Decentralized Futures: ClearDotTax - One click tax computation for Polkadot

Substrate/Dotsama is an extremely challenging ecosystem to track transactions and estimate tax liability using existing crypto tax tools. While solutions like subscan track all transactions across parachains, they don’t track claimable/accrued income such as lending/staking/yield farm rewards; and none of the products provide a no-brainer tax report based on the user’s jurisdiction.

ClearDotTax aims to build one-click tax computation for Polkadot, Kusama, and their parachains.

Despite having a discussion about Polkadot Tax Tools about one year back in the forum, we don’t have a dedicated product that computes taxes for users in the ecosystem yet.

Ecosystem Fit

The above discussions in the Polkadot Discord server indicate a dire need of a dedicated tax tool for the ecosystem.

Past attempts at building similar tools

Tax Tools on other chains/ecosystems

However, these tools don’t have support for Polkadot/Kusama and their Parachains (except some EVM based ones).

Product Details

Designs/User Flow

Preliminary designs can be viewed here: ClearDotTax - Figma

Key Deliverables

Transactions Dashboard

To view and filter all transactions/income.

Advanced transactions module

To track users’ claimable income (fees/rewards) across the supported protocols:

  1. Lending Protocols
    a. Moonwell
  2. Staking Protocols
    a. Native DOT/KSM
    b. Manta
    c. Astar
    d. Hydradx
    e. Acala & Karura
  3. Yield Farms
    a. Stellaswap
  4. Liquidity Pools
    a. Stellaswap
    b. Acala & Karura
Wallet Dashboard

To add and track your wallet(s).

One-click Tax Report Dashboard

To view your tax report for your jurisdiction (starting with the US, UK, Germany, and Switzerland) in a selected time period.

GraphQL API
  • To fetch users’ transactions across Polkadot and Kusama relay chains; and all major parachains of Polkadot & Kusama (ones supported by Subscan).
  • To compute and fetch advanced transactions (claimable income) from the supported protocols.
  • To compute and return users’ tax report based on their transactions, and the laws in their selected jurisdiction.

Team

Experience

We’ve been building within the Polkadot ecosystem since 2020:

  • YieldScan - Staking dashboard for Polkadot and Kusama
    • 118 whale wallets natively staking $39M with $40k TTM revenue
    • 9 figures in transaction volume
    • backed by Web3 Foundation Grants
  • YieldBay - Yield farming hub for Dotsama

Team Members

  • Team Lead/Researcher: Raj
    • Building in the Polkadot ecosystem since ~2.5 years - led engineering at YieldBay
    • Web3 Researcher/Rust Engineer
    • Prev built products to solve for blockchain information asymmetry in the Filecoin ecosystem
  • Lead Engineer: 0xDeep
    • Rust/Full-Stack Engineer
    • Smart contract Auditor
    • Prev wrote systems to process real-time data at a HFT firm
  • Product Designer: Axshay

Future Plans

Financing

We plan to charge a small fee for helping users compute their taxes. It would follow a freemium model - free up to a fixed number of transactions (eg. 100), and tax computation for the remaining transactions would require a subscription to our platform. This will help cover our infrastructure costs and reduce our reliance on grants.

Growth & User Onboarding

We plan to create a discord/telegram community dedicated to helping people do their Dotsama taxes.

Long-term Plans

  • Add support for more jurisdictions.
  • Make adapters like DefiLlama to make it easy for anyone to add support for new protocols/chains.
  • Add features in the product to help users reduce their tax liability legally.

PS. Would love your feedback.

2 Likes

Seems like a great product! Can you please add support for Singapore as well?