Introducing Tax Heaven🏝️
Realize Crypto Gains, Without Triggering Taxable Events.
Our Website:http://heaven.tax/
Join discussions in our Discord: https://discord.gg/pmYvhSZVCb
Telegram: https://t.me/taxheaven_loan
Don’t miss out on any updates by following our twitter account! @Taxheaven_loan
The gatekeepers also have an account: @BabyAngel_Gate
Users of DeFi lending platforms such as MakerDAO and Compound are exploring many different use cases for these apps, apart from their obvious utility as access to capital leverage.
One such use case is tax strategies.
Investors may feel reluctant to sell their crypto assets for fiat currencies or other crypto since such sale is usually considered a taxable event which may trigger capital gains tax.
On the other hand, borrowing stablecoins against crypto collateral is not considered a taxable event in most tax jurisdictions.
A user trading borrowed stablecoins will only be taxed on the gains from their trades, not on the loan transaction.
This is where lending platforms come in.
🏝️Heaven is here
Tax Heaven focused on this important utility that lending protocols were providing and took it one step further.
Wouldn’t it be interesting if you could borrow the same crypto (ERC20) as the collateral that you put up?
Tax Heaven works in easy steps:
- Lend your ETH/ERC20 token to the Tax Heaven protocol. The current interest rate is set at 0.0% per annum considering the zero/negative interest rate policies of governments and central banks around the world, actual bond yields, inflation and inflation expectation data, among other things.
- Borrow the same token that you put up as collateral from the Tax Heaven protocol. Because you’re borrowing the same token as the collateral, you are hedged against any price movements. This allows a collateral factor of 99.5%. There is effectively no forced liquidation.
- Use the borrowed tokens as you wish.
- Repay the loan or do not repay and forfeit your rights to the collateral (no penalty or fees will be incurred).
You may sell these borrowed tokens immediately upon receipt without realizing any capital gains tax (assuming that the price of the tokens (in fiat currency terms) have not fluctuated during the time you borrowed and when you sold. Price appreciation during that time may be subject to taxation).
This is because you are selling the borrowed tokens which have tax bases equal to the market value of the tokens at the time of borrowing.
As far as we know, there has never been an incident where taking out a loan on MakerDAO was considered a taxable event.
Tax rules are different in every jurisdiction and unique to individual circumstances and situations.
Consult your tax, financial or legal advisor before using Tax Heaven.
Tax Heaven Use Cases
Here are some use case scenarios for anyone with unrealized gains on their crypto!
📈Mid-term Traders
Your basic stance is to hold ETH.
But depending on market conditions, you may want to trade your ETH (with healthy unrealized gains) for bitcoin.
Or perhaps you want to ride the waves with an exotic DeFi token but just during altcoin season.
Now you can!
When you feel like going into bitcoin, lend ETH to Tax Heaven, borrow ETH, and use that ETH to buy bitcoin!
Same goes for that exotic altcoin that you want to speculate on.
When you want to get back into ETH, convert the tokens into ETH, repay the loan and redeem your ETH collateral.
You’ll only be taxed on the gains you made from trading.
🚀 ETH maximalists
You believe that there is no other crypto worth holding other than ETH.
We get it, we understand.
But let me ask you this.
Aren’t you interested in the ETH2 Staking Bond?
It is inevitable that many DeFi projects and exchanges will be coming out with tokenized Staking Positions.
Considering the one-way nature of how ETH2 transition will occur. It is likely that the price of the ETH2 Staking Position token will diverge from that of regular ETH (ETH1) .
In some cases, the ETH2 Staking Position token could trade at a significant discount to ETH1.
By using Tax Heaven, you can acquire ETH2 Staking Position tokens without “selling” your ETH1.
Isn’t that heavenly?
🤑Taxation is Theft Advocates / Holders With Sweet Juicy Unrealized Gains
Because the collateral factor stays constant, and the loans have zero cost to carry*, you have “extreme’ flexibility in choosing when to pay back the loan. (Ask no further!)
* at the current interest rate of 0.0%
🛠Protocol/Token Design
As described above, the design of the Tax Heaven protocol is very simple.
A user will borrow the same token against the collateral that they put up (ETH or ERC20).
A 0.5% fee to use the protocol is charged when the collateral is deposited to Tax Heaven (loan origination fee).
The collected fees are distributed to those staking the TAX token.
💰TAX Token Utility
“TAX” is Tax Heaven’s native token.
TAX serves two important purposes.
Staking🥩 and Governance🏛.
🥩Staking
Users that stake their TAX tokens are eligible to receive a token of their choice as rewards.
Users will choose the token they want to receive when they stake TAX tokens.
Staking rewards are determined daily.
In order to be eligible for rewards for a certain day (n), a user has to start staking TAX tokens before the end of the previous day (n-1) and keep staking throughout the day (n).
The rewards that the user will receive for that day (n) is based on the lowest number of TAX tokens the user had staked at any time point during that day.
This means that if the user withdrew all the staked tokens before the day ended, the user will not receive any rewards for that day.
The staking rewards for a given day(n) will be based on fees collected by Tax Heaven during that day(n-1).
Rewards will be fixed immediately after the day ends.
If there is no one eligible to receive the rewards, the fees collected during that day will be deferred and paid out on the next day.
The daily cycle begins at 0:00 UTC and ends at 24:00 UTC.
