Individual Investors
Individual investors represent the largest and most immediately impacted user group in the crypto ecosystem when it comes to tax compliance. From casual traders to long-term holders and yield farmers, most users face the same core challenge: navigating complex, country-specific tax regulations with tools that were never designed for decentralized finance.
TaxChain addresses this gap by offering automated, jurisdiction-aware tax reporting tailored specifically to the needs of individuals, while maintaining user sovereignty, privacy, and composability with the broader Web3 stack.
Key Pain Points for Individual Investors
Fragmented Activity Across Chains & Platforms Users often interact with multiple wallets, centralized exchanges, and DeFi protocols—generating hundreds or thousands of transactions across Ethereum, Solana, Polygon, Arbitrum, and more. Traditional tax software struggles to ingest and unify this data, especially when activity spans non-custodial wallets or cross-chain bridges.
Manual Record-Keeping and Error-Prone Reporting In the absence of a unified solution, users are forced to manually export CSV files, guess at fiat conversion rates, and self-declare taxable events without confidence in their accuracy.
Regulatory Uncertainty & Fear of Non-Compliance With tax rules differing by jurisdiction—and changing year to year—many users are left unsure whether their staking rewards are taxable income, if their NFT sale triggers capital gains, or whether their DeFi positions affect their holding periods.
How TaxChain Solves These Problems
Seamless Transaction Tracking & Classification TaxChain automatically tracks on-chain activity across supported networks and wallets in real time. All transactions are automatically classified using the protocol’s hybrid rule-based + machine learning engine to identify taxable events such as trades, airdrops, staking rewards, LP deposits/withdrawals, NFT sales, and more.
Local Tax Logic by Country TaxChain is fully localized for countries such as Germany, Austria, Switzerland, and France—with each jurisdiction’s logic implemented as a versioned rulebook that interprets local tax law into algorithmic rules. For example:
Germany: Applies 1-year holding period exemption for private disposals.
Switzerland: Differentiates between private wealth and professional trading.
France: Applies flat-rate taxation on capital gains and income (PFU).
Monthly Tax Reports, Ready for Filing Users receive monthly audit-ready tax reports in both human-readable (PDF) and machine-readable (JSON/XBRL) formats. These reports include:
Realized gains/losses
Income events (e.g., staking, airdrops)
Trading activity
Wallet balances
Cost basis and holding periods
Reports are formatted to match national filing systems (e.g., Anlage SO in Germany, Formulaire 2086 in France), making year-end tax filing as simple as uploading a file.
Secure Sharing with Tax Professionals If a user works with a tax advisor, they can mint a Permission NFT (pNFT) that grants scoped, time-limited access to their TaxChain reports—without revealing wallet keys or granting control of their data. Advisors can download only what the user authorizes, and every access is logged and verifiable.
Privacy by Default All user data is encrypted end-to-end. Reports are generated locally or in verifiable sandboxes, and storage is handled via encrypted IPFS with user-held decryption keys. TaxChain never has access to raw data or private keys.
Non-Custodial and Wallet-Native Users connect directly via their self-custody wallets (e.g., MetaMask, Phantom, Ledger). There are no logins, passwords, or centralized dashboards. Tax compliance becomes an invisible, passive layer that runs on top of everyday Web3 activity.
Typical User Journeys
Casual Trader in Germany
Buys ETH and SOL on Binance, transfers to MetaMask.
Swaps tokens on Uniswap and provides liquidity.
Receives staking rewards via Lido.
TaxChain classifies all activity, tracks holding periods, and applies Germany’s tax logic.
After one year, long-term ETH gains are automatically recognized as tax-free.
NFT Collector in France
Mints and trades NFTs on OpenSea.
Claims token rewards from an NFT staking program.
TaxChain detects NFT income vs. disposals, applies France’s flat tax rules, and separates collectible asset classes.
The collector downloads a year-end report and files it via Formulaire 2086.
Cross-Border Nomad (Austria → Switzerland)
Starts as an Austrian resident, later moves to Switzerland.
TaxChain allows dynamic jurisdiction tagging per calendar month.
Reports for each year reflect the correct legal regime for each location, avoiding double taxation.
Benefits for Individual Investors
Automated Classification
No more manual tagging or categorization of crypto events
Jurisdictional Accuracy
Reports match national law and filing formats exactly
Self-Custodial
Users retain full control over their data and wallets
Audit-Ready Reports
Seamless handoff to tax authorities or advisors if needed
Cost-Basis Tracking
FIFO, LIFO, and average basis methods handled automatically
Monthly Granularity
Ongoing compliance, not just year-end panic
Advisor NFT Access
Simple, secure collaboration with tax professionals
In short, TaxChain transforms the tax experience for individual investors from a stressful, manual, and error-prone chore into a fully automated, legally robust, and user-controlled process—without ever compromising on decentralization, security, or flexibility.
Whether you're a casual trader or a DeFi power user, TaxChain ensures that your compliance keeps pace with your innovation.
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