According to a new survey conducted by venture capital firms Variant and Union Square Ventures, individuals newly hired in the crypto sector are more likely to receive equity rather than crypto assets. The two crypto firms conducted the survey with companies in their investment portfolios to better understand the trends that may have emerged in 2023, a year significantly affected by market downturns.
What Happened in Blockchain Companies in 2023?
The survey, which involved participants from 32 Web3 startups, revealed several insights related to employment; the majority of participants stated that the bear market did not affect their hiring plans. Engineers dominate the workforce and receive better pay compared to their peers, and companies’ staff are becoming increasingly geographically diverse.
While Variant and USV’s survey paints a rather optimistic picture, many crypto firms decided to lay off a significant portion of their workforce in 2023. Major blockchain companies such as Binance, Coinbase, Dapper Labs, OpenSea, and Chainalysis all made headlines for staff reductions throughout the year. However, according to Variant and USV’s report, the hiring and compensation front in 2023 was not all doom and gloom. The survey’s co-authors Tom Dils, Calder Zwerling, and Matt Cynamon stated the following:
“The data we collected shows that crypto companies did not spend 2023 lamenting the bear market. Instead, they used market constraints to further decentralize their operations, experiment with new compensation models, and expand their engineering teams.”
Noteworthy Details from the Survey
According to the survey conducted by Variant and USV, there is now a reversal in the trend of compensating employees of crypto companies with crypto assets instead of equity, contrary to the past. The report stated the following:
“In 2023, the likelihood of new hires receiving equity was three times higher than the likelihood of receiving crypto assets.”
The report also noted that from 2013 to 2018, employees commonly received crypto asset compensation and there was a lack of equity compensation. Variant and USV refrained from defining the new compensation method as a trend but indicated that the change was significant. The report stated the following:
“Although it is still too early to define this as a trend, the data suggests that startups are trying new incentive mechanisms that may be less dependent on crypto assets compared to previous crypto market cycles.”
