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?

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

3 Likes

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.

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.

2 Likes

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