Recently, there has been an analysis on the tax implications from FISO rewards. As such, we would like to open this discussion, hear the voices from our community and find the best way to minimize the tax burden for our community residing in countries that tax airdrop rewards as personal income tax.
Before we begin, I would like to clarify a few questions:
When is FISO end date?
When is Minswap DEX launch?
Late Nov or early Dec.
Are the rewards send to my wallet automatically?
No, users have to claim the rewards manually, thus users can choose when to claim rewards or to not claim at all. (users still get all ADA rewards, so there is 0 financial cost)
When are MINt tokens from FISO reward claimable?
10 epochs after FISO ended, which is from Nov 26th to Jan 15th.
When are MIN tokens from FISO reward claimable?
Since FISO MIN tokens have 45 days lock-up and 45 days of linear vesting period, the soonest users can claim MIN tokens is Jan 10th. After that, users have 10 epochs to claim MIN tokens, the claimable amount will vest linearly from Jan 10th until Feb 24th (45 days).
Can MINt be tradeable?
Yes, MINt is a Cardano native token with its own policy ID and asset name, hence it is tradeable on any DEX like any other token.
Can a dump happen at the end of this year because people are selling rewards to cover for tax?
Yes, but it is only applicable to MINt, since only MINt can be claimed this year.
What is MINt value for tax purposes?
Currently, there’re 2 interpretations:
- MINt is a native token that can have its own price on DEX, and thus its value is based on market price.
- MINt can be converted 1:1 to MIN after locking liquidity for 90 days, with a yield farm booster, hence its value is based on MIN’s price with some premium (due to booster) or discount (due to LP locking).
Because MIN can only be claimed starting from 2022, which is after DEX launches, the MIN tokens are going to have value anyways (i.e. from team seeding ADA/MIN liquidity pair on DEXes). As such, we could only minimize tax for MINt rewards.
There are many ideas floating around and we would like to list the most popular ones, as well as looking for more ideas from our community here:
- Decouple MINt role from MIN so its value won’t be MIN value with some premium/discount.
- Give some time between FISO ended and DEX launch, so MINt can be claimed before it is listed.
- Extend the claim period, so people can have more time to consider/consult next year.
- Put a notice/disclaimer when users claim tokens, so users won’t incur a tax burden unknowingly.
- Do a second public sale to “reset the market price”