An elastic supply token is a special type of token that aims to maintain a stabile price denominated in a fiat currency (USD, EUR etc). This is achieved through a mechanism of increasing and decreasing the total circulating supply. We will from now on refer to this as rebase tokens.
Ampleforth was the first rebase token to gain major popularity and to become listed on major exchanges. If hold Ampleforth on an exchange like FTX, you will notice that your AMPL amount will decrease or increase on a daily basis. This presents some challenges with regards to tracking your cost basis for accurate tax calculations which we will explain here.
We bought 950 AMPL on FTX and received 8 AMPL the next day from the daily rebase. Our holdings are now 958 AMPL after the rebase and the cost basis (acquisition cost) is still the same as originally - 1000 USD. After importing transactions from FTX using API, it will look like this:
As we can see above, the cost basis when disposing of 958 AMPL is calculated as 1007.01 USD instead of 1000 USD. To fix this, we need to do two changes:
Create a manual Buy transaction for 1000 USD → 958 AMPL
Tag the original Buy transaction as Ignore
The cost basis will now be tracked accurately and the gain realized when disposing of AMPL is also calculated correctly:
The same principle applies also if you have a negative rebase. What you need to do in all cases is to create a manual transaction with your total amount before selling and your original acquisition cost.
We are working on tracking this automatically in Coinpanda, but we don't have an ETA as of right now.