A recent survey conducted by venture capital firms Variant and Union Square Ventures reveals a shift in the compensation preferences of new hires in the crypto sector. Despite the market downturn in 2023, the survey, which included companies from their investment portfolios, aimed to uncover emerging trends during this challenging period.
The survey, which gathered data from 32 Web3 startups, found that the majority of participants reported that the bear market did not affect their hiring plans. Engineers dominated the workforce and received better pay compared to their peers, and companies are becoming more geographically diverse in their staffing.
While Variant and USV’s survey painted a rather optimistic picture, many crypto firms made significant workforce reductions in 2023. Major blockchain companies such as Binance, Coinbase, Dapper Labs, OpenSea, and Chainalysis all made headlines for staff cuts 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, highlighted that the data suggests crypto companies did not spend 2023 lamenting the bear market. Instead, they used market constraints to decentralize operations further, explore new compensation models, and expand their engineering teams.
In contrast to the past trend of compensating employees with crypto assets, the survey indicates a reversal, with new hires in 2023 being three times more likely to receive equity rather than crypto assets. This marks a significant change from 2013 to 2018 when crypto asset compensation was common, and equity was not typically offered.
The report cautiously refrains from declaring the new compensation method a trend but acknowledges the significance of the change. It suggests that startups are experimenting with new incentive mechanisms that might be less dependent on crypto assets compared to previous market cycles.