The data was gleaned from conversations with employees at 32 Web3 startups, and it revealed a notable departure from the past practice of compensating employees with tokens rather than equity.

A recent survey conducted by Variant and Union Square Ventures has shed light on a significant shift in compensation trends within the crypto industry, indicating a growing preference for equity over tokens among new hires.

This survey, aimed at understanding emerging trends in 2023, involved the assessment of businesses in the investment portfolios of these two crypto companies.

The data was gleaned from conversations with employees at 32 Web3 startups, and it revealed a notable departure from the past practice of compensating employees with tokens rather than equity.

Historically, Web3 firms had been offering token-based compensation since 2013, with virtually no instances of equity compensation before 2018.

Over the years, less than 40% of surveyed employees received equity, while approximately 50% were remunerated with tokens.

However, 2023 marked a turning point, with a significant shift towards new hires being three times more likely to receive equity rather than tokens.

While it may be too early to definitively label this shift as a trend, the data strongly suggests that startups are exploring alternative incentive mechanisms that are less reliant on tokens than in previous crypto market cycles.

This evolution highlights the dynamic nature of the crypto industry, as it continually adapts and matures.

The survey also offered insights into the competitive landscape for talent acquisition within the crypto space.

About 50% of respondents indicated that their primary competition for new hires came from other crypto startups, while 25% identified Web2 organizations as their main competitors.

Interestingly, the data suggested that recruiting within the Web3 space is more feasible during a bear market compared to attracting newcomers to the crypto industry during bullish periods.

Within the startups surveyed, engineers constituted the majority of the workforce, making up 50% of the staff.

These engineers were found to receive higher compensation than their peers within the company and even compared to professionals outside the crypto sector.

The survey noted that senior-level Web3 engineers commanded a 23% premium in their earnings, while early-career engineers earned 27% more than their counterparts in the general job market.

In conclusion, the survey by Variant and Union Square Ventures highlights the changing landscape of compensation within the crypto industry, with equity gaining prominence over tokens among new hires.

This trend, though in its early stages, signifies a shift in the industry’s approach to incentivizing its workforce and reflects its ongoing evolution.