Liquid Staking + DeFi: How advanced loop strategies are taxed
Liquid staking "loops" are strategies where you combine staking, lending and liquidity pools to multiply the performance on ETH. They are legal, but create multiple layers of tax complexity that require meticulous record-keeping.
What is a liquid staking loop?
Basic loop (stETH on Aave):
- You have 10 ETH. You stake them on Lido → you get 10 stETH.
- You deposit stETH in Aave as collateral.
- You borrow ETH (ex: 6 ETH) on Aave.
- You stake the borrowed ETH on Lido → you get 6 more stETH.
- You repeat the process.
Result: exposure to ~25 ETH staking with only 10 ETH equity. The staking yield covers the interest on the loan in Aave.
Risk: If the difference between stETH APY and Aave interest rate becomes negative, the loop loses money.
Basic loop tax events
Step 1: ETH → stETH (Lido)
- Market ETH transmission → GPO if transmission price ≠ acquisition cost.
- New stETH acquisition cost: value of the ETH transmitted in EUR.
Step 2: Deposit stETH into Aave (receive astETH)
- Possible transmission of stETH → acquisition cost of astETH = value of stETH deposited.
- Yields in astETH (rebasing) → periodic capital.
Step 3: Lending ETH on Aave
- Borrowed ETH is NOT income: it is debt.
- Variable debts in ETH generate interest payable → possibly deductible if the income generated is capital.
Step 4: Borrowed ETH → new stETH
- Transmission of lent ETH → cost in EUR of ETH at the time of staking.
- New stETH acquired with that value.
Step 5: New staking rewards
- The additional stETH also generates yield → movable capital.
Loop taxation: complexity in numbers
For a 10 ETH loop with 2.5x leverage (25 ETH effective staking):
- 5 initial transmission events (ETH → stETH in each iteration).
- Annual staking yield × 25 ETH = movable capital.
- Aave loan interest = possible deductible expense.
The wstETH loop in Maker
Another popular loop: use wstETH as collateral on Maker to mint DAI, and then use the DAI to buy more ETH:
- ETH → wstETH (Lido).
- wstETH → collateral in Maker.
- Coin DAI.
- DAI → ETH on Uniswap.
- ETH → plus wstETH. Repeat.
Prosecutor: Each step is an event. The minting of DAI (debt) is not income. Maker's fee stability → possibly expense. The liquidation of the vault (if ETH falls) → transmission of wstETH at the liquidation price.
The Pendle loop + EigenLayer
Ultra-advanced strategy (2024-2025):
- ETH → stETH.
- stETH → EigenLayer (restaking).
- Receive EigenLayer points + AVS points.
- Deposit to Pendle to receive PT-stETH + YT-stETH.
- YT-stETH acts as a "multiplier" of restaking points.
Prosecutor: Refer to the articles of EigenLayer (article 114) and Pendle (article 115). Each token is a potential broadcast event.
Registration: the key to fiscal survival
With multi-layer strategies:
- Export history from Etherscan or DeBank for each address.
- Use Koinly or Cointracking with import of all wallets.
- Document each layer with date, ETH equivalent in EUR, token received.
- Calculate the FIFO of each token (stETH, astETH, wstETH, etc.).
The most common mistake: declaring only the final result without declaring the intermediate streams.
Is there simplification possible?
There is no Spanish administrative rule that allows loop layers to be "consolidated." Each transfer is a separate taxable event.
Possible argument for simplification: if intermediate tokens (astETH as representative of stETH in Aave) are merely countable and not freely transferable → argue that they are not independent assets but rather a notation of rights.
Without binding consultation from the DGT on this point, the conservative position is to declare each transmission.
Total loop liquidation: closure
When you undo the loop:
- You withdraw stETH from Aave (burns astETH → broadcast astETH).
- You convert borrowed stETH back to ETH to repay the loan.
- You close the Maker vault (if applicable) → return DAI.
- You recover the collateral.
- You convert stETH to ETH (transmission of the remaining stETH).
Each step: new tax event.
Updated: April 2026 | Fiscal year: 2025