🏛Governance
Tax Heaven also has a governance mechanism to determine the following:
- Add/remove Whitelist tokens
- Add/edit/remove Whitelist token oracles
- Allocation of Incentive Fund (LP Reward)
(Whitelist tokens are tokens eligible to receive TAX token distribution. See below for details)
🏖TAX Token Distribution
The TAX token is distributed to depositors of “whitelisted tokens”.
The amount of TAX tokens that the depositors receive is based on the value of the tokens being deposited to the protocol.
The value of the tokens being deposited to the protocol will be determined using Chainlink rates at the time the tokens are deposited.
The following tokens will be added to the initial Whitelist:
- ETH
- WBTC
- BAT
- COMP
- KNC
- LINK
- LRC
- REN
- SNX
- UNI
- YFI
- ZRX
The TAX token has no premine and can only be mined by depositing whitelisted assets to the Tax Heaven protocol.
The supply of the TAX token starts at 0 (zero) and will increase only by “Liquidity Mining”.
- 85% of the newly generated TAX tokens will go to users of Tax Heaven, more specifically, to those who deposited one of the Whitelisted tokens
- 10% of the newly generated tokens will go to the Inventive Fund. Half of the tokens allocated to the Incentive Fund (or 5% of the newly generated tokens) will initially be distributed to users providing liquidity on Uniswap🦄 for the TAX/ETH trading pair. Liquidity Providers will need to stake🥩 their LP tokens to receive the reward. The remaining half of the tokens allocated to the Incentive Funds will be set aside as a reserve to be used to sustain the protocol over the long term. The intended use cases of the reserve include the following; additional liquidity mining rewards, grants to partners, and future upgrades to the protocol including audits.
- The remaining 5% of the newly generated tokens will go to the gatekeepers👼 (i.e. backoffice) of Tax Heaven.
The maximum supply is hard-capped at 1,000,000,000 TAX tokens.
As explained above, new TAX tokens are created as whitelisted tokens are deposited to Tax Heaven.
The issuance rate of TAX tokens will decrease over time.
1TAX is issued for every 1 USD value of whitelisted tokens deposited to Tax Heaven until the cumulative deposited value reaches 200M USD.
At which point the issuance rate will decrease by 50% until the cumulative deposited value reaches 400M USD.
The “halving” of the issuance rate continues as the cumulative deposited amount doubles.
When the cumulative deposited amount reaches 51.2 billion USD, the issuance of TAX tokens will stop and no additional TAX tokens will ever be created.
🔐Contract Security
The Contract is NOT AUDITED.
The gatekeepers of Tax Heaven do not have any funds for an audit at the moment but we intend to get the code audited as soon as feasible. We will announce the results as soon as they come out.
In the meantime, we have performed extensive internal review and testing of the code prior to release.
Also, there are no admin keys🔑.
This means that we, the gatekeepers of Tax Heaven, can’t change the code once it is deployed.
It also means that a malicious actor will not be able to implement bugs or secretly change the code to benefit certain users.
The code is open source and is fully verifiable.
🍎And One More thing…
We will also be releasing Tax Heaven on Binance Smart Chain.
With Tax Heaven on Binance Smart Chain (Tax Heaven BSC), we can provide Binancians with the same benefits and functionality of Tax Heaven on Ethereum (Tax Heaven Ethereum).
Tax Heaven BSC is intended for BNB Hodlers and holders of tokens purchased on Binance but not tokenized on Ethereum.
For example DOT is not tokenized on Ethereum.
However, users that bought DOT on Binance.com can withdraw those DOT to Binance Smart Chain and use them on Tax Heaven BSC.
With numerous wrapped tokens on Binance Smart Chain, Tax Heaven BSC will provide utility for a wide user base.
(Users that held DOT on Polkadot Network should consider tax accounting ramifications before moving those tokens over to Binance Smart Chain and using them on Tax Heaven since the swap from DOT to DOTB may be considered a taxable transaction.)
Caution: Tax Heaven on Ethereum and Tax Heaven on Binance Smart Chain are completely different protocols and operate separately and independently of one another. The TAX-BSC token on Binance Smart Chain and the TAX token on Ethereum are also completely different tokens. They reside on different blockchains and have no compatibility.
🚢 How You Can Participate
We are planning to launch Tax Heaven and open its gates in a couple of days.
P.S. Dec 10 Tax Heaven has launched!
Please, if you could, help us with the audit or help create a tweet storm and spread the word of this project.
💬 Join Us!
Our Website:http://heaven.tax/
Join discussions in our Discord: https://discord.gg/pmYvhSZVCb
Telegram: https://t.me/taxheaven_loan
Don’t miss out on any updates by following our twitter account! @Taxheaven_loan
The gatekeepers also have an account: @BabyAngel_Gate
DM us if you have any inquiries or messages.
⚠️Warning: Be careful of scams. All official updates and announcements will be made through the Tax Heaven Twitter account (@Taxheaven_loan).
Disclaimer: In most tax jurisdictions, selling crypto assets for another asset such as cash (fiat currencies) or a different crypto, is considered a taxable event. If the seller had unrealized-gains on the crypto that was sold, it is likely that the seller will be subject to capital gains tax. On the other hand, borrowing crypto is not considered to be a taxable event, just like taking a loan out from a bank is not. At a technical level, the user of Tax Heaven is submitting collateral to the protocol and taking out a crypto loan. The loan has to be paid back for the user to retrieve their collateral. Tax Heaven is not providing any tax or financial advice and the content on this website should not be considered as such. Consult your tax, financial or legal advisor before using Tax Heaven.
