Global Tax Consultancy Proposal + TAXpunk NFT

Title: Global Tax Consultancy Proposal + TAXpunk NFT

Read the proposal: Link to google document

Authors: @lion917, @taxpanda

Squad: @lion917, @taxpanda, @eagle, @hirokennelly.eth, @Crypto Bushi

Date: 29th December 2021

Summary

  • The Legal Guild would like to prepare a global tax guide (GTG) that provides a general introduction to virtual currency-related income tax laws for major jurisdictions. The tax guide will be a living document - updated as necessary for developments in the relevant law and to include additional jurisdictions.
  • Access to the GTG will be granted via minting a Bankless DAO TaxPunk NFT (a new member of the Bankless DAOpunks family). Anybody will be able to mint the NFT and access the tax guide for a fee.
  • The guide will be used to kick off Legal Guild’s tax consultancy for individuals, corporates and other DAOs. A comprehensive guide will encourage those with tax questions to the guild.

BACKGROUND

There has been a noticeable increase in the amount of tax-related questions asked in the Legal Guild chats. We believe this is based, in part, on the increased focus that governments generally are directing at drafting tax laws governing virtual currencies and digital assets, particularly in the U.S. However, the lack of formal guidance and difference in treatment in the various countries can create confusion even for lawyers and tax professionals. The goal of creating the tax guide is to both provide an important and useful resource for Bankless DAO members looking for general information on which crypto tax laws might impact them and how, while also generating revenue for the benefit of the DAO and future Legal Guild projects.

Bankless HQ has presented a tax guide, which covers only the U.S. The global nature of BanklessDAO (and the blockchain ecosystem) requires it to cover multiple jurisdictions. In this way, the GTG will be capable of capturing a wider audience. The recent success of the BanklessDAO legal newsletter (14’371 views of issue #1) demonstrates that there is a strong request for legal content. Therefore, it could be argued that the GTG and the TAXpunk will bring new people to get knowledge of BanklessDAO and of its activities.

MISSION & VALUES ALIGNMENT

The mission of our DAO is to help the world go Bankless by creating user-friendly onramps for people to discover decentralized financial technologies. Legal guild is instrumental in helping individuals navigate their transformation as the journey to a bankless future is full of regulatory steps which many individuals are struggling to navigate. The guide is being designed to educate the contributors. “Going Bankless” does not obviously mean to obliterate existing laws. Tax requirements should be carefully assessed and respected.

A guide on how an individual’s income/investments are taxed under their respective jurisdiction is very important. Highly compliant contributors can take the agenda and mission of the DAO forward and receive validation from their community without any regulatory concerns.

Needless to say, the Bankless TAXpunk NFT will be the cultural imprint of our project!

SCOPE OF WORK

Objectives & Goals

  • Help bankless contributors deal with their taxation requirements easily so they are incentivized to contribute more.
  • Create a Taxation Consultancy for the legal guild to achieve the DAO’s purpose of helping mass adoption of decentralized financial technologies. A tax consultancy will contribute to the Bankless treasury and the same will also attract more contributors.
  • Create more work for the increasing contributors for the guild as this can be a major project that can be renewed every season with new jurisdictions to be added.

Features

  • One-stop-shop for DAO members with respect to their income tax questions.
  • A living project which will be renewed each season with additional jurisdictions and updates to ensure continued relevance and benefit.
  • A source of revenue and unique value-add for the DAO and the legal guild in general.

SPECIFICATION

Access to the BanklessDAO taxation guide will be made available only to the holder of the Bankless TAXpunk In order to access the guide, NFT owners will be required to connect their crypto wallets via the designated platform used for minting. The guide will be updated as necessary based on legal and regulatory developments, with a new proposal submitted every season to account for the amount and depth of revisions to be made. Proceeds from minting the NFT will be allocated between the general BanklessDAO Treasury, contributors, NFT artist and DAOpunks treasury. In addition, the guide will provide exposure to the Legal Guild for those who have tax and/or other crypto-related legal questions. A specific channel has already been set up. People can join and ask questions.

As soon as Season 3 begins, project managers will spend two weeks creating a working template of specific crypto-related tax issues to be addressed for each of the following proposed jurisdictions:

  • Italy
  • Germany
  • India
  • Brazil
  • USA (Federal)
  • UAE
  • Portugal
  • Canada
  • Australia
  • Singapore
  • UK
  • Nigeria

The coordinators can modify the final jurisdictions to be added to the guide. However, the number of jurisdictions will remain the same. Contributors with technical experience with tax laws and regulations will be identified and assigned jurisdictions. Project managers will also identify BanklessDAO members to develop the NFT access, including incorporating Bankless branding.

