Last updated on 7 August 2026
Rebasing Tokens: The Nightmare of Taxing AMPL & OHM
Every rebase in tokens like AMPL or OHM can technically trigger a taxable event.
That single fact makes rebasing tokens one of the hardest areas in crypto taxation today. Most people don’t realise that when the supply of a token in your wallet changes automatically, it can count as a disposal or a gain in the eyes of tax authorities. And the bigger issue is most crypto tax software does not track these events properly.
This blog will explain what rebasing tokens are, why they are so difficult for tax purposes, why your tax software often gets it wrong, and what you can do about it.
What are rebasing tokens?
A rebasing token is a cryptocurrency with a supply that adjusts automatically at set intervals. Instead of the price staying stable, the number of tokens you hold changes while your overall value should, in theory, stay the same.
- AMPL (Ampleforth) is one of the earliest examples. It adjusts supply daily to target a value of around $1. If demand is high, more tokens are issued to wallets. If demand is low, tokens are burned from wallets.
- OHM (OlympusDAO) is another, but it uses rebasing alongside bonding and staking models. Holders may see their balance go up daily even without trading.
For example:
If you hold 100 AMPL and the protocol decides to expand supply by 5%, you wake up with 105 AMPL in your wallet. You didn’t buy them, but they appear automatically.
Why is this a tax nightmare?
Most tax systems, including the UK and US, treat crypto as property. This means every change in what you hold can be seen as a taxable event.
When a rebase happens:
- You may be considered to have “received” new tokens. That can be taxed as income.
- Or, if tokens are removed, you may be seen as having “disposed” of assets. That can be taxed as a capital gain or loss.
That means even if you did nothing; no trading, no selling, your wallet is generating taxable actions in the background.
Example in numbers
Say you bought 100 AMPL at £1 each. That’s £100 invested.
Next day, a positive rebase gives you 105 AMPL. At that moment, each AMPL is worth £0.95, so your wallet is still worth about £100. But tax rules may say the extra 5 AMPL is income worth £4.75. That’s taxable.
If the next week a negative rebase takes tokens away, you now hold fewer than before. That could be treated as a disposal, requiring capital gains reporting.
HMRC Guidance (Cryptoassets Manual) says any increase in the number of tokens you hold can create a tax event. That means UK investors face the same challenge.
For more detail on how crypto events are treated under HMRC rules, see our guide on CARF and DAOs: What It Means for UK-Based Web3 Founders.
Why does crypto tax software miss it?
Most tax software works on simple transaction data pulled from exchanges and wallets. It looks for buys, sells, swaps, transfers, and income.
But a rebase is not a normal transfer. On-chain, it may not show as a standard transaction. Your wallet balance just changes. Some block explorers log it differently, and some do not show it clearly at all.
As a result:
- The software may think nothing happened.
- Or it may log the wrong cost basis.
- In many cases, your tax report ends up under-reporting or over-reporting income.
This is a serious issue for compliance, especially as HMRC in the UK and the IRS in the US are increasing audits on crypto activity.
Why does it matter in 2025?
Rebasing tokens are less hyped than in 2021, but they are still active in DeFi. Projects like AMPL, OHM forks, and other elastic-supply assets continue to operate. Some DAOs still use rebasing mechanics for treasury management.
For tax reporting, ignoring these events is risky. Even if your portfolio is small, missing taxable income or disposals can lead to penalties.
And while some investors are focusing on tax-efficient investment strategies in 2025, rebasing tokens make that task even harder.
For practical approaches you can use alongside compliance, see our article on Tax-Efficient Investments for UK Residents in 2025.
What can investors do?
1. Track rebases manually
Keep a personal record of your wallet balances before and after each rebase. Note the token amounts, the time, and the value in your local currency. Saving screenshots from block explorers or portfolio trackers can help build an audit trail.
2. Use spreadsheets for accuracy
Relying only on automated tax software is risky. A custom spreadsheet allows you to log every rebase, calculate cost basis, and record the fair market value of tokens added or removed. This gives you a cleaner picture of income and disposals.
3. Get professional support
Rebases create complex tax questions. Working with a crypto accountant ensures that your reports reflect the right treatment under local tax rules. This reduces the chance of errors, penalties, or disputes with tax authorities.
If you want expert help managing rebasing tokens and other complex crypto tax issues, book a 30-minute FREE call with our team today.
Conclusion
Rebasing tokens like AMPL and OHM were designed with smart economics in mind, but their tax consequences are messy. Every rebase can mean income or disposal in the eyes of tax law, even though your total value may not change. Traditional crypto tax software often fails to record these events properly, leaving investors exposed.
The safest approach is manual tracking and professional help.
If you are holding rebasing tokens or have traded them in the past, don’t risk inaccurate tax reporting. At Crypto Accountants, we specialise in complex crypto tax issues, including rebases, DeFi income, and cross-border compliance. Get expert guidance today to stay compliant and avoid costly mistakes.
People Also Ask
Are rebasing tokens always taxable?
Yes, in most tax systems, any increase or decrease in your token balance can create a taxable event. Treatment may differ between income and capital gains depending on local rules.
Can I ignore small rebases?
No. Even small changes are technically taxable. Some jurisdictions allow de minimis thresholds, but HMRC and IRS expect accurate reporting.
Why doesn’t my crypto tax app show rebases?
Because most apps track only standard transactions like buys and sells. Rebases often don’t appear as clear transfers, so the app misses them.
Is there any guidance specific to rebases?
Not yet. Tax authorities have not issued rebasing-specific rules, but existing income and capital gains laws still apply.
