I am personally learning more and more about bonds. What are you into?
Honestly, right now I'm more curious about who/what is leading the social coverage scene for Fraxtal and ecosystem buidlers. Looking for more opportunities to connect with LP stakers.
I’d like to tackle this more. I’ve been sick the past couple weeks so my social media presence has been lacking a bit.
I am an LP staker. Help me, and everyone on the talking points of Adamant. 1. You have longevity in the space ✅ Why I have not used Adamant yet? I may be an edge case but, below are my reasons: 1. In my jurisdiction, I pay taxes on claimed rewards. I believe that the entire crypto market will be higher tomorrow than it is today. 🤷♂️ From a tax perspective, I would rather claim today, pay less taxes and wthdraw/swap roll in proceeds. Some people in different tax brackets may have different strategies. 2. Also, fees are super cheap on an L2 like Fraxtal. I don’t feel pain from claiming daily/swapping if my goal is to roll in. So, for me to use adamant, the frustration of claiming/swapping would have to be higher than my tax concerns since I believe the market will go up. Different people may have different concerns or, things they value. I want to use Adamant. You put time/energy/resources to build on Fraxtal and I want to support the Adamant protocol. My goal is to help people and myself see the value prop of Adamant while explaining to you my personal challenges. The floor is yours ser.
In the US, you pay ordinary income tax on those claimed rewards. With auto-compounding, it's cap gains. At the end of the year, you'd still have to pay ordinary income tax on rewards (even if you get scammed) but if you had net cap loss at the end of the year, you wouldn't have to pay tax from auto-compounding. I believe Adamant provides a receipt token? You also wouldn't pay cap gains of going in and out as only LP and could try to make it to 1 year holding period. Like you said before, is this benefit worth the auto-compounding fee? (There's NIIT which I mentioned before but won't get into again since it's confusing, and we've already talked about that so many times.)
I knew you were going to respond on this.
I always chime into these tax discussions so I get an idea of how many people are doing their taxes differently or being aggressive.
In your, hold for a year scenario: Let’s say the LP triples or more. You pay long term cap gains at much higher return. So, that is something to think about as well.
Long term cap gains cap out at 20% in the US doesn't it? Most likely it will be lower than ordinary income, and you'll be paying tax later. There's also option of selling 20% of the LP to stay in certain tax brackets. Yea the 1 year scenario isn't really realistic since very few LPs pay out a good APR for the entire year and usually better to swap somewhere else. I'm like you and have done very little auto-compounding so far and would rather hold rewards. Maybe in 2025 more auto-compounding.
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