The tax guide is intended to be comprehensive, technical, and accurate, providing information that anyone transacting with or in cryptocurrency would benefit from. As a result, contributors will have 4-6 weeks to finalize drafts for each of their jurisdictions. Two editors will have 2 weeks to review and make drafting changes as necessary. Overall design finalization will also be completed during this two-week timeframe.

After publication, the GTG will be updated every season with new jurisdictions being added each season based on future proposals. The GTG will be a living document that will constantly be updated.

FINANCIAL IMPLICATIONS

Revenue Model

The aim of the project is to bring revenue for Bankless DAO and its legal guild.

  • The first source of revenue for the project will be the proceeds generated due to the sale of NFTs. The proceeds shall be divided as follows:
    • General Bankless DAO Treasury - 20%
    • DAOpunks Treasury - 10%
    • Contributors - 40%
    • NFT Artist - 30%
  • The second source shall be the consultancy stemming out of the publication of the tax guide. Any proceeds out of the projects consultancy project will be divided as follows
    • Contributors - 80%
    • General Bankless DAO Treasury - 10%
    • Bankless DAO Legal Guild -10%

Funding Request

187,500 BANK

The funding is being requested from the Bankless DAO Grants Committee. The rough breakdown is as follows:

  • Jurisdictional Research - 75K BANK (12 Jurisdictions)
  • Template / Formatting, Introduction & Conclusion - 12.5K BANK
  • Editors - 12.5K BANK
  • NFT Creation
    • Art/graphic design - 12.5K BANK
    • Technical development (i.e., developing NFT minting process, website for tax guide access) - 37.5K BANK
  • 2 Project Leads - 25K BANK
  • Graphics / Miscellaneous Expenses - 12.5K BANK

BRAND USAGE

The taxation guide will use the Bankless Logo and will be tokenized under the brand of BankessDAO.

SUCCESS METRICS OR KPIS

  • The number of new clients that approach the Legal Guild for tax advice and tax planning.
  • The total number of Tokenized guides bought. Since a similar idea has not been implemented before, the numbers will be reviewed on a monthly basis.
  • Member feedback based on the survey to add more jurisdictions.

NEXT STEPS

After the proposal is accepted, the immediate three steps are:

  1. Setting up a communication channel with early contributors and preparing a template for the whole guide for uniform contributions from all 12 jurisdictions.
  2. Commissioning 12 jurisdictions to different contributors preferably to legal consultants situated in such jurisdictions.
  3. Setting a timeline for the team so that the first draft is prepared within 8-10 weeks of the commencement of the next season.

SQUAD BACKGROUND

@Lion917: I am a legal consultant specialising in Asian jurisdictions from a leading Law University in Asia. I specialise in Blockchain, Data Protection and information technology. I have been a contributor in the legal guild for a few months and an avid writer for their newsletter. I also held a permanent administrative position for the guild during season 2. I have been an early adopter of decentralised finance and I also work with DAOs to streamline their legal-tech products. Though I have always been enthusiastic about law, technology is my true passion and I am glad that bankless provides me with the chance to contribute. I am a level 2 contributor at Bankless. Given my experience in the field of DeFi, law and research, it can be a unique opportunity to apply these skills to an impactful workplace where I can use symmetric global parameters to provide targeted expertise. Regulatory innovation is required for the sustainable growth of DeFi. While coordinating the guide, I aim to engage more contributors so the guild flourishes.

@TaxPanda: I am a US tax attorney licensed in California and Washington, DC specializing in international tax and cross-border Mergers & Acquisitions tax compliance, consulting, and policy. I have been practising tax law generally since 2013, but I have been a legal guild contributor for only a few months. In early 2019, I began working on tax issues for clients in the blockchain/crypto/Web 3 space and have since developed a passion for studying the various relevant legal issues, specifically those that relate to tax, corporate/DAO governance and #DAOdiligence, and treasury management. In my experience, there are few people who find taxation as interesting as I do. However, there is clearly a sea change in the tax landscape as relates to blockchain technologies and the shift toward a decentralized future that I could not be more excited to be a part of. I hope to turn that enthusiasm into a helpful resource for as many as possible.

@Crypto Bushi: Crypto artist with real-world experience in negotiations, marketing, & mergers and acquisitions.

@Eagle: Law Professor with a focus on digital law, blockchain and cryptocurrencies; Coordinator of the Legal Guild, LexDAO and Lex_punK Army DAO.

@Hirokennelly.eth: Hiro Kennelly is a writer and editor at BanklessDAO, Core Team @DAOpunks, Editor-in-Chief @ Good Morning News, lover of people and builder of communities. Come for the tech —> stay for the revolution.

