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Discussions/Celestia Improvement Proposals (CIPs)/CIP: Prevent auto-claiming of staking rewardsForum ↗

CIP: Prevent auto-claiming of staking rewards

Celestia Improvement Proposals (CIPs)3 posts359 views8 likesLast activity Feb 2025
TA
tac0turtleOP
Feb 20254

This forum is mean to facilitate a discussion around the proposed CIP (https://github.com/celestiaorg/CIPs/pull/251)

MU
musalbas
Feb 20252

In terms of selling rewards for tax reasons, I’m not sure it really makes a big difference because:

  • This doesn’t prevent the taxable event, it just delays it, until the holder has a bigger and bigger taxable event when they claim and may at some point be forced to capitulate (as they have to either claim all the reward or none of it).
  • Long-term, jurisdictions may not take the view that the taxable event is only on claiming, but rather on accrual (which I believe is already the case in the US).

That being said, if this is a simple change to implement that doesn’t introduce too much complexity, I think it’s probably worth it for UX reasons. Can you comment on how complex this would be to implement?

TA
tac0turtle
Feb 20252

That is true, it only delays it, but currently if you delegate more to a validator you are already delegating to, then you inadvertently triggered a taxable event. Its arguable what a taxable event is in crypto as currently taxes without guidance is a guess at best defined by fear.

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