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Wage Protocol

Self-Executing Payroll Tokens

Executive Summary

Blockchain-native payroll delivering sub-second finality and automated compliance. Salary tokens with Logic Layer enforcing tax withholding, benefits deductions, and jurisdiction-specific labor rules. Event Bus triggers payment cascades. Targets $15B payroll market + $5B gig economy gap.

Token Data Schema

What this token holds — every field is specific to Wage Protocol:

{
  "immutable": {
    "wage_contract_id": "UUID",
    "employee_address": "0x...",
    "employer_address": "0x...",
    "payment_currency": "enum"
  },
  "mutable": {
    "hours_worked": "float",
    "gross_pay": "uint256",
    "deductions": "uint256",
    "tax_withheld": "uint256"
  },
  "compliance": {
    "tax_filing_status": "enum",
    "wage_law_compliant": "bool",
    "audit_verified": "bool"
  }
}

User Journey

Step 1: HR Admin

Creates wage contract linking employee, employer, and payment terms

Token: wage_contract_id created, currency set

Step 2: Timesheet System

Employee logs hours worked via integrated time-tracking app

Token: hours_worked updated, last_edit_timestamp recorded

Step 3: Payroll Engine

Calculates gross pay, applies tax withholding and deductions

Token: gross_pay, tax_withheld, deductions updated

Step 4: Tax Authority

Verifies payroll compliance and updates tax filing status

Token: tax_filing_status = FILED, wage_law_compliant = true

Step 5: Settlement Layer

Releases net wages to employee wallet every pay cycle

Token: stablecoin transfer executed, payment_timestamp recorded

Token Lifecycle

State machine transitions:

Minted→Split→Distributed→Reconciled

Why Not Just a Database?

ApproachPortabilityMutable StateCross-OrgCompliance
Traditional Payroll Bank account locked Amendments create new runs Single employer Manual tax reconciliation
Stablecoin Direct Transfer Wallet portable No amendment capability Peer-to-peer only No tax interface
Payroll SaaS (ADP) System-locked Centralized history Multi-entity support Centralized filing
DUAL Wage Token Wallet-native On-chain mutable state Employer-agnostic Tax authority integrated

Market Opportunity

TAM
$100B+
SAM
$10B
SOM
$300M

Mutable state tracks earnings, deductions, tax withholding; Compliance Layer enforces jurisdiction-specific labor/tax rules; Event Bus triggers split→distribute→reconcile cascades; sub-second settlement.

Business Model & Unit Economics

  • Per-Employee License: $5-$10/employee/month for wage contract management
  • Payroll Processing: $0.50 per pay cycle processed (weekly, bi-weekly, monthly)
  • Tax Integration: $0.25 per automated tax filing (Federal, State, Local)
  • Compliance Reporting: $500/month for real-time labor law compliance monitoring
Unit Economics

Per-employee: $5-10/month + $0.50 per pay cycle. Avg. 100-person company: $600-1200/month + $200/month = $800-1400 revenue. COGS: $100/month. Gross margin: 85%.

5-Year Projections

YearARRCustomersNotes
Y1 $200K 5,000 employees SME payroll pilot (100 companies)
Y2 $1.2M 30K employees Freelancer on-ramp active
Y3 $3.5M 80K employees Tax authority integration live
Y4 $7M 150K employees International payroll support
Y5 $12M 300K employees Portable employment record standard

Competitive Positioning

CompetitorWeaknessDUAL Advantage
ADP Workforce Now Centralized; locked to traditional banks; tax integration limited Token-native payroll; stablecoin settlement; real-time tax filing
Guidepoint Payroll Limited to large employers; no freelancer support; expensive Micro-payment support + gig economy native
OpenPayroll (Coinbase Proposal) Stablecoin-only; no tax integration; no mutable state On-chain mutable wage state + tax authority interface

Go-to-Market

Phase 1: SME Payroll Pilot (Months 1-6)

Target SMEs (50-500 employees) in US. Launch wage protocol with 5 pilot companies (500 employees). Partner with HR software. Target: $200K ARR.

Phase 2: Freelancer On-Ramp (Months 6-18)

Enable gig economy payroll. 1099 contractor support. Multi-employer timesheet aggregation. Target: 30K employees, $1.2M ARR.

Phase 3: International + Tax Authority (Year 2+)

International payroll support. Live tax authority integration. Portable employment records. $12M+ ARR target.

90-Day MVP

  • Wage contract creation: Employee-employer-amount binding
  • Timesheet integration: API connector for time-tracking software (Toggl, Harvest)
  • Payroll calculation engine: Gross pay + tax withholding computation
  • Tax authority integration: Automated 941, state return filing
  • Stablecoin settlement: USDC/DAI payout to employee wallet
  • Compliance reporting: Monthly wage report per jurisdiction

Risk Factors

Tax Authority Integration

Different countries have incompatible payroll tax systems. Automation may fail in complex jurisdictions.

Mitigation: Phase rollout by jurisdiction; hire country-specific payroll experts; maintain manual override.

Labor Law Compliance

Wage and hour laws vary by country. On-chain wage records may not meet legal requirements.

Mitigation: Legal review per jurisdiction; add off-chain audit trail; partner with HR compliance providers.

Stablecoin Risk

If stablecoin (USDC, DAI) loses peg, employee wages are devalued.

Mitigation: Support multiple stablecoins; offer FIAT withdrawal guarantees; insurance partnerships.

Employer Adoption

Payroll departments may resist adoption due to legacy system integrations.

Mitigation: Pre-built ADP, Guidepoint connectors; managed migration service; ROI calculator.

VC Pack Documents

Get Started with AI

Prerequisites: Complete the DUAL Quick Start Guide to set up your environment and API keys before building this concept.

# Build Wage Protocol on DUAL

You are building a portable, on-chain wage contract and settlement system. Start here:

1. Design the wage token schema: immutable wage_contract_id, employee_address, employer_address, payment_currency; mutable hours_worked, gross_pay, deductions, tax_withheld; compliance tax_filing_status, wage_law_compliant, audit_verified.

2. Create the wage contract workflow:
   - HR admin creates contract linking employee, employer, pay terms
   - Embed local wage and tax law rules
   - Employee + employer sign contract on-chain

3. Build the timesheet integration:
   - Connect to time-tracking APIs (Toggl, Harvest, ADP)
   - Employee logs hours worked
   - Auto-fetch hours into hours_worked field

4. Implement payroll calculation:
   - Compute gross_pay from hours × hourly_rate
   - Apply local tax withholding (federal, state, local)
   - Track deductions (health insurance, 401k, garnishments)
   - Record all components immutably

5. Create tax authority integration:
   - Auto-file 941 quarterly, state returns, local reports
   - Update tax_filing_status on DUAL
   - Maintain immutable tax audit trail

6. Build settlement layer:
   - Every pay cycle, auto-execute stablecoin transfer
   - Employee receives gross_pay - deductions - tax_withheld
   - Employer sends deposit at end of period

Start by designing the contract schema and connecting to timesheet providers.
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