When you hear Blockchain, a public, digital ledger that records transactions across many computers so that any involved record cannot be altered retroactively. Also known as distributed ledger technology, it's the backbone of everything from Bitcoin to DeFi apps. It’s not magic—it’s code, consensus, and cryptography working together to remove middlemen. Every time you send ETH, stake tokens, or earn rewards from a liquidity pool, you’re interacting with this system. And if you’re in the U.S., the IRS is watching every move.
Crypto, digital or virtual currency that uses cryptography for security and operates independently of a central bank. Also known as cryptocurrency, it’s not just Bitcoin or Ethereum—it’s hundreds of tokens, each with different rules, uses, and tax treatments. When you earn rewards from Yield farming, the practice of earning interest or rewards by providing liquidity to decentralized finance protocols on Uniswap or Compound, you’re not just making money—you’re triggering a taxable event. The IRS treats every token you receive as income, based on its dollar value at the moment you get it. No receipt? No problem. The blockchain doesn’t lie.
People think crypto is all about price charts and moon missions. But the real work happens in the background: tracking transactions, calculating cost basis, understanding when a swap becomes a sale, and knowing how DeFi tax rules change year to year. In 2025, the tools are better, but the rules haven’t softened. If you’re earning rewards, you owe taxes. If you’re using DeFi, you need records. If you’re confused, you’re not alone—but you’re also not off the hook.
This collection cuts through the noise. You’ll find clear breakdowns of how yield farming impacts your tax return, what platforms track your rewards automatically, and how to avoid penalties without hiring an expensive accountant. No fluff. No jargon. Just what you need to stay compliant and smart in a fast-moving space.
Yield farming in DeFi generates taxable income in the U.S. every time you receive rewards-whether in ETH, USDC, or new tokens. Learn how to track, value, and report these earnings to avoid IRS penalties in 2025.
