What Are the Tax Implications of Staking Rewards for Investors?

The tax implications of staking rewards vary by jurisdiction, but generally, the rewards are treated as ordinary income at the time they are received, based on their fair market value at that time. This income is often subject to capital gains tax when the tokens are later sold.

Investors must track the cost basis of the rewards accurately. This tax complexity adds an operational burden and may slightly reduce the net, after-tax intrinsic value for investors.