What Is the Tax Reporting Challenge Posed by Impermanent Loss in DeFi Futures?

Impermanent loss, which occurs in liquidity pools and not directly in standard futures, is not a realized loss for tax purposes until the assets are withdrawn. In the context of DeFi derivatives, the challenge is correctly identifying and tracking realized gains/losses from the derivative contract separate from the underlying liquidity pool's performance.

The lack of clear guidance complicates the characterization of such losses.