Staking rewards generate too many transactions

I use Binance to stake a small portion of my crypto. This generates a couple of cents daily currently.
However, I quickly realize it is not worth it if I’m going to use Koinly as a tax report service as you charge based on number of transactions.
Your business model is not compatible with small level staking as it generates more cost than income this way.
Please review your business modell or find a way for people to make staking worthwhile even for small amounts. Maybe you can find a way to not count these types of transactions.

I think the same goes for services like Nexo.io, where interest for each assets is paid out daily. This adds a lot of transactions very quickly and forces you to go to the Oracle tier. It could be argued that this is the price model for Koinly and users will just need to pay more to keep using the service, but it makes it uneconomical for users with smaller holdings.

I also think their business model is flawed. You cannot charge based on lifetime usage. Imaging if Ford where charged by their bank based on their lifetime number of transactions. Their model should be based on monthly transactions and/or the total value of a users holdings. I am correct in thinking your main issue is exceeding the lifetime transactions figure?

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Yes please make transactions under a certain $ amount not count towards the transaction total. It makes it really expensive for people who have a bunch of microtransactions

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Instead of not counting small transactions you could, count only 1 per day per user. So we get a maximum of 365 transactions from staking or small mining per year. Of course I would be happiest to not have them count toward my transaction at all.

Are there other business models Koinly has explored? This could be in addition to your transaction based plans.

equity based business model:
price for tax plan = value of crypto assets at the end of the year * alpha + transactions * beta
where alpha and beta are percent values

example:
alpha = 1%
beta = .1%
mined $5000 of crypto → $50
5000 transactions each $1 → $5
total price for tax plan = $55

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I also have this issue with tiny rewards and airdrops from several exchanges. In the end I have had to just exclude this transactions by dropping the API for the Kucoin exchange - which makes next to no difference to my tax report as the amounts are so minuscule but I don’t like knowingly excluding information.

When the increased cost of generating the tax report outweighs the value of the holdings by a factor of 100:1 there is a problem.

I would very much like a way to either exclude transactions under a small threshold or group them into a single transaction.

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I was told by support some time ago, that Koinly could summarise multiple transactions and record only a single transaction each day. Unfortunately, I have not had the opportunity to test this myself.

I think I remember that I had to inform support which coin I wanted this to apply to and they would enable it.

Alternatively, the merge function could possibly be used manually as an interim measure.

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Great suggestions in the replies. Clearly this is an issue for many users including myself.
Small investors most also have the ability to use basic DeFi.
@koinly Please look into this.

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Agreed, i will likely not be using koinly for my taxes after all unless a change is made to their business model and they find a way to work with Binance US to fix their API / Exporting process.

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This is exactly the problem I’m facing with Koinly. I love the platform but if I am staking some cryptos it will add so many transactions each day that it makes Koinly unusable. Will this be changed in the near future? if not I will have to look elsewhere for my crypto accounting.

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Their business model is broken and needs changing. Can you image if Ford’s bank based their pricing on how many transactions Ford had made since they were founded in 1903. If they did, Ford would not use them, it is a nonsense.

Price should be based on annual transactions or a combination of annual transactions and total portfolio value.

Yes they need come up with a plan, as just using tio many transactions

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I assume transaction counts is their preferred method of charging since it probably relates directly to their overhead expense. More transactions means more data to store and more network bandwidth and processing time pulling the data and calculating it.

They should just raise the transaction limits. They might have made sense in previous years but there are going to be more and more transactions going forward and they shouldn’t stick with an old outdated pricing model.

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Hello Rae,

I totally understand your frustration and I assure you we are working to improve the staking reward integrations in Koinly, but, I can’t give any definite timeline on when this will be completed. What I can offer is a solution for now: a new wallet. You could setup a new wallet specifically for staking and import your staking rewards via CSV on a monthly basis, then aggregate them into one transaction so you remain within your plan limits. This could be the easiest way to handle this until our devs finish their work.

I hope this helps,

Anakin

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Sadly this isn’t really an option for Algorand where each transaction trigger rewards to be added to your balance. This means that for each Algorand transaction Koinly will generate 2 transactions. Maybe for Algorand specifically it could be treated as fees are treated?

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I also have a few wallets with more than 300 000 transactions each because of some specific tasks I am doing. I hope Koinly could have some understanding for specific use cases like these and allow at least infinite transactions for the highest tier subscription.

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This is a dealbreaker for me. Under no circumstance am I going to pay hundreds of euros for a plan when 99% of the transactions are micro-rewards (<=€0.1) from Binance flexible savings or staking. In just a couple of months I’m close to 1000 transactions from these yields.

I want to make my coins generate (however small) passive income for me with the hope of the values going higher and the compound interest adding up over time.

Would it be possible for Koinly to consider waiving transaction fees for everything < $1 or something like that?

Whilst I share the same frustration as everyone else on this one, we have to bear in mind that every transaction no matter how small causes a recalculation event for cost basis, gains, performance and tax position of your portfolio. The recalculation uses computing resources as does the storage of your data and this creates a cost for Koinly in terms of scaling and performance of their service.

In my opinion, a better model that would cut down on Koinly’s infrastructure costs and reduce the amount of transactions uploaded to their service would be to provide a small desktop utility or app that could ingest, process and pre-condition data on users devices before uploading to the back end service.

This is a clear example of where ‘Edge Computing’ would benefit everyone.

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same goes with cost (gas) fees. Why are they a separate transaction? They shouldn’t count towards the plan transaction count.

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While staking with Koinly does pose some challenges, I’d like to note that Ledger is a particularly good option to fix the Algo staking issue. Ledger is a hardware wallet company that I highly recommend and integrates great with Koinly. With Ledger, you receive the 5-6% staking rewards for your ALGO, but you CHOOSE when to receive the rewards. There is a counter that displays your current unclaimed reward count and a button that says “Claim Rewards” (in their desktop application), which generates a transaction to give you your rewards. This way, you only have to claim rewards when needed (and not receive rewards once a day).