Tezos — baking, delegation, and the Etherlink rollup
Tezos pioneered on-chain governance and self-amendment. We track XTZ baking, delegation rewards, and the new Etherlink EVM rollup for finance teams using Tezos.
Tezos uses Liquid Proof of Stake — token holders can bake (validate) directly or delegate to a baker. Rewards are paid per cycle (~3 days). FA1.2 and FA2 are the fungible token standards (similar to ERC-20 / ERC-1155). Tickets are a unique Tezos primitive — typed cryptographic objects useful for L2 messaging and access control. Etherlink is the new EVM-compatible rollup settling to Tezos, expanding the chain's reach to Solidity contracts.
What's tracked on Tezos
XTZ transfers and baking rewards
Per-cycle reward accrual for bakers and delegators.
FA1.2 / FA2 tokens
Fungible token transfers decoded with metadata.
Tickets
Typed cryptographic objects tracked as in-kind transfers.
Etherlink rollup activity
EVM-compatible activity on Etherlink reconciled to L1 Tezos.
Common Tezos transaction patterns we classify
- Send / receive XTZ
- FA1.2 fungible token transfer (in / out)
- FA2 multi-asset token transfer
- Baking reward receipt (per-cycle, ~3 days)
- Delegation to a baker (no lock period)
- Undelegation (re-delegate or remove delegation)
- Plenty Finance swap or liquidity position
- Quipuswap swap or LP position
- Ctez minting / redemption
- Smart rollup message submission
- Etherlink EVM transaction (ERC-20, swap)
- Ticket transfer (typed cryptographic object)
- Origination (smart contract deployment)
What changes when you book Tezos
Tezos baking rewards are distributed per cycle without a claim transaction
Bakers and delegators receive XTZ rewards at the end of each cycle (approximately every three days) with no user action required. Rewards are credited directly to the baker's or delegator's balance. Wag3s books each per-cycle distribution as staking income on the cycle-close date at the XTZ spot price, maintaining a complete income history that matches the on-chain reward schedule.
Delegation on Tezos does not lock XTZ — tokens stay spendable
Unlike most PoS chains, Tezos delegation does not require locking XTZ. Your tokens remain fully liquid and transferable while delegated. This means there is no unbonding period to track and no locked-balance entry on your balance sheet. Wag3s notes the delegation status for context but does not restrict the spendable balance, and any XTZ sent from a delegated address is tracked at the correct lot basis.
Etherlink EVM activity sits on a separate accounting surface from L1 Tezos
Etherlink is an EVM-compatible rollup that settles to Tezos Layer 1. Assets bridged to Etherlink have different on-chain identifiers than their Tezos L1 counterparts. Wag3s reconciles the Etherlink bridge events — deposit and withdrawal — and maintains cost-basis continuity across the two layers, treating cross-layer moves as intra-entity transfers rather than disposals.
Tezos accounting questions
Are baking rewards taxable on accrual or receipt?
Receipt-basis (per-cycle distribution) by default. Some jurisdictions allow accrual treatment for delegators; we expose the choice.
What is the difference between a baker and a delegator for reward accounting?
A baker runs a Tezos node and receives baking rights proportional to their self-bond plus delegated stake — they receive the full block reward and pay delegators their share (minus a baker fee). A delegator assigns baking rights to a baker but keeps their XTZ liquid; they receive the baker's payout net of the fee. Wag3s handles both: bakers see gross reward income plus an outbound delegator payment expense; delegators see net reward income per cycle directly.
How are Tezos smart rollup fees (Etherlink) treated in accounting?
Transactions executed on the Etherlink EVM rollup pay gas in XTZ on the rollup layer, which is distinct from L1 Tezos fees. Wag3s tracks Etherlink gas costs separately from L1 fees and allows you to route them to different GL accounts if your cost-allocation policy distinguishes L1 settlement costs from rollup execution costs. Cross-layer bridge events are treated as intra-entity transfers rather than disposals.
Other chain coverage and tax guides relevant to this network.
Book Tezos the right way
Free during Alpha. Connect a wallet, see every transaction reconciled to journal entries.