What is Pulse Chain?
Pulse Chain is a blockchain project initiated by Richard Heart, who was also the founder of the HEX cryptocurrency. The aim of Pulse Chain was to create a new blockchain network that would incorporate several features and improvements compared to existing blockchains, particularly the Ethereum network.
Some of the key features that were envisioned for Pulse Chain included:
Energy Efficiency: Pulse Chain aimed to implement a proof-of-stake (PoS) consensus mechanism, which would consume less energy compared to the proof-of-work (PoW) mechanism used by Ethereum. This approach was expected to reduce the environmental impact associated with blockchain mining.
Lower Transaction Fees: Pulse Chain intended to offer lower transaction fees compared to Ethereum, making it potentially more accessible for users to interact with the network.
Compatibility: Pulse Chain aimed to be backward-compatible with the Ethereum Virtual Machine (EVM) and smart contracts. This compatibility would allow developers to port their existing Ethereum projects easily to the Pulse Chain network, thereby expanding the ecosystem.
Airdrop of Tokens: Pulse Chain proposed an airdrop mechanism through which holders of certain cryptocurrencies, particularly Ethereum, would receive a proportionate amount of Pulse Chain's native token called PULSE. This airdrop was intended to incentivize participation and bootstrap the network's adoption.
Pulse Chain and its tax implications
The first thing that you need to consider if you find that you have assets on Pulse Chain, is to ask yourself do you want these tokens and the tax implications that come with accepting them. If the answer is 'no' then you can just not import this wallet as it was not created or initiated by yourself.
If you do decide that you wish to claim these assets, then you should import this wallet and accept that you may have to pay Income tax on the new tokens you have received. Not every tax jurisdiction has the same rules around receiving free tokens (e.g. Airdrops, Chain Splits), so please check with your accountant before making your decision.
Known Pulse Chain issues
One of the main concerns regarding the launch of this blockchain is related to point #4 mentioned earlier. Pulse Chain claims that if you hold certain assets on the Ethereum blockchain, you will receive an identical copy on the Pulse Chain blockchain. However, due to the blockchain's design, there might not be on-chain transactions showing the acquisition of these assets. Consequently, when you eventually dispose of these assets, it can result in "missing purchases".
To resolve this issue, you will need to manually add transactions to show the acquisition of these assets. While there is no precise guidance available, the most suitable categories to select would likely be Airdrop or Chain Split. For more information on how to add manual transactions, please refer to the following article: https://help.cryptotaxcalculator.io/en/articles/5777675-advanced-manual-custom-csv-import.