How Recap.io Leverages Kaiko’s Fair Market Value Pricing Solution

THE PROBLEM

Determining a fair market value (FMV) for crypto assets for tax and accounting purposes is fraught with complexities due to issues like market fragmentation, volatility, discrepancies in exchange rates across different platforms, and 24/7 markets.

Recap encountered significant challenges in sourcing an appropriate pricing service for their tax and accounting software. They needed a solution that could not only provide accurate FMV for their clients but also align with prevailing compliance standards.

THE solution

In collaboration with Recap, Kaiko engineered a sophisticated pricing service ensuring a reliable Fair Market Value (FMV) for all crypto assets, dynamically adjusting to volatile market conditions and compliant under existing accounting standards.

Crypto markets are marked by heavy-tailed distributions in prices and volumes, filled with outliers, which poses significant challenges for aggregation, particularly for conventional approaches like Volume Weighted Average Price (VWAP) and Volume Weighted Median (VWM).

To address this, Kaiko’s innovative crypto Fair Market Value Pricing solution leverages a robust weighted median methodology and is designed to provide precise, agile, and equitable valuation of crypto assets in compliance with IFRS and FAAP accounting standards.