How to file your Rocket Pool (RPL) taxes with Koinly
Rocket Pool is a decentralized Ethereum liquid staking protocol, that helps investors earn staking rewards while maintaining liquidity through liquid staking tokens (rETH) or with a lower minimum ETH deposit, and earn RPL rewards. But your Rocket Pool transactions come with tax implications. Whatever your investments, Koinly can help you calculate taxes for thousands of ERC-20 tokens including RPL, and rETH tokens. 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 RPL
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 Rocket Pool transactions taxed?
The tax you pay on crypto - including RPL and rETH - all depends on where you live and your tax office's guidance on it, so read our crypto tax guides for specific information. However, broadly speaking, two taxes may apply to your RPL transactions:
Capital Gains Tax: When you sell or trade RPL tokens, you’ll usually pay Capital Gains Tax on any gain you make as a result of the transaction. There may also be additional tax implications for your rETH tokens.
Income Tax: When you earn new RPL tokens through staking, this could be seen as additional income and you may need to pay Income Tax based on the fair market value of your RPL tokens in your fiat currency at the time you received them.
As well as this, your rETH tokens have tax implications. Frustratingly, most tax offices haven't released specific guidance on DeFi transactions, so you (or preferably your accountant) will need to interpret the current guidance as it applies to your Rocket Pool staking transactions. Again, this varies so check your country's guidance. But generally speaking, your rETH tokens will be subject to Capital Gains Tax.
This is because when you add ETH to the protocol (unless you're running a node as well), you'll receive rETH - a token representing your staking deposit, the value of which increases relative to the rewards earned. You don't earn new tokens as your Rocket Pool staking rewards, instead, you'll only realize your staking rewards gain once you trade your rETH back for your original ETH deposit. As such, adding and removing ETH from Rocket Pool may be viewed as a crypto-to-crypto trade from a tax perspective and you may need to realize a capital gain or loss both when you deposit your ETH and when you trade your rETH tokens back.
Can the IRS track RPL?
The IRS, and other tax offices, have highlighted crypto as a key focus this tax season, and your Rocket Pool investments will be no exception. But can the IRS track crypto?
Your Rocket Pool 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 Rocket Pool and non-custodial wallets.
As always, we recommend reporting your crypto accurately to the IRS to avoid audits or crypto tax penalties.
How to get Rocket Pool (RPL) tax documents
The tax documents you'll need all depend on where you live and your tax office, but broadly speaking, you'll need to report your gains, losses, or income from crypto to your tax office in your annual tax return.
To do this for your RPL tokens, you'll need to identify each taxable transaction involving RPL 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 RPL tokens, as well as calculate the fair market value in your fiat currency for any RPL tokens viewed as additional income, like earning new RPL as a staking reward.
If you think that sounds time-consuming, you’d be right - which is why most investors use a Rocket Pool tax calculator like Koinly. Koinly can calculate your gains, losses, and income for more than 450,000 ERC-20 tokens - including RPL!
Of course, when we talk about Rocket Pool taxes, many investors will be wondering whether Koinly can help them calculate their other transactions relating to the Rocket Pool protocol, not just RPL tokens, and the answer is yes! Koinly can help you track and calculate any gains or losses from rETH transactions too. You just need to connect your blockchain to Koinly to do so using your public address. Here's how it works.
How to import Rocket Pool transactions to Koinly automatically
To import your Rocket Pool 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 Rocket Pool in order for Koinly to correctly identify your cost basis, transfers, sales, swaps, liquidity pool transactions and more.
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
Remember, you’ll need to do this for every wallet you use to interact with Rocket Pool in order to calculate your crypto taxes correctly.
It’s really helpful to name your wallets when you’re adding them to Koinly. This can help you find any transactions you believe have errors later on much more easily!
You may also be able to upload your transaction history to Koinly as a CSV file instead of connecting using your public address if you prefer, but this depends on the wallet you’re using. You can search for your wallet on our integration pages to find out more about how to get a CSV file from your wallet.
Your frequently asked questions
What is Rocket Pool?
Rocket Pool is a decentralized Ethereum liquid staking protocol, that helps investors earn staking rewards while maintaining liquidity through liquid staking tokens (rETH) or with a lower minimum ETH deposit, and earn additional RPL rewards.
What are RPL tokens?
RPL is the primary Rocket Pool protocol token. It can be used as a governance token so holders can vote on developments to the protocol, or it can also be staked on Rocket Pool as a kind of insurance for validators depositing 16 ETH minipools. As well as this, RPL can be sold and swapped like any other crypto token.
How can I get RPL tokens?
What is the current price of RPL?
Like all cryptocurrencies, RPL price varies based on market conditions and demand. RPL had a previous all-time high of $154.73 and a previous all-time low of $0.09118.
How many RPL tokens are there?
Rocket Pool as a circulating and total supply of more than 19 million.
What is the purpose of RPL tokens?
RPL is the primary protocol token for Rocket Pool. It can be bought, sold, and traded like any other token, and it's also used as a governance token. As well as this, investors staking 16 ETH on Rocket Pool to create a minipool and act as a validator also need to take RPL as a security promise to the protocol. This RPL acts as a kind of collateral to the protocol should the node operator ever be penalized, but they'll also receive RPL staking rewards.
Is RPL a good investment?
Rocket Pool is a popular decentralized ETH staking protocol with more than 425,000 ETH staked and more than 2,000 node operators. The protocol offers many benefits to investors looking to stake ETH who may not have the minimum 32 ETH required, or wish to retain liquidity whilst staking. However, all crypto investments come with risk and RPL is no exception. You should always DYOR to ensure you understand the risks before investing.
How can I store my RPL tokens?
RPL tokens can be stored in various cryptocurrency wallets that support ERC-20 tokens, like MetaMask and MyEtherWallet. But it's important to store your tokens securely and keep your private keys safe.
What blockchain are RPL tokens on?
RPL tokens are an ERC-20 token on the Ethereum blockchain.
Is Rocket Pool staking safe?
Rocket Pool is a technically sound protocol that hasn't yet faced any security issues or losses. However, there are still risks - one of the main risks being that rETH depegs from ETH. You should always DYOR to ensure you understand the risks of using any protocol before investing.
How do I use Rocket Pool?
To stake using Rocket Pool (excluding those who want to run a node), just go to Rocket Pool and select stake. Then select the amount of ETH you want to stake and you'll see the amount of rETH you'll receive in return, as well as the average APR and transaction cost. After this, simply connect your wallet and confirm the transaction.
Do I have to report my Rocket Pool transactions to the IRS?
Yes, if you are a US citizen or resident, you are required to report any gains or losses from Rocket Pool, as well as any income from Rocket Pool, 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 Rocket Pool staking tokens?
The big benefit of staking with Rocket Pool for many investors is that you maintain liquidity with your rETH tokens. You can use rETH tokens on protocols like Curve, Yearn and Alchemix to compound your rewards.
What are the benefits of using Rocket Pool?
One of the main benefits of using Rocket Pool is that the protocol allows investors to earn staking rewards whilst maintaining liquidity, and sometimes earn additional RPL rewards. As well as this, investors using Rocket Pool staking can avoid the minimum deposit requirements to become a validator and stake with as little as 0.01 ETH, instead of the 32 ETH required for solo staking.
What are rETH tokens?
rETH tokens are a token Rocket Pool stakers receive that represents their stake of ETH in the Rocket Pool protocol, plus rewards. These tokens accrue value based on the rewards earned.
