Working in Web3: Liability, Benefits, Tax Compliance, Operations, and Accounting

# Introduction

The aim of this post is to share my business structure and operations, my pivot into Web3, and my opinions about the tools and services that work best for my business as a freelance Web3 software developer. It is meant to be informative and does not constitute legal or financial advice. Please do your own research and consult with legal or financial professionals when setting up your own business.

I live in the United States. My decisions may not be possible or make sense for individuals in other jurisdictions.

Edited Feb 9, 2022: Added additional acknowledgments.
Edited Jun 4, 2022: Changed title and removed iStock images 
 Edited Jul 13, 2022: Added Relay bank referral link

# Executive Summary (tl;dr)

I pivoted my career into [Web3](https://en.wikipedia.org/wiki/Web3) at the beginning of 2021. To limit my personal liability, I formed a Wyoming [LLC](https://www.investopedia.com/terms/l/llc.asp). When signing business contracts, my LLC is the party.

I contracted [Cloud Peak Law Group](https://wyomingllcattorney.com/), a WY [registered agent](https://www.legalzoom.com/articles/a-complete-guide-to-what-a-registered-agent-does) to:

1. Form the LLC entity
2. Provide an [operating agreement](https://www.investopedia.com/terms/l/llc-operating-agreement.asp) template
3. Receive [service of process](https://en.wikipedia.org/wiki/Service_of_process)
4. Establish a [virtual business address](https://www.investopedia.com/terms/v/virtual-office.asp)
5. Receive, scan, and forward other mail

To reduce my benefit premiums and simplify my tax compliance, I became an Employee Member of the [Opolis](https://opolis.co/) Employment Commons [LCA](https://medium.com/fifty-by-fifty/colorado-the-delaware-of-cooperative-law-babedc9e88eb), hereafter referred to as the “Commons”.

To make this possible, my LLC elected [S-Corp](https://www.investopedia.com/terms/s/subchapters.asp) taxation status with the [IRS](https://www.investopedia.com/terms/i/irs.asp) by submitting [Form 2553](https://www.irs.gov/forms-pubs/about-form-2553).

My business is paid entirely in [cryptocurrency](https://www.investopedia.com/terms/c/cryptocurrency.asp), yet, I pay my personal bills in [fiat](https://www.investopedia.com/terms/f/fiatmoney.asp) without [off-ramping](https://cointelegraph.com/explained/cryptocurrency-on-ramps-and-off-ramps-explained) via a [centralized cryptocurrency exchange](https://www.investopedia.com/tech/what-are-centralized-cryptocurrency-exchanges/).

How do I do this?

1. The Commons invoices my LLC/S-Corp for payroll, payable in [stablecoins](https://www.coindesk.com/learn/what-is-a-stablecoin/) like [DAI](https://en.wikipedia.org/wiki/Dai_(cryptocurrency)), [USDC](https://en.wikipedia.org/wiki/USD_Coin), or [USDT](https://en.wikipedia.org/wiki/Tether_(cryptocurrency)).
2. Twice a month, my LLC/S-Corp sends USDC to the Commons.
3. The Commons pays the benefit premiums I elected, any federal, state, and local taxes I owe, and deposits the (net) remaining funds in [USD](https://www.investopedia.com/terms/u/usd.asp) into my personal bank account.

To avoid [piercing the corporate veil](https://www.law.cornell.edu/wex/piercing_the_corporate_veil), my LLC’s bank account and crypto wallet are separate from my personal bank account and crypto wallet.

My LLC/S-Corp pays some expenses in crypto. But, when paying taxes or vendors that only accept fiat, it:

1. Off-ramps from [Polygon PoS](https://polygon.technology/solutions/polygon-pos) using [Wyre](https://www.sendwyre.com/) or from [Ethereum mainnet](https://en.wikipedia.org/wiki/Ethereum) using [Kraken](https://www.kraken.com/) or [Gemini](https://www.gemini.com/).
2. Withdraws USD to its [Relay](https://app.relayfi.com/register?referralcode=refer-a-friend2052) business bank account.
3. Pays expenses via virtual debit card or [ACH](https://www.investopedia.com/terms/a/ach.asp) transfer.

My business has [general](https://www.investopedia.com/terms/c/commercial-general-liability-c