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How to file your MakerDao (MKR) taxes with Koinly

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Written byMichelle Legge | Crypto Tax Education

How to do your MakerDao (MKR) taxes with Koinly 

MakerDAO is a decentralized autonomous organization that develops technology for borrowing and saving decentralized stablecoin Dai on the Ethereum blockchain - letting anyone, anywhere lend or borrow money without the need for centralized institutions like banks or crypto exchanges.

  1. Sign up to Koinly and choose your country and currency
  2. Connect Ethereum with Koinly to import all your trades safely and securely - including ERC-20 tokens like Dai
  3. Koinly identifies the cost basis of your tokens and coins, as well as your taxable transactions
  4. Koinly calculates any capital gains, losses, and income from your taxable transactions
  5. Koinly generates your crypto tax report - ready to help you file with your tax office or hand it over to your accountant.

How to import Maker transactions to Koinly automatically

To import your Maker transactions, you'll need to connect each wallet you use to Koinly. This is easy to do, you just need your public address - and we have steps on how to get your public address for all the most popular wallets on our integration pages.

If you're using multiple wallets to interact with Maker, you'll need to get your Ethereum address for each wallet in order to get your complete transaction history. Here’s an example of how it generally works.

On wallet

  1. Open or log in to your wallet
  2. Select the blockchain you’d like to connect to - in this instance, Ethereum
  3. Copy your public address

On Koinly

  1. Sign up or log in to your Koinly account and go to the wallets page
  2. Search for and select the blockchain you’d like to connect to - in this instance, Ethereum
  3. Give your wallet a name - for example, MetaMask
  4. Paste your public address
  5. Select import

How do I troubleshoot MakerDAO my integration to Koinly?

Problems connecting to Koinly? No worries - there's help at hand:

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What is MakerDAO?

MakerDAO is a decentralized autonomous organization (also occasionally known as a decentralized autonomous corporation).

A DAO is an organization that's designed to be automated by smart contracts and decentralized by existing outside of a single government or corporations, instead it's controlled by organization members, which can be anyone who wants to invest. 

MakerDAO and the Maker protocol was founded by Rune Christensen and a group of devs in 2015. The idea of the protocol was to allow investors to use their crypto assets as collateral to borrow DAI.

The protocol and organization has developed far beyond this initial scope now. But originally  the purpose of the Maker protocol was as simple as any investor with a Web3 wallet - like Metamask - could deposit ETH into the Maker protocol and borrow DAI.

Nowadays, the Maker protocol is a core layer of the Ethereum DeFi ecosystem - supporting many other protocols.

What is MKR?

As well as DAI, MakerDAO has another native token - MKR. The MKR token is a utility and governance token. MKR holders can vote on various aspects of MakerDAO - like developers, road maps and proposals.

You can buy MKR tokens through a huge variety of crypto exchanges - both centralized and decentralized. Similarly, you can also hodl and sell MKR tokens, as well as stake them to earn. 

At the time of writing, MKR is valued at $1,762 - so it’s no small sum!

What’s Oasis.app?

So now we know the Maker protocol essentially mints DAI in exchange for loaning crypto - letting investors use DAI for a variety of other investments. Simple.

So where does Oasis.app fit into it all? 

Oasis is the front end access to the Maker protocol - so it’s the part investors actually interact with. There have been various versions of Oasis throughout the years including OasisDEX, Oasis Trade and finally Oasis.app.

How to use Maker

To use the Maker protocol, all you need to do is head over to oasis.app and connect your wallet. Oasis.app supports:

  • MetaMask
  • WalletConnect
  • Coinbase wallet
  • Portis wallet
  • My Ether Wallet
  • Trezor
  • Gnosis Safe
  • Ledger¬†

Once you’ve connected your wallet - you can use any of the Oasis products available.

What can you do on Oasis.app?

There are three main investment options on the Oasis.app:

  • Maker vault
  • Borrow DAI
  • Oasis multiply

The Maker vault is a core component of the Maker protocol. It's where you deposit your crypto collateral to create DAI. At the moment, you can deposit the following cryptocurrencies to the Maker vault:

  • ETH
  • WSTETH
  • WBTC
  • LINK
  • UNI
  • YFI
  • MANA
  • MATIC
  • GUSD

As well as this, you can also deposit multiple Uniswap liquidity pool tokens, for example DAI-ETH LP tokens or WBTC-ETH LP tokens.

Once you’ve added your collateral, you’ll be able to use both the borrow and multiply products on Oasis. Let’s take a quick look at both.

Borrow

Once you've deposited the crypto you wish to use as collateral to your Maker vault - just pick a borrow product. For each asset, there's normally a variety of borrowing products available - each with a different minimum collateral ratio and variable annual fee. 

Multiply

Oasis multiply lets users utilize their deposited collateral to both borrow DAI and create multiplied positions, all from one single spot. Multiplied positions are similar to leveraged or margin positions - but you don't need to borrow funds from another party to open a position. Instead it’s all automated by smart contracts.

So where you could have previously deposited ETH, borrowed DAI, then used that DAI to buy more ETH - the multiply product automates all this process for you into one simple step. 

Like with borrow - you just need to pick the asset and your multiply product. Each multiply product has a different maximum multiple and variable annual fee.