Glossary

Crypto Tax Glossary

Key terms and concepts used across our crypto tax guides, to help you navigate local rules with confidence.

Yield farming

Strategies that chase protocol rewards by providing liquidity or staking LP positions — high event volume for tax.

A DeFi pool where you deposit assets and receive LP tokens — deposits/withdrawals can each be taxable events.

Moving assets between blockchains via a bridge — frequently modeled as a disposal + acquisition in tax software.

Converting an asset into a tokenized representation on another standard or chain (e.g. BTC → WBTC) — may be a taxable disposal.

A protocol split that can create a new asset alongside the original — tax timing depends on local guidance.

Non-fungible token — a unique on-chain asset; tax treatment often mirrors other crypto disposals, with creator vs collector nuances.

Securing a network (typically proof-of-work) in exchange for block rewards — often taxed as income when received.

A cost-basis method that blends acquisition costs into a single average per unit (or pooled holding).

Highest-In, First-Out — sells the highest-cost lots first, often minimizing taxable gains when allowed.

Last-In, First-Out — cost-basis method that treats the newest units as sold first.

Where your keys and crypto live — on a platform (custodial) or under your own keys (self-custody) — with different reporting and risk profiles.

Classification of your crypto activity as private investment versus a business/trading activity — with very different tax outcomes.

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Bi-weekly crypto tax & regulation notes. Educational only, not tax advice.

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