POLL (Discourse Post Usage Only)

  • I support the Global Tax Consultancy + TAXpunk NFT Project (Approve)

  • I DO NOT support the Global Tax Consultancy + TAXpunk NFT Project (Reject)

  • I support the Global Tax Consultancy Proposal + TAXpunk NFT Project, but it needs revision consistent with comments below (Revise and Re-Upload)

0 voters

11 Likes

This proposal is a great example of an innovative project that will generate revenue for the DAO and contributors from Day 1. Who couldn’t love a global tax guide and consultancy that uses an NFT as the access key? Great job team! :mechanical_arm: :building_construction:

9 Likes

I endorse this proposal.

6 Likes

I can contribute to the Indian Jurisdiction

3 Likes

I love this proposal. It hits all the right bases: credibly identifies the need, good scope granularity, KPIs work for alignment, very reasonable ask.

Thanks for posting it!

Question: if this is a living document and once you mint your access NFT you have “lifetime” access, doesn’t it create a situation in which you are requiring new users to continue updating? I wonder about the long-term sustainability of this. Have you thought about this?

4 Likes

Hi Links, thanks for the question. We did think about your point. The jurisdictions only get updated if after the annual review there is a substantial change in the law. Additionally, the update will be prepared based on a new bounty created for review. Hence, the contributors need not worry about long-term commitment.

Also, the NFT holders will access the most updated file available on the portal. Hence, the access is not limited to a particular number of visits as long as the user holds the NFT at the time of visiting the portal.

2 Likes

Thanks for your answer. I guess what I’m asking is: what happens when the revenue from NFTs is lower than the cost to maintain the tax guide? Will you figure out a way to get new revenue from existing users or will you let the guide become out-of-date?

I acknowledge this might take years or never happen at all. This question isn’t a dealbreaker for me, I support the proposal even if you don’t have an answer for this, I’m just trying to understand the long game.

4 Likes

This is a great question! We don’t anticipate ever letting the guide become out-of-date. In fact, with all of the uncertainty around crypto-tax treatment in nearly every jurisdiction, it’s likely that there will be a lot of work to be done for the foreseeable future. As a result, the information will likely need to be updated quite frequently which will also increase the value proposition moving forward. One of the important aspects of this project (at least in my mind) is that it will be constantly changing and evolving. Maintaining value for existing NFT holders, new users, and the Bankless DAO generally will always be front of mind. Consistent feedback from existing users will be a vital KPI in that regard.

4 Likes

So excited for this! I think this will be a great info-product provided by the DAO, and introducing legal guild consulting further down the road as another revenue generator would be super awesome. We’re lucky to have so many lawyers in our DAO—I truly do not think other DAOs can compete with you guys!

Only one question from me: I noticed that none of the revenue goes to the legal guild treasury, and instead there’s a cut to DAOpunks. No major issues with that, I was just curious about why there is BANK going to DAOpunks rather than the guild’s wallet.

2 Likes

This is a good question. Fortunately , the one area that never rests is changes to the tax codes. So the demand should be evergreen.

Really innovative idea.

3 Likes

Great move! I would like to contribute more to the Bankless community. LFG!!! :black_flag: :mechanical_arm:

1 Like

Thank you for the question @samanthaj

The DAOpunks will get a share because the TaXpunk NFT is an expression of their culture and they will sustain the project: a mix between boring (but useful) information tax information and DAO culture. The idea is that the DAOpunks will help us during the promotion phase. Unfortunately, also DAOpunks should care about taxation :sweat_smile:

In an earlier draft there was a split also for the legal guild, but then we thought that there were already a lot of guild members involved who will eventually get a portion of the revenue. In addition, the splits were not huge and we wanted to demonstrate to the DAOpunks our gratitude.

9 Likes

wen France jurisdiction, asking for a fren

4 Likes

Hi @livethelifetv, we will keep adding more jurisdictions each season. Hence, don’t worry, we will cover it as well soon.

1 Like

I like the proposal but I have a few questions. How much will be the minting of the NFT. Also to access the guide for a fee, is this a one off or a subscription? Then how is the revenue split between all parties.

Thanks for the question! We haven’t decided on a final minting price yet - but I think it will involve a balancing act between making the guide accessible and also recognizing the on-going value. That leads to your second question: minting the NFT is intended to grant access to the guide, including future updates and developments. So in that respect it’s not really a subscription per se, but also not something that needs to be repurchased later. Happy to clarify if you have any other questions!

So what I take from this is that people that don’t have the NFT will still have access to the guide by paying a fee? Or this is not the case?

Only people with the Taxpunk will have access!

would the Taxpunk NFT be an unlimited number and unlimited mint timeline? or it would max out at some time or amount?

Looking forward to this project, and happy to research into the crypto laws in Nigeria - considering all crypto activities onramp/offramp are banned.

Happy to support this proposal.