At Framework, we believe it is our responsibility to help foster the growth of the wider crypto industry. In an effort to be good stewards, we are constantly looking for ways to provide useful resources not only to our founders, but to the crypto community as a whole. Despite the incredible amount of talent that has poured into web3 over the last year, the hiring process for this nascent space remains fragmented and opaque, both for companies and potential employees. As such, using data collected as part of our bi-annual compensation survey, we’ve put together a community guide for compensation in crypto. We believe that this data represents one of the most comprehensive reports on crypto compensation among venture-backed crypto startups and will be hugely valuable for a number of constituencies.

While founders under The Framework Tent will be able to access the full report with higher fidelity data sets using their Founders Pass NFTs, we are making a few key takeaways available to the general public. We believe this data will be especially valuable for:

1. Founders that are hiring early employees and scaling their teams
2. Job seekers applying for roles or negotiating offers
3. Students considering careers in crypto
   

Survey Methodology & Terminology

• Our team surveyed 18 Framework portfolio companies varying in size from 2 to 80 employees. As such, this data represents compensation from early and mid-stage companies that are all venture-backed.
  
• While we do not break out data by individual sector, Framework’s portfolio consists largely of DeFi, infrastructure, and web3 gaming companies.
  
• For the purpose of this report, “executives” refers to C-Suite titles and Heads of Primary Functions (Engineering, BD, Operations, etc). “Engineers” represents engineering and technical research roles and “Business Operations” is a broad term covering all non-executive, non-engineering roles.
  
• All data was collected in May and June of 2022.
  
• Data was collected from both centralized companies, referred to as “respondent companies”, and from decentralized protocols or DAOs, referred to as “respondent projects”.

Major Findings

Fiat is still king in the US, but stablecoins already have a huge presence internationally

Nearly all respondents with teams headquartered in the United States (>80%) offer USD as the primary payment option, often due to the convenience of using best-in-class payroll and employee benefits providers that are less likely to support stablecoins.  However, these companies typically still offer USDC as an option for contractors, and may sometimes (though rarely) have full-time employees that are paid in USDC.

For international teams, the story is very different. ~50% of companies surveyed offer USDC or other stablecoins as the primary form of compensation for all employees, with nearly all offering an option for USDC payments, both for full-time employees and contractors. Around half of international companies denominate salaries in USD while the other half denominate in other local currencies.

Equity ownership and token allocations have some patterns but are highly-contextual to the company, stage, and entity structure

Tokens afford holders opportunities to utilize and participate in networks and/or DAOs. Equity represents ownership in a centralized company or entity. Both tokens and equity can be utilized to incentivise and compensate contributors to and/or employees of the applicable network or company. However, the distribution of tokens vs. equity on an employee-by-employee (or contributor-by-contributor) basis can vary greatly. Though our survey showed that token and equity compensation is highly-dependent on the individual company, there were still some relevant takeaways:

• US-based teams were much less likely to have launched a token or even have plans to launch a token in the future. Of the internationally-based projects, more than 25% have launched a token and most are considering a launch in the future.  Earlier-stage companies are much less likely to have launched a token.
• For decentralized networks or DAOs, token ownership (vs equity) is the standard way of incentivizing employees.
• When comparing employee compensation arrangements that offer a % of equity in a company with arrangements that instead offer a % of an early stage project’s max token supply, we found that the ratio of equity ownership by percentage was approximately twice as large compared to the typical percentage of token ownership.
• For example, an early software engineer working at a DAO might have a compensation package that includes ~0.5% of the max supply of the protocol’s tokens. If the same software engineer were working at an equity-based company, she might instead receive 1% of equity ownership in the company.
• Over time, equity ownership gets diluted considerably whereas token ownership is set based on the max token supply. Both equity ownership in companies and token ownership in DAOs are stage-specific (i.e. earlier = more ownership) but this is especially dramatic in DAOs, likely due to the lack of dilution.  For example, a senior employee at a Series B/C stage company earning 2% equity ownership is conceivable, whereas the same employee earning 1% of a late-stage DAO’s max token supply would be unlikely.
• It's worth noting that the above mentioned dilution data only applies to token-based projects with a fixed token supply. Dilution of token ownership is still possible amongst projects that have inflationary token supplies.
• Our survey results indicate that vesting schedules for both equity and tokens in web3 mostly mirror the industry standard in web2, i.e. a 1 year cliff on 4 years of total vesting.  However, it's worth noting that token vesting schedules vary more based on the project, with some offering 2 year vesting periods with either 1 year cliff or no cliff at all. Additionally, in both 2-year and 4 year token vesting periods, even vested tokens are sometimes locked for a future period, though they may be used on the protocol itself for staking, delegation, voting, and more.

