About

The number of ‘crypto native’ and traditional businesses that transact with digital assets has seen unprecedented growth in the past five years. This adoption of a new asset class has necessitated an increased focus on accounting for tax reporting and operations management purposes; however IRS and FASB rules can be generously described as ‘evolving’, and the systems required to convert on-chain activity to the general ledger are developing in lockstep to the blockchains they monitor. The Statement of Digital Assets’ (SoDA) mission is to translate on-chain holdings into clear and articulate reporting for all stakeholders rationalizing the balance sheet. We started with the balance sheet because of a treasury’s importance to crypto-native businesses, however further exploration in areas such as digital assets’ impact on cash flow statements and month over month token roll forwards may follow. The following is a public benefit collaboration intended to open source a best practice that has been deployed among numerous projects with the goal of contributing to “crypto’s GAAP accounting moment.” 

This paper is structured as a narrative, but most sections can be read independently depending on the reader’s focus. In sequential order we will cover: the macro case for SoDA and its relevance; SoDA’s core benefits; SoDA’s origins and the state of crypto accounting; real world SoDA use cases; and finally additional considerations including how SoDA is constructed.