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Staking tax · Policy · Yield decomposition

2026-11-05

How TrueStake reconciles staking income to the wei

A walk through TrueStake's reconciliation methodology: how one on-chain settlement event becomes one cited, verified line in an audit-defensible record — and what happens when the numbers don't match.

Ask two data sources what your validator earned last month and you will get two answers. Usually they differ by a rounding error. Sometimes they differ by more. Neither will tell you which one is right — and if the number is going on a tax return, "close enough" is not a category an examiner recognizes.

TrueStake's answer to this problem is mechanical rather than rhetorical: derive what every validator should have received, observe what actually settled on-chain, and refuse to publish a number until the two agree to within 100 wei — a hundred-quintillionths of an ETH. This article walks through how that works, one settlement event at a time.

Derived and observed are different kinds of numbers

A derived number comes from interpreting protocol data: consensus-layer duty income, execution-layer fees, relay-reported payments. Derivation is where every staking dashboard lives — and where every disagreement between dashboards is born, because derivation involves interpretation.

An observed number is different in kind: ETH actually credited to your withdrawal address or fee recipient, in a specific block, at a specific timestamp. It isn't an interpretation. It's a settlement.

The reconciliation gate exists because a defensible record has to be built on the second kind — with the first kind checked against it, not the other way around.

One sweep, end to end

Take the most common settlement event there is: a sweep withdrawal. Roughly every nine to twelve days, the protocol sweeps your validator's balance above 32 ETH to your withdrawal address. Here's what TrueStake does with one:

  1. Capture. The sweep appears in a specific block with an amount in gwei. TrueStake records it as a receipt — the unit of record everything else hangs off — and preserves the raw upstream API response verbatim alongside it. Amounts are normalized to wei at the boundary and kept exact from then on; nothing downstream ever re-rounds them.
  2. Derive the expectation. Independently, TrueStake computes what your validator should have accumulated since the last sweep from consensus-layer duty data — attestations, sync-committee service, proposal income.
  3. Reconcile. The gate compares the derived expectation against the observed settlement. Agreement within 100 wei: the receipt stands. Anything beyond: a reconciliation finding is written — visibly, on the record.
  4. Value. For reporting, the receipt is priced at a stored daily close for its recognition date, with the price source and observation timestamp carried onto the row — the price leg of the citation chain.
  5. Cite. The finished line carries a chain reference (the settlement, linked to a public explorer), the authority citation, and the price provenance. Anyone — you, your CPA, an examiner — can follow it back.

The homepage diagram compresses this into one picture. The point of the prose version is that there is no step where a number is taken on faith.

What a finding means

A finding is not an apology; it's the product working. If the derived total and the observed settlement disagree beyond tolerance, something specific happened — a data source served a stale value, a relay reported a payment the chain doesn't show, an interpretation missed an edge case. The finding localizes it, and the record shows the discrepancy instead of absorbing it.

The alternative — the industry default — is a dashboard that quietly displays the derived number. Nobody re-checks it, so nobody disagrees with it. That is not the same thing as being right.

Why the raw payloads are kept

Every external response TrueStake consumes is preserved verbatim. If a data source is later found to have served bad data for some window, the affected receipts can be identified and recomputed from evidence — not re-guessed. A record you might have to defend years later needs its inputs, not just its outputs.

Chain Trust, named

When you rely on a TrueStake number, what you're trusting is the blockchain — what we call the Chain Trust model. The record is designed so that TrueStake itself drops out of the trust equation: every line names its settlement event, its price observation, and its method. Your return rests on staking income recognized when you gained dominion and control over it, consistent with Rev. Rul. 2023-14 — and the record behind it can be recomputed from the chain by anyone who cares to check.

That's what "reconciled to the wei" means. Not a slogan — a gate.

Citations

  • [1]IRS Rev. Rul. 2023-14
  • [2]IRS Notice 2014-21
  • [3]TrueStake ADR-0007 — canonical wei units / 100-wei reconciliation tolerance· Internal architecture decision record; methodology published at truestake.io/standards

Not tax advice. This article is educational and does not constitute legal or tax advice, or a professional opinion on any specific taxpayer's situation. Tax law changes and individual circumstances vary — consult a qualified tax professional before taking any position on your return.

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