Remote work is the new normal

The majority of surveyed companies consider themselves “fully distributed” and have remote work as the primary operating model of their businesses.  According to our survey results, >33% of employees of even US-based companies are international, making this mode of operation seem necessary given the global workforce in crypto.  Earlier-stage companies are more likely to be remote whereas companies that have raised a Series A or B or slightly more likely to have one or more formal offices.

Founders’ compensations are consistent and dictated largely by company stage

Founder salaries vary heavily depending on multiple factors, including the stage of the company. For early-stage companies, founders tend to pay themselves the minimum amount to maintain a comfortable but basic quality of life. For most early-stage founders, this was between $100k and $175k annually, with $130-160k representing the top of the bell curve. This figure was higher for US-based founders and slightly lower for international founders, depending especially on location and cost of living.  Founders of later-stage companies were compensated in higher bands, with many taking home between $175k and $225k.

Collectively, founders of companies own a lot of equity, typically ~80% in the early days of a company and diluted to 30-50% in later rounds, depending on amount fundraised and terms.  Solo founders obviously own a lot more than founding teams, where equity is split among all founders.  Founding teams, though, often need to hire fewer equity-dilutive executives. DAO or protocol founders own fewer tokens as a percentage of max token supply.  The most ownership among any individual founder in our survey was 10%, which is a solo founder at an early stage company.  Collectively, founders typically own 8-12% of max token supply with individual founders owning between 2.5-7.5% with 4-6% being most common.

Non-founder, executive salaries

Non-founder executives at early-stage companies are typically paid on the same level as founders.  Salaries often ranged from $120k to 160k. For these early executive, non-founder hires, equity packages are much richer, with between 1-4% of company ownership, depending on the role, company, and stage.  Engineering and BD/Partnerships executives were often the highest-paid executive roles on these teams.

For later-stage companies, non-founder executive salaries were often much higher than founder salaries, with many executives being paid $225k+.  As with all other roles, the floor pay was higher for US-based executives, with no US-based executive/non-founder making less than $100k.  Executive pay is less dependent on location, especially for CTO/Head of Engineering roles, with international hires having near parity to US-based hires.  The highest-paid executive, non-founder roles are CTO/Head of Engineering and Head of Sales/Chief Revenue Officer roles.  Many executive sales roles have high variable-based compensation in the form of performance-based bonuses. Executives hired by later-stage companies often receive between 1.0% - 2.0% of company equity, whereas executives at DAOs / protocols usually received 0.5% - 1.0% of max token supply.

Crypto Engineer Salaries

This is one of the most asked-about questions both within our portfolio and in the crypto community as a whole.  Despite a massive influx of new engineers learning solidity, rust, or other languages, there is still a dearth of technical talent in crypto.

The truth is that engineers in crypto fall across a relatively wide spectrum of compensation, both from base salary and ownership perspectives. Across all engineers (including non-crypto specific engineers working at crypto firms), the majority (>55%) fall within the $100-175k range.  Engineers below $100k are largely internationally-based and working in countries with lower costs of living.

For crypto-specific engineers (solidity, rust, blockchain architects, etc.), salaries were typically higher despite the fact that this cohort was largely international (>65%). While most crypto engineers still fell in the $100-175k salary range, >15% sat above that range with top salaries reaching near $300k/year in base pay.  These engineers were also more likely to work for DAOs/decentralized networks and therefore hold tokens, usually between 0.10% - 0.40% for non-executive hires.

Non-executive business operations (marketing, sales/BD, product, operations, etc.) salaries

Compared to engineering, founder, or executive roles, the compensations for non-executive business operations roles are more dependent on employee location. Those working in lower cost-of-living areas internationally typically made significantly lower salaries than those working in the US (or UK / Europe).

The highest-paid roles in this classification were BD/partnerships ($60-120k for mid-level; ~$150k for senior).  Marketing/PR/Comms salaries fell in a similar range ($80-100k for mid-level; ~$140k for senior). Product and Finance employees were also paid in this general range, but were typically only hired at later-stage companies.  Lower-paid roles were in Operations, Design, HR/Recruiting, and Community Management, typically topping out at ~$120-130k for non-executive hires.  

Conclusion

Keep in mind that all this data is based on a relatively-small sample size and is intentionally presented in a high-level way such that the data is sufficiently anonymized.  Even so, we hope that this information helps the community.  We’re always glad to connect and answer more specific questions, especially from founders building amazing things in this industry!

We plan to conduct this survey again later in the year and will present a similar community-focused version with takeaways from the data once it’s complete.  

Important Information:

This blog post is for informational purposes only.  Nothing herein should be construed or relied upon as legal, regulatory, tax, or financial advice.  The opinions expressed are subject to change without notice.