Liquidity Cost basis

Koinly Support
1

So I have imported all wallets, bsc chain, and polychain and exchanges everything!
So almost every one Labeled Liquidity out has massive gains because my cost basis on the LP token for example:

56.07241804 CAKE-LP Binance Smart ChainBinance Smart Chain

1,982.23603996 ADA Binance Smart ChainBinance Smart Chain

This is showing a 2375 profit because it only shows the value of the ADA and the CAKE-LP is at 0

I have tons of these with different coins like BNB and others all messed up. It also doesn’t let me change the value of the LP token like CAKE-LP.

Same goes for Liquidity in. It showing a profit, taking the cost basis then taking the value when there is no sale!

BINANCE SMART CHAIN

  • 12.00656321 BNB $932.08 cost basis
  • 53.35642594 CAKE-LP ≈ $3,250.13 • $2,318.06 profit
Petur_Koinly 2

Hi James,

Liquidity transactions will be treated as regular trades (ie. taxable) by default. You can change this by disabling a setting called ‘Realize gains on liquidity transactions’ if you believe that these should not be taxed.

LP tokens having a $0 cost-basis is a common issue and it’s usually because the LP tokens have been withdrawn and deposited to your wallet which causes Koinly to lose track of the cost-basis.
These withdrawals and deposits show up on the blockchain if you have been farming/staking these LP tokens but they look identical to regular deposits/withdrawals so that’s how Koinly imports them.
To fix this, you can tag all of the LP Withdrawals and Deposits as ‘Pool’ transactions. These labels will tell Koinly that the tokens were always your property even though they were leaving your wallet.

So, in short:
Find all Withdrawals that were actually just transfers to the farm and mark them as ‘Sent to pool’.
Find all the Deposits that were actually just transfers from the farm and mark as ‘Received from pool’

Best regards,
Petur

1 Like
3

So anything labeled liquidity in or out I cant seem to change the label to pool. The only options are swap or trade on the drop down arrow.

Petur_Koinly 4

Hi James,

You should not be labeling the Liquidity in/out transactions.
You need to label all the Deposits and Withdrawals of LP tokens as described in my previous post.
You can find these by filtering by ‘Deposits and Withdrawals’ on your Transactions page.

Best regards,
Petur

5

So I did that with withdrawls and deposit, but the Liquidity out cost basis are messed up still. Also Liquidity in is showing profits seeing it as a swap or trade or whatever its doing but its taking 1 token ie sxp and showing profits on the cake LP token which consist of 2 tokens not understanding why its doing this.
See below

Liquidity out

5:18 PM

BINANCE SMART CHAIN

Liquidity out

3:12 AM

BINANCE SMART CHAIN

  • 67.97548818 CAKE-LP $0.00 cost basis
  • 7.54594183 BNB ≈ $3,591.88 • $3,591.88 profit

Liquidity in

7:13 PM

BINANCE SMART CHAIN

  • 1,188.34439416 SXP $569.20 cost basis
  • 60.32042914 CAKE-LP ≈ $3,540.79 • $2,971.59 profit

Another Example this is doubling my profits! This is not correct this is the same transaction also it was a BNB/BUSD Liquidity pool. when exiting this is doubling a zero dollar cost basis so its showing I made 7,000 some odd dollars in profit which isn’t the case.

Liquidity out

3:12 AM

BINANCE SMART CHAIN

  • 67.97548818 CAKE-LP $0.00 cost basis
  • 7.54594183 BNB≈ $3,591.88 • $3,591.88 profit

Liquidity out

3:12 AM

BINANCE SMART CHAIN

  • 67.31197695 CAKE-LP $0.00 cost basis
  • 3,556.82382012 USDT ≈ $3,556.82 • $3,556.82 profit
Petur_Koinly 7

Hi James,

There are probably some CAKE-LP transactions that haven’t been tagged.
I can take a look at this for you if you share your email address by sending a PM or contacting our support team.

Best regards,
Petur