Koinly for DeFi and NFT Traders: What It Catches and What It Misses in 2026

Why DeFi and NFT Activity Breaks Most Crypto Tax Tools

Straightforward buy-and-sell activity on a centralized exchange is the easy case for any crypto tax software. DeFi and NFT activity is where most tools start producing wrong numbers, because a single wallet interaction can trigger several taxable events at once: a token swap on a decentralized exchange is a disposal of one asset and an acquisition of another, a liquidity pool deposit can be treated as a disposal of the underlying tokens depending on the protocol’s mechanics, and a yield farming reward is ordinary income the moment it is received, valued at the price on that specific day. Getting this wrong is not a rounding error; it can mean under-reporting or over-reporting gains by a meaningful margin across a busy trading year.

What Koinly Actually Catches Automatically

Koinly connects to more than 800 exchanges, wallets, and blockchains, and importing a public wallet address pulls in the full on-chain history rather than requiring manual entry of every transaction. For DeFi specifically, Koinly’s classification engine handles the most common protocol interactions automatically, recognizing swaps on major decentralized exchanges like Uniswap, deposits and withdrawals from lending protocols like Aave, and even catching forgotten airdrops that show up in a wallet without ever being actively claimed. Independent estimates suggest this automatic classification correctly handles roughly 95 percent of typical DeFi activity without requiring the user to manually recategorize a transaction.

For NFTs, Koinly imports transaction data via the same public address method, and support is solid across EVM-compatible chains, Ethereum, Polygon, and BSC among them, automatically calculating gains, losses, and income from mints, sales, and transfers. For a trader whose NFT activity sits primarily on Ethereum or an EVM sidechain, this side of the coverage works close to seamlessly.

Where the Automatic Classification Actually Breaks

Solana NFT support is the clearest gap. Where EVM chains benefit from a mature, standardized token contract structure that classification engines can reliably parse, Solana’s NFT ecosystem uses different conventions that Koinly and most competitors handle less completely, often requiring manual entry or correction for transactions that would be classified automatically on an EVM chain. If your NFT activity is concentrated on Solana marketplaces, budget real time for manual review rather than assuming the same 95 percent auto-classification rate applies.

Complex multi-step DeFi strategies are the other consistent gap. A straightforward swap or a single-sided lending deposit classifies cleanly. A multi-protocol strategy, moving a token through a bridge, depositing it into a yield aggregator that itself deposits into several underlying protocols, then receiving a receipt token that represents a claim on all of it, often confuses the automatic engine because the receipt token’s cost basis and the underlying activity are not always self-evident from on-chain data alone. In these cases, Koinly will typically import every individual transaction correctly at the raw data level, but the classification of what each step actually means for tax purposes needs manual review before you trust the final report.

Cross-Chain Bridges: A 2026 Improvement

Koinly’s 2026 update specifically expanded handling of Layer 2 networks and cross-chain bridge transactions, an area that has historically been one of the messiest parts of DeFi tax tracking because a bridge transaction looks, from the software’s perspective, like an asset disappearing on one chain and reappearing on another with no obvious on-chain link between the two events unless the software specifically understands that bridge’s mechanics. The improved handling reduces, but does not eliminate, the amount of manual reconciliation needed for traders who move assets across multiple chains routinely.

The Manual Review Workflow That Actually Works

The practical approach for an active DeFi or NFT trader is not to expect a fully automatic report, but to use Koinly’s automatic classification as a first pass that handles the large majority of transactions correctly, then dedicate a specific review session, ideally monthly rather than saving it all for tax season, to the transaction types the software itself flags as unclassified or uncertain. Koinly surfaces these flagged transactions in a dedicated review queue rather than silently guessing, which is the single most useful feature for anyone doing meaningful DeFi volume: it tells you where to look rather than presenting a finished number you have to blindly trust or painstakingly re-derive from scratch.

Reconciling flagged transactions monthly, while the specific protocol interaction and your reasoning for it are still fresh, takes a fraction of the time it takes to reconstruct the same activity eight months later during tax season, staring at a wallet explorer trying to remember what a specific contract interaction was even for.

1099-DA and What Changes for DeFi Traders in 2026

Form 1099-DA reporting, rolling out for the 2025 tax year with forms reaching taxpayers in 2026, applies to custodial broker activity, meaning centralized exchange transactions. Pure DeFi activity through self-custodied wallets and decentralized protocols is not subject to the same broker reporting requirement, which means the burden of accurate record-keeping for DeFi specifically continues to sit almost entirely with the individual taxpayer rather than being partially offloaded to an exchange’s own reporting. This makes a tool that correctly classifies DeFi activity, and clearly flags what it cannot classify, more valuable for this specific trader profile than for someone whose activity is concentrated on a single centralized exchange that now issues its own 1099-DA.

A Realistic Monthly Routine for an Active Trader

A trader running regular DeFi activity across several protocols benefits from treating tax reconciliation as a recurring monthly task rather than an annual scramble. A practical routine looks like this: at the end of each month, open Koinly’s review queue and work through flagged transactions while the context is still fresh, specifically checking any receipt tokens from yield aggregators, any bridge transactions, and any NFT activity on non-EVM chains. Tag each resolved transaction with a short note about what it actually was, a specific swap, a specific liquidity deposit, so that if a similar transaction recurs next month it is faster to recognize and resolve. Over a full year, this adds up to perhaps ten to fifteen hours of focused monthly review rather than a single overwhelming weekend spent trying to reconstruct twelve months of complex on-chain activity from scratch under a filing deadline.

Exporting a Report That Actually Survives an Audit

Once the monthly review process has cleaned up flagged transactions, the report Koinly generates at tax time is only as defensible as the underlying wallet data it was built from, and a trader who has been through even a routine tax inquiry knows that the software’s output is a starting point for your own records, not a replacement for them. Export the full transaction history, not just the summary gain and loss figures, and keep it alongside your own notes on any manually reclassified transactions, specifically the receipt tokens, bridge transfers, and Solana NFT activity that needed correction. If a tax authority ever asks for supporting detail behind a specific reported figure, being able to show both the software’s classification and your own reasoning for any manual override is meaningfully stronger documentation than a final summary number alone.

This matters more for DeFi and NFT activity specifically than for simple exchange trading, precisely because the classification judgment calls are more numerous and less standardized across the industry. A tax preparer or auditor reviewing a return with heavy DeFi activity is more likely to ask clarifying questions about a specific complex transaction than about a simple spot trade, and having the reasoning already documented from the monthly review process, rather than trying to reconstruct it a year or two later, saves real time and reduces the risk of an inconsistent answer under scrutiny.

Who Gets the Most Value From Koinly Here

A trader whose DeFi activity sits mainly on Ethereum and major EVM chains, using well-known protocols like Uniswap, Aave, or Curve, gets close to full automatic coverage and should expect the review workflow to be light. A trader running frequent Solana NFT activity or complex multi-protocol yield strategies should plan for a genuinely manual monthly review process, using Koinly’s flagged-transaction queue as the starting point rather than expecting a fully hands-off report.

Either way, importing a wallet through Koinly and reviewing the flagged transaction queue monthly is a meaningfully better system than reconstructing a year of DeFi activity from scratch every April.

Marko Jambrek

Licensed architect in Zagreb, 30 years of practice (Vastu + sustainable design). Writes about AI tools through a lens of order and long-term value, tests before recommending.