Finding work in web3 can be difficult, as there are many different standards and compliance requirements. However, once you have found work, it is important to stay compliant with the standards and requirements.

There are many opportunities to find work in web3, for example by looking on bounty boards, grant programs, career sites, and Twitter.

While it may be easy to find work, it can be tricky to stay compliant. If you organize yourself and your work well, you may be able to save money and avoid problems when paying taxes. Additionally, this organization can protect you legally if something goes wrong.

To help more people work in web3 in a way that complies with the law, this article looks at two options: forming an LLC or choosing an S-corp.

Although this article is not financial or legal advice, it may help you get started with your research and ultimately choose what is best for you. Please keep in mind that this article is focused on a US-based audience, but there will be future articles discussing other jurisdictions.

You should always consult with an accountant and lawyer to get the best advice.

Taxes, accounting, and compliance

You should create a work wallet that is separate from your personal wallet if you are just starting to work in web3. Your work wallet should only be used to accept payments for bounties, grants, and invoices, as well as to make business expenses. This will make your accounting much easier and is also necessary to maintain the “corporate veil”– the legal difference between you, the person, and you, the business.

How do I set up a work wallet?

Both Metamask and Rainbow allow you to create a new account/wallet within the application that can be used for exclusively for receiving payments, making legitimate business expenses, and paying yourself. This way, you can keep your existing wallet for trading, buying NFTs, supporting artists, and participating in DAOs.

If you have more than one wallet, you can use the Ethereum Name Service (ENS) to make it easier to get paid. This is because an address like ‘yourname.eth’ is much more readable for humans than an address like ‘0x1934e252f840aa98dfce2b6205b3e45c41aef830’.

You have two options here:

1. Use an ENS subdomain with your existing ENS domain:
   bob.eth (personal wallet)
   work.bob.eth (work wallet)
2. Use a completely separate ENS domain:
   bob.eth (personal wallet)
   bobmusic.eth (work wallet)

Having an ENS domain that is separate from your personal wallet is a good idea, whether you choose to incorporate as an LLC or an S-Corp.

The two paths for working in web3

You can either choose to stick with the traditional path of centralized exchanges and their KYC/AML procedures, or you can explore a new frontier of decentralized exchanges (DEXs). There are two main types of exchanges for you to choose from as a freelancer or bounty hunter working in web3 – traditional, centralized exchanges with their KYC/AML procedures, or decentralized exchanges (DEXs). DEXs offer a new way to trade cryptocurrency that is Peer-to-Peer (P2P), without the need for a central authority.

Incorporating as a single-member LLC provides you with liability protection, tax advantages, and is quick and easy to set up.

Choosing to file as an S-corp has more tax advantages and flexibility, but also comes with some extra complexity.

Path 1: Form a single-member LLC

Because of this, it is the most common business type chosen by small business owners. This is the easiest and cheapest option to set up and get started. An LLC protects the owner from personal responsibility for the company’s debts or liabilities. It is the most common business type chosen by small business owners.

Forming an LLC is a simple process that can be done using an online platform such as Stripe Atlas or Legal Zoom. The former is more expensive but comes with additional benefits; the latter is quick and easy but will only establish your LLC.

You will need to create a business bank account once your LLC has been incorporated. Found and Mercury are easy to use platforms that would be ideal for freelancers and solopreneurs.

You will need to register with a crypto exchange in order to sell your tokens and transfer the money to your business bank account. Some popular exchanges include Binance (US only) and Coinbase. It is recommended that you use one exchange for personal trading and a different exchange for transferring money from your business wallet to your business bank account.

If your business is set up as an LLC, the money you make will be distributed to your personal bank account from your business bank account.

Path 2: Choose an S-corp

An LLC that is taxed as an S-corp is not considered a formal business structure, but rather a tax classification. The owner of an LLC is not an employee, and can only be paid through distributions. However, with an S-corp, the owner can be an employee and receive both a salary and distributions.

If an S-corp pays its owner through distributions instead of salary, that distribution is only subject to income tax. By limiting salary to a reasonable amount, the rest of the income that would be paid in distributions is only subject to income tax, resulting in a tax advantage. The extra cost of maintaining an S-corp is generally worth it if distributions are significant.

The IRS could question whether salary is reasonable and purposely understated to save on taxes, so it is important to be aware of what similar positions in your area are paid according to Robert Half, Glassdor, or Payscale.

The benefits of setting up an S-corp are more mature and you can receive benefits like healthcare, dental, vision, and retirement.

We’ve partnered with Collective to help make it easy to form or convert to an S-corp. Signing up with Collective will help you on the following:

• S-corp formation
• Tax assistance
• Bookkeeping
• Accounting
• Compliance
• Payroll

In order to get benefits, we’ve partnered with Opolis, an employment cooperative that offers the same benefits to freelancers as it does to employees. Signing up for Opolis will help you with all of the following benefits:

• Health, dental, and vision insurance
• FSA and HSA
• Retirement
• Short and long-term disability
• Tokenized rewards

An exchange can be used to convert tokens to cash, which can then be deposited into a business bank account. If Collective is given access to manage the account, it can handle payouts and deposit them into a personal bank account.

A quick note on accounting

Having the right technology tools available will make managing your bookkeeping easier, whether you do it yourself or hire a Certified Professional Accountant (CPA). Tracking and extracting data from blockchain transactions into your accounting software can be tedious, but Cryptio can help by converting transactions from wallets, exchanges, and custodians into journal entries that can be labeled and synced with accounting software like Xero and Quickbooks.

The Request Finance platform enables you to create invoices in the currency of your choice (e.g. USD) and get paid in any cryptocurrency you prefer (e.g. ETH).

What type of designers are we talking about?

Based on the given text, it can be inferred that digital designers are more common than physical designers. This is because most projects are digitally based, and there is not enough interconnection yet between physical projects and web3.

So like, what am I designing?

Although it may not seem like a large transition, designers who specialize in web2 design will find that their skills are still useful. Design is still an important aspect regardless of the medium andweb2 design skills are still in demand.

There’s a lack of designers in the space

They’re integral to the user experience of a dapp and can help with everything from branding to laying out complex interactions. Designers are very popular and in demand in web3 because they are essential for the user experience of a dapp and can help with many aspects of the design, from branding to creating complex interactions. We make a huge impact in the following ways:

medium.com Some people buy art because it is visually appealing to them, such as the ones seen in the link provided.

NFTs that look legitimate and have good art sell better than those that don’t. For example, Pixelmon raised $70 million, but was called “rugged” because of the art quality upon mint reveal. Hype still matters in the space, and how “cool” something looks can help build up hype and make it more likely to sell out. That’s not to say that a project is guaranteed to fail if the art is bad, but it certainly doesn’t help.

How something looks can influence how legitimate it is perceived to be, and how trustworthy it is. A consistent, good appearance signals that there has been commitment and investment from the team, whether it be through hiring a designer or outsourcing the work. This is extremely important in an environment where people are skeptical of being scammed.

It’s difficult to find products that are truly delightful experiences. When you have a bunch of backend developers also doing design/frontend implementation, they tend to emphasize functionality over intuition. With blockchain technology, it’s easy to fork/copy products (like Uniswap’s two-field swap mechanism). Although this might result in a lot of products that look the same, the defensibility of your product is low (unless it has something unique in the tech stack, such as speed, security, etc.). Sometimes it’s the small features or the ‘you didn’t even know you needed this until now’ that make people stick with a product – and that’s what we help discover/design.

To illustrate, people who use NFT sniping tools care mostly about speed. I have heard from these people that they remain loyal to one competitor because that competitor allows them to set custom gas presets.