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Chandan - CoinTracker
Updated August 1st, 2023:
As a user, I would like CoinTracker to correctly import my ETH2 transactions. This includes conversions between ETH and ETH2, rewards, accurate balances, and post-merge treatment.
Before staked ETH withdrawals were enabled
(as part of the Shapella upgrade),
Kraken
chose to represent ETH (non-liquid) staked with Kraken using the token symbol
ETH2.
Due to this users experienced the following:
  • On Kraken, Staking ETH would decrease user ETH balance, and increase your ETH2 balance.
  • However, this swap / staking mechanism is not always exposed as a transaction, resulting in balance issues for both ETH and ETH2.
  • On Kraken, staking rewards were paid out as a mixture of ETH and ETH2 - with separate transactions for a period of time.
Since exchanges represented staked ETH with a different asset (instead of a transfer of ETH between sub-accounts) has caused discrepancies for consistently handling tax calculations.
  • In some cases ETH → ETH2 swaps were being treated as taxable disposals of ETH, which is not the intended treatment.
  • To handle this, CoinTracker added custom logic that classifies ETH → ETH2 swaps as 'Transfers' in our accounting engine. This resulted in CoinTracker treating ETH lots as ETH2, in order to preserve cost basis etc.
  • However, users may see issues with Performance tracking, as there is no record of the cost basis transfer - resulting in incorrect cost basis values for ETH and ETH2. Our team is working to improve how we hand ETH → ETH2 cost basis tracking.
Now staked ETH can be withdrawn
, Kraken is retiring the concept of ETH2, and ‘automatically converting’ ETH2 balances to ETH.
  • It is to be determined whether this ‘automatic conversion’ is represented with a transaction, or just a reported balance change. In either case, this causes balance differences if it doesn’t line up with a user’s transaction history that includes ETH2 transactions.
ETH2 staking on Kraken can very much so be confusing! Users can either reconcile transactions manually by creating new transactions for missing transactions OR editing incorrect transactions. To ensure your transaction history is as accurate as possible CoinTracker recommends users export their ETH and ETH2 transaction history from Kraken and reconcile any missing or incorrect transactions.
We apologize for the inconvenience! We will be updating this post as we improve this experience.