Redefining Compensation in Web3 - TOKEN2049 Singapore 2022

hi so I really appreciate everyone who managed to survive until now and yeah I know that everyone's really really really really ready for the party so uh we'll be talking about interesting topics today so hopefully I will not lose your attention uh but let's see how it goes at least you know the drinks are coming like literally right after it so my name is Don I'm a co-founder of work dial work that was the only full stack employment compensation and Tax Solution built for web free so today I want to share with you a few ideas and uh hopefully uh a few hot takes on financial incentives in web free uh we will be talking Financial incentives and compensation we will consider what can go wrong and what happens if things go right so spoiler alert contributor compensation if Done Right can really accelerate the mass adoption of web free and likely am I much more positive dialogue with with regulators so my legal team has asked me to say it that all of the things that I will be saying today are my personal views but you know they are based on countless conversations that we are having together with our team with contributors with founders with operators with lawyers accountants and and together with the team we are having those conversations on a daily basis so I will share a few things that that we are learning so you know incentives Make the World Go Round um or spin out of control and as I mentioned before by incentives uh at least in today's context we'll be talking Financial incentives and compensation so the incentives encrypt already depend on the stakeholder there are Financial incentives related to contributors getting paid and obviously I mean everyone everyone here I'm sure University loves to get paid there are also incentives for the governments actually to to go after that money and that's one of the main reasons why every single government is trying to create that local Nexus for every project in whatever jurisdiction they can government labs to get paid as well so web free both from the technological standpoint but also from the regulatory standpoint and from ideological standpoint really changes how incentives out how incentives are defined and how they are distributed that's that's why we are all here for right for that amazing upside that web free provides the problem is that you know there are definition and redistribution of incentives especially Financial incentives in a space filled with the brightest Minds working on some of them are most cutting-edge Technologies means that sometimes there is someone who already wants to get involved and that's usually government the question is how do we get financial incentives and compensation right not only for the contributors and for the organizations but also for the governments so web free is often described as the next step change in how labor and human capital is organized around the world you know but that's great but we still do have a compensation problem too many contributors right now too many employees working either for web free organizations or especially for those are being paid for projects or work without consideration of an illegal or regulatory ramifications and by that I mean labor laws employment laws tax rules Securities compliance and if we are ever to see them as adoption of web free uh and the next wave of talent coming into the space we need to address these challenges head on and something that I will not cover today but something that's really important to us as an organization and especially to me personally is that idea that sometimes it feels like it is a big privilege to work in this space right now you sometimes have to give up a lot of security that inherently you get if you are working in web 2 because of the great benefits because of great pay because of the access to healthcare and social insurance some of those things are already in in big organization in web free but some of them or very little are actually in Dallas so we will we will try to address those challenges head on today so let's see let's start with identifying the actual problem so so let's get real the fundamental premise of organizations in web free especially for daos is that they are jurisdictionless like you know you meet someone at the conference and you ask like oh where are you based and everyone's like oh I live on the Internet or I live in the metaverse and that's great but it's not exactly true uh you know in order to fly here you needed to show your password or you needed a Visa and there is a number of those things that you need in a daily life um so those organizations in web free everything we are building here exist on the internet but contributors are hyper jurisdictional they live in specific countries they must maintain proper residency status they are required to pay taxes they must comply with all laws and regulations in whatever country they are they they are staying and so the problem of Dallas and web free is that um they are you know we are here building a Global movement but contributors come from every corner of the world and the varying and often changing regulatory rules mean that from organization perspective it's very difficult to figure out how can you compensate people how can you hire people how can you compensate them in if every Dev or every person on your team comes from different place on the planet so you know the problem becomes especially difficult to solve when we are starting to talk about taxes um this is the text implications of compensation is actually what makes it all tricky so I see everyone's expression here and I know that again like I know that you're waiting for the drinks and taxes is the last thing you want to think about but you know the word tax is is that one one of the very few words that that makes us that make all people already actually Bond over the shirt anxiety and the pain and um and you know no one wants to think about taxes no one wants to deal with taxes and and yet we all have to and the year at the end of the year is coming so probably it's time to rekindle your relationship with your tax accountant um well anyway the point is that taxes are really complex even if you lose money or don't make money at all taxes are complex they are slightly more complex if you actually do make money and they are magnitudes more complex if you make money and that money is in crypto and you know in let's