Joe David on Accounting for DeFi
What We Discuss With Joe David
The growth of financial instruments powered by DeFi is inevitable.
DeFi exacerbates the benefits of decentralisation: faster, more secure and transparent, and by getting rid of the middleman and instead using smart contracts, the cherry on the cake is that you get to enjoy higher returns than traditional finance.
But if the time for DeFi has come, the accounting bodies are still in their starting block (no pun intended)
One firm that has gained traction and made a name for itself as the leading crypto accounting firm in the UK, is Myna Accountants.
& Its founder Joe David, has been devoting his working hours to provide much needed answers to crypto accounting.
In this episode, you will learn;
- How to account for lending & borrowing into DeFi protocols;
- Accounting considerations for liquidity mining & yield farming;
- Wrapped tokens and their accounting implications, taking the example of wrapped bitcoin;
- Challenges clients face accounting for DeFi;
- Where additional guidance is required for accounting not to become a bottleneck for DeFi adoption, and much more.
Connect with
Joe
Shownotes
- Joe shares his nonlinear career path, and how he founded Myna (2:24)
- Why more institutions are adopting DeFi (exponential TVL growth) (6:38)
- Accounting change from ETH as intangibles to CETH as receivables in decentralized lending with Compound (8:52)
- Accounting challenges for liquidity mining & yield farming (12:57)
- Wrapped Bitcoin and its accounting implications (16:38)
- Airdrops accounted for as income (19:10)
- Challenges faced by clients for DeFi adoption (22:34)
- Tools like Cryptio & Request Finance facilitate crypto accounting (25:22)
- Can accounting be a bottleneck for DeFi adoption (29:19)
- HMRC guidance of DeFi lending and capital gains tax treatment (31:37)
- Challenge for Myna Accountants to scale (34:58)
