Equity Overtakes Tokens as Preferred Compensation Method in Crypto Startups: Variant-USV Survey
Summary:
Recent survey findings by Variant and Union Square Ventures suggest a shift in the crypto sector's compensation structure. Instead of tokens, new hires now prefer equity. This data, taken from 32 Web3 startups, also highlighted the competitive sphere for new talents, with other crypto startups posing as significant competition. The survey further underscored that Web3 engineers, making up half of the startup workforce, outearn their peers both within and outside the crypto industry.
According to a recent survey by Variant and Union Square Ventures, it has been observed that the preference for equity over tokens is increasing among new hires in the cryptocurrency field. 32 Web3 start-ups provided the information for this analysis, highlighting a shift in the way compensation is structured. Previously, crypto firms generally compensated employees with tokens, but they now seem more prone to offer equity instead.
The survey showed that, since 2013, Web3 businesses have chiefly used tokens for compensating their employees, with equity not being offered until 2018 at the earliest. Less than 40% of the employees surveyed reported receiving equity, while around 50% reported receiving tokens. However, in 2023, this trend turned around with new employees three times more likely to be offered equity than tokens.
While this might be a premature conclusion, the gathered data could point to a shift in the way start-ups structure their incentives - possibly moving away from a heavy reliance on tokens that has been a hallmark of previous crypto market cycles. Yet, positive trends characterized the hiring and compensation landscape for 2023, as noted in the Variant and USV report.
About half of the survey participants indicated that other crypto start-ups were their primary competition for new hires, while a quarter cited competition from Web2 entities. The report findings suggest that it might be easier to recruit within the Web3 sector during a bear market as compared to bringing new faces into the cryptocurrency industry.
Engineers formed the bulk of the employee base among the surveyed startups, making up 50% of their workforce. The Variant and USV report further mentioned that these engineers tend to earn more than their colleagues within and outside the crypto industry. According to it, "Senior Web3 engineers command a 23% premium, while early-career engineers make 27% more than their counterparts in the broader market.
Published At
12/22/2023 11:58:26 AM
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