaced by a different token, so a balance screen alone will not tell you what is where. Record deposits, withdrawals and the receipt tokens you get back, with the protocol name. The tax treatment is a matter for the National Tax Agency's guidance and a tax professional.
Key points
- Record the receipt token — LP token or similar — you get on deposit, and its quantity
- Always note which protocol and which chain the position is on
- Logging the contracts you approved makes a later review possible
- Tax treatment varies by transaction form — ask a tax professional
Definition
Recording positions in DeFi protocols — deposits, borrowings, liquidity provision — noting what you put in, what you received back, and with which protocol.
DeFi records are hard because the assets change shape. Provide liquidity and the two original assets disappear in favour of an LP token; deposit into a lending market and you get back a different, interest-bearing token. The wallet screen fills with unfamiliar names, and a few months later you cannot say what position each one represents.
So capture, at each action: date, protocol, chain, what you deposited and how much, the receipt token you got and its quantity, and the transaction hash. Protocol and chain both matter, because the same protocol often runs on several chains and one name alone will not identify the position afterwards.
Record withdrawals at the same granularity: the date you returned the receipt token, what came back, and the difference. In liquidity provision the composition of what you get back can differ from what you put in, and that difference is precisely what the record is for. Log any rewards received in the meantime separately.
From a security standpoint, a log of approvals earns its keep too: which contract, which token, how much allowance. That list is the starting point when you review and revoke unnecessary approvals, and it is what lets you tell immediately, when news breaks about a protocol, whether you are exposed.
For tax, swaps, deposits, withdrawals and reward receipts are each analysed differently under rules set by law. This page does not assert answers — confirm with the National Tax Agency's guidance and a tax professional.
Watch out for
- · This page is a general orientation, not tax advice
- · Losing the receipt token can mean losing access to the deposit it represents
- · DeFi tax treatment varies by transaction form — check with the National Tax Agency and a tax professional
Frequently asked questions
If a portfolio tracker shows my positions, do I still need records?
Trackers are good at the present and often poor at the past, and closed positions may not appear at all. Tools also drop support for protocols, so keep your own record alongside.