How to file your LidoDao (LDO) taxes with Koinly
Lido is a liquid staking solution for Ethereum, Solana, Polygon, Polkadot, and Kusama - allowing investors to put their staked tokens to work, while LDO is the native ERC-20 governance and utility token for the protocol. Users can use LDO tokens to vote on developments for the protocol and earn them through referral programs, airdrops, and more. Whatever your investments, Koinly can help calculate taxes for thousands of ERC-20 tokens, including LDO. Here's how.
Sign up to Koinly and choose your country and currency
Connect Ethereum with Koinly to import all your trades safely and securely - including ERC-20 tokens like LDO
Koinly identifies the cost basis of your tokens and coins, as well as your taxable transactions
Koinly calculates any capital gains, losses, and income from your taxable transactions
Koinly generates your crypto tax report - ready to help you file with your tax office, or hand it over to your accountant.
How are LidoDAO (LDO) tokens taxed?
The taxes you pay on crypto - including LDO tokens - depends on where you live, so read our crypto tax guides for specific information about where you live. But broadly speaking, two taxes may apply to your LDO transactions:
Capital Gains Tax: When you sell or trade LDO tokens, you’ll usually pay Capital Gains Tax on any gain you make as a result of the transaction.
Income Tax: When you earn new LDO tokens - for example, from airdrops, referral bonuses, or through other incentives - this could be seen as additional income and you may need to pay Income Tax based on the fair market value of your LDO tokens at the time you received them.
Can the IRS track LDO?
The IRS, and other tax offices, have highlighted crypto as a key focus this tax season, and your LidoDAO investments will be no exception. But can the IRS track crypto?
Your LDO transactions are all recorded on the Ethereum public ledger... and a public ledger is just that - public. Anyone can search for a given address to look at the transactions made - including the IRS. If the IRS can link your identity to a given wallet or transaction - then they may know about your investments, even if you’ve used decentralized protocols like LidoDAO and non-custodial wallets.
As always, we recommend a conservative approach to crypto taxation to avoid provoking the ire of the IRS and potential audits or crypto tax penalties.
How to get LidoDao (LDO) tax documents
How to prepare and file your crypto taxes depends on your tax office, but you'll usually report your gains or income from crypto - including LidoDao investments - as part of your annual tax return.
To do this for your LDO tokens, you'll need to identify each taxable transaction involving LDO tokens, and the kind of tax that applies. So you'll need to calculate a capital gain or loss for every time you sold or swapped LDO tokens, as well as calculate the fair market value in your fiat currency for any LDO tokens viewed as additional income.
If you think that sounds time-consuming, you’d be right - which is why most investors use a crypto tax calculator like Koinly. Koinly can calculate your gains, losses, and income for more than 450,000 ERC-20 tokens - including LDO!
Of course, when we talk about LidoDAO taxes, many investors will be wondering whether Koinly can help them calculate their other transactions relating to the LidoDAO protocol - and the answer is yes! You just need to connect your blockchain to Koinly to do so using your public address. Here's how it works.
How to import LDO transactions to Koinly automatically
To import your LDO transactions into Koinly, you’ll need to connect each Ethereum wallet you use to Koinly.
This is really easy to do, you just need your public address - but remember, you’ll need to do this for each Ethereum wallet you use to interact with LDO in order for Koinly to correctly identify your cost basis, transfers, sales, swaps, and more. As well as this, if you're using the Lido protocol to stake tokens and transacting with other tokens - for example, stSTOL, stMATIC, stDOT, and so on - you'll need to connect these blockchains to Koinly as well using your public address in order for Koinly to calculate your crypto taxes accurately.
You can find steps on how to connect a variety of popular wallets to Koinly on our integration pages, but here’s an example of how it generally works.
In your wallet
Open or log in to your wallet
Select the blockchain you'd like to connect to Koinly - in this example, Ethereum
Copy your public address
On Koinly
Sign up or log in to your Koinly account and go to the wallets page
Search for and select the blockchain you'd like to connect to - in this example, Ethereum
Give your wallet a name - for example - MetaMask Ethereum
Paste your public address
Important
You may need to upload your Lido Reward transactions as a CSV file. If you're having trouble uploading your Lido Reward transaction data to Koinly, check out this help page for a simple workaround.
Your frequently asked questions
What is Lido?
LidoDAO is a decentralized autonomous organization that provides a liquid staking solution for Ethereum and other PoS blockchains. It allows users to stake their crypto without locking it up, and receive tokens in return, which represent a stake in the underlying asset but can be used on other protocols.
What are LDO tokens?
LDO is the native utility and governance token for the Lido protocol. LDO holders can vote for developments in the Lido protocol, as well as earn LDO tokens through a variety of incentive schemes. As well as this, you can buy, swap, and sell LDO tokens like you would any other cryptocurrency.
How can I get LDO tokens?
You can buy LDO tokens on centralized exchanges like Coinbase, Binance, and Gemini, or trade other tokens for LDO tokens using decentralized exchanges like Uniswap. As well as this, Lido has various incentives to earn LDO tokens.
What is the current price of LDO?
Like all cryptocurrencies, LDO price varies based on market conditions and demand. LDO has previously had an all-time high of $11 and an all-time low of $0.406.
How many LDO tokens are there?
LDO has a circulating supply of 853 million and a maximum supply of 1 billion.
What is the purpose of LDO tokens?
LDO tokens allow holders to vote in governance issues relating to the Lido protocol - but you can also earn, swap, and sell them as you would with any other cryptocurrency.
Is LDO a good investment?
LDO is a popular token thanks to the popularity of the Lido protocol, and Lido regularly offers incentives to earn Lido tokens for participation in various schemes. However, as with any investment, you should do your own research before investing.
How can I store my LDO tokens?
LDO tokens can be stored in various cryptocurrency wallets that support ERC-20 tokens, like MetaMask, Trust Wallet, and MyEtherWallet. But it's important to store your tokens securely and keep your private keys safe.
What blockchain are LDO tokens on?
LDO tokens are an ERC-20 token on the Ethereum blockchain.
Is Lido staking safe?
Lido is a popular protocol with more than $9 billion in assets staked, but it has its risks including technical risk, smart contract security, slashing risks, and the risk of staking tokens like stETH depegging. You should always DYOR to understand the risks involved.
How do I use Lido?
To use Lido, just connect the wallet that holds the tokens you want to stake in to Lido and enter the amount you want to stake. Press stake, confirm the transaction in your wallet and you're done. You'll receive Lido staking tokens instead - for example, stETH in return for ETH and so on.
Do I have to report my LDO tokens to the IRS?
Yes, if you are a US citizen or resident, you are required to report any gains or losses from LDO, as well as any income from LDO, to the IRS as part of your income tax return. Failure to do so could result in penalties and fines.
What do you do with Lido staking tokens?
You can use your stTokens in a variety of DeFi protocols to compound your rewards, including Curve, Aave, MakerDAO, and 1inch.
What are the benefits of using Lido?
One of the main benefits of using Lido is that it lets investors earn staking rewards without having to lock up their asset, so you can continue to use an equivalent token of your asset on other investment platforms, while still earning rewards. As well as this, Lido helps users get around the pitfalls of self-staking, for example, with Lido, users don't need the minimum 32 ETH deposit in order to stake ETH.
