How to Track DeFi Transactions with Koinly

Why Transaction Tracking Matters

DeFi generates a lot of taxable events. Every time you receive staking rewards, every time you enter or exit an LP, every token swap — these are all potentially taxable. If you wait until July to figure it out from memory, you'll miss things, get values wrong, and file inaccurately.

The solution is a crypto tax tool that pulls directly from the blockchain. Koinly is the best option for Australian DeFi users — it supports AUD tax year (July–June), has good ATO-compatible report formats, and handles DeFi transactions reasonably well.

Track with Koinly → (affiliate — we earn a commission at no cost to you)

Step-by-Step Setup

Step 1: Create a Koinly account

Go to koinly.io, create an account. Select Australia as your country and AUD as your currency. Set your tax year to July–June (Australian financial year).

Step 2: Add your wallet addresses

Go to Wallets > Add Wallet. Search for each chain you use: - Ethereum / Arbitrum / Base — paste your 0x address - Solana — paste your wallet address

Koinly will import your full transaction history from each chain automatically. This can take 5–15 minutes for wallets with long histories.

Step 3: Review auto-classifications

Koinly automatically tries to classify each transaction: buy, sell, staking reward, LP in/out, swap, etc. Review the transactions it flagged as "needs review" — these are usually complex DeFi interactions it couldn't classify confidently.

Common ones to fix: - LP entries/exits — make sure both legs are captured - Airdrop classifications - Reward claims vs principal withdrawals

Step 4: Set cost basis method

Go to Settings > Tax Settings. Select your cost basis method. For most Australian investors: First In First Out (FIFO) is the standard, but Optimised (Koinly's method) is worth considering as it can reduce your CGT liability by matching disposals against higher-cost lots. Discuss with your accountant which method to use before generating reports.

Step 5: Generate your tax report

Go to Reports > Australian Tax Report. This generates the schedules you need: - Capital gains summary - Income summary (staking, yield, airdrops) - CGT worksheet for your accountant

What Koinly Gets Right and Wrong

Gets right: - Basic wallet imports and price lookups - Simple swaps and CEX transactions - Staking reward classification on major protocols

Gets wrong (check manually): - Complex multi-step DeFi transactions (it sometimes splits these incorrectly) - New protocols it hasn't seen before - LP positions with impermanent loss calculations (it sometimes misses the IL component)

Budget 2–3 hours to review and correct classifications before you run your final report. Do this before 30 June, not after.

The One Thing That Saves The Most Time

Add your wallet addresses to Koinly the same week you start using DeFi — not after a year of transactions. Importing a clean history is trivial. Reconstructing a year of DeFi activity from memory is painful.

For a full overview of what the ATO expects from DeFi investors, read DeFi tax in Australia.

This is educational content, not tax advice. Consult a registered tax agent for your specific situation.