How to File Your Constellation (DAG) Taxes with Koinly
Constellation (DAG) is a decentralized network, aiming to build the future of Web3 with fee-less transactions. But if you're selling, trading, or staking DAG - your tax office will want to know about it. Don't worry, Koinly makes it easy to do your Constellation crypto taxes. Here's how.
Follow these steps to sync your Constellation (DAG) data automatically to Koinly:
- Open your Constellation (DAG) wallet app
- Locate and copy your public address or key
- Create a free account on Koinly
- Complete onboarding until you get to the Wallets page and find Constellation (DAG) in the list
- Select API > Paste the public address/key you copied above in the appropriate box
- Hit Import and wait for Koinly to sync your data. This can take a few minutes
- Review your transactions on the Transactions page to ensure everything is tagged correctly and no missing data
- Go to the Tax Reports page to view your tax liability!
Your frequently asked questions
What is Constellation?
Constellation Network is a blockchain platform that uses a specific blockchain technology called "directed acyclic graph" (DAG) to achieve high scalability and low latency.
What is DAG?
DAG is the native cryptocurrency of the Constellation network. It can be used to pay for transaction fees, as well as for other services within the network. DAG stands for directed acyclic graph - a data structure that allows for parallel processing of transactions, making it possible to achieve higher throughput and faster confirmation times than traditional blockchain technologies.
What kind of consensus mechanism does Constellation use?
DAG uses a fairly unique consensus algorithm known as Proof of Reputable Observation, more commonly known as Proof of Meme. This consensus mechanism combines traditional PoS with the reputation of node operators. So node operators will stake a given amount of DAG and receive rewards - like in PoS - but if a node finds a conflict in some data, a conflict resolution mechanism is triggered. The node will then take into account the reputation scores of the nodes who signed the conflicting data in order to resolve the issue.
How can I buy DAG?
Is the Constellation network safe?
The Constellation network uses advanced cryptographic techniques and is designed to be highly secure. However, no network is completely immune to attacks, so it is important to exercise caution and follow best practices for securing your digital assets.
What is the current price of DAG?
You can find the current price of DAG on price aggregators like CoinMarketCap or CoinGecko. Previously, DAG has had an all-time high of $0.44 and an all-time low of $0.001.
Is DAG a good investment?
The future of Constellation and DAG is promising, as the technology has the potential to revolutionize a wide range of industries. However, the cryptocurrency market is highly volatile, so it is important to do your own research and make informed investment decisions.
Do I have to pay tax on my DAG investments?
Yes. Most tax offices have made it clear crypto is subject to tax. The tax you pay depends on where you live and your transactions, but generally speaking, you'll pay Capital Gains Tax on any gain from selling, swapping or spending DAG and Income Tax on any DAG tokens seen as income - like staking rewards.