say Fiat stable levels some tokens some Equity that just becomes extremely difficult to navigate as an end contributor but also another organization that compensates people in those ways so what happens if you face these problems and actually don't get it right well there are no no ways of escaping complex Regulatory regimes and I know that there are some people on the run but very few people can stay on the run forever right even being a Dao even if you choose not to have a legal entity or you are an an contributor it doesn't mean that you are above the regulatory regime actually arguably abstaining from choosing a jurisdiction might mean that you are creating an incentive for the government a lot of different governments actually to find the path to construct that local Nexus to prove that there is a link between your on-chain activity and the local jurisdiction and the local jurisdictional oversight over those activities so what's the shortest path for The Regulators to establish oversight it's finding endpoints it's finding contributors we have seen this with Alpha going after tornado cash we have seen this with a number of ongoing litigations for Terra and then the cftc going after okidao last week so even if we are actually trying to get it right let's say that you as an organizational building internal team to really you know you hire accountants you hire lawyers well that means that every organization has to do it on their own the Practical cost of employment and compensation compliance and tax compliance for each organization in web free can it be actually prohibited for smaller projects it would require creating entities in every single country where you want to hire someone it would mean creating actually actual payroll system that is able to handle stables and tokens it would mean engaging in cumbersome kyc processes again in every single jurisdiction and the list of those things that you would have to do goes on and on and on well anyway paying accountants and lawyers probably the hottest jobs in in crypto right now uh that that can be one way but but there must be another way so one thing that I want to touch on before I I tell you what we do at work now is that a lot of people don't realize that you can't do the employment piece or their compensation piece without the other so what I mean by that you cannot divorce the campaign people for the contributions they are making without actually formalizing the work or employment agreement they are having too often we are seeing contributors being contributors being compensated wallet to wallet with no consideration for uh the regulatory regime of where they live so employment laws tax laws and so on so if we want to get web free to the to the point where it's truly adopted at scale and there is a new wave of talent coming into this space and and people who actually are able to make that bridge from web to to web free it means that we need to mature we need to mature when it comes to the the systems and processes that we are putting in place around formal employment formal work and formal compensation and so that's exactly what we are doing at work though so work now is building full stack employment um employment compensation and tax services designed specifically for web free so web free is global contributors come from every corner of the planet and that's why we are building a Global solution so work that enables Dallas and web free organizations to legally employ and compensate contributors anywhere in the world in whatever asset or whatever currency uh is agreed upon so that includes Fiat that includes Stables it also includes tokens so all with full employment compensation and tax compliance in every country our services are also designed to provide a really great contributor experience because actually what we are seeing is that the experiences the problems of contributors are very different sometimes from the problems and and challenges faced by organizations and those in this space so we want to make sure that you know everyone's okay and so how does it work so without boring you with all the details um you know we started with onboarding the the contributor onto workdel that means that we are becoming a formal employer uh for the contributor we are ensuring that everyone's employed legally um in whatever country they are based um so that's the employment part that's done so now we are moving to the to the tax part so when organization sends us fun the the sort of the the end Organization for whom the contributor is working for uh we are using our proprietary token tax engine to calculate the tax obligation of that contributor for the entirety of their of their compensation so we send part off to the government for the purposes of tax withholding and the rest of the funds to the contributor so that's the tax part okay done it's a unbelievably more complex but but it gives you the rough idea of what we do so at work though we are focusing on problems that that really matter um we want to make sure there is more and more people who can come to the space and contribute uh that there is uh more organization that can ease more easily operate that there is less administrative and operational burden that currently Founders or or or people on the teams have to deal with so web free really provides an opportunity to reimagine the you know the future of work and the future of work should be not based on replicating past mistakes it should be taking what was great in you know something that we've built for so long best practices and applied and really elevated to a new level so that's what we are trying to do at work now we really want the ecosystem to flourish and and we think that this the need for the maturity of the ecosystem from operational and a legal perspective is really needed so that's that's what we are working on if this is something that resonates with you if you're someone that loves to talk about taxes if there is someone who loves to talk about legal stuff and and uh and all those operationally heavy problems uh please get in touch if you don't like to talk about taxes and never want to talk about taxes again also get in touch uh if you want to talk to me I will stay around to hang out probably we can get a drink as well but if you prefer to be an internet friend you can hit me up there and and we can chat online as well thank you very much for your time really appreciate that you guys stayed thanks