A mere 50% of the employees surveyed were granted equity, as opposed to the below 40% who were granted tokens, as indicated by the survey.
Recent recruits in the cryptocurrency industry are more likely to receive equity than tokens, according to a survey by Variant and Union Square Ventures. The two cryptocurrency firms surveyed companies included in their investment portfolios to identify emergent trends for 2023.
The survey findings, obtained through interviews with employees of 32 Web3 startups, indicate a shift in preference from the previous practice of crypto companies compensating employees with equity rather than tokens to the current preference of the opposite.
Web3 companies have provided token-based compensation to employees since 2013, with none offering equity compensation before 2018, according to the survey.
A mere 40% of the employees surveyed were granted equity, whereas an estimated 50% were issued tokens. In 2023, this trend reversed, with equity being the more probable reward for newly hired employees than tokens three times over.
Although it is premature to label this a trend, the data indicates that startups are testing alternative incentive mechanisms that might not be as token-dependent as those utilized during prior cryptocurrency market cycles.
Nevertheless, positive aspects of the employment and compensation scenario for 2023 were identified in the report by Variant and USV. About fifty percent of respondents indicated that their primary competition for recruits is other crypto startups, whereas twenty-five percent stated that their primary competition is Web2 organizations.
Based on the report, recruiting Web3 professionals is more accessible to accomplish during a bear market than attracting newcomers to the cryptocurrency industry.
The workforce of the startups surveyed was predominantly composed of engineers, who constituted 50% of the staff. According to data from USV and Variant, these engineers are remunerated at a higher rate than their company colleagues and professional peers operating in industries other than crypto.
According to the survey, Web3 engineers earn 27% more than their counterparts in the general market in their early careers, while senior-level Web3 engineers earn a 23% premium.