Every project in crypto has the potential to go 1000x, propelling token holders to massive profits - for some, it may even represent a life-changing leap into a new bracket of wealth.

Crypto-laborers, non-technical contributors specifically, know this and act accordingly - and so do the people who hire them. If a potential contributor sees that a given project has the potential to 100-1000x, they may be more willing to work for project tokens and nothing else. The original project founder may even offer a juicy share of the project up front for their help in building out the community.

Some of these contributors will even earn themselves team-shares of these tokens pre-launch, which has clearly paid out handsomely for some, but has more likely ended in disappointment for those who’ve been willing to take a risk with their time and work entirely for tokens of unknown value.

In other scenarios, the fluid nature of the situation over time has caused these contributors to be ‘shaken out’ of tokens that actually ended up being very valuable. A contributor and founder agree to a certain number of tokens as compensation for some amount of work that is clearly stated, but when the product and token launch months later, the contributor is shortchanged and the founder is not really held accountable, citing changes in the tokenomics, scope or deliverance of work - maybe some of which are even valid - but the point is that the contributor’s expectations have not been met.

Some context from other writings related to Token Compensation

Last week, Dragonfly capital Head of Talent Zackary Skelly published a thorough article Token Compensation for Web3 Startups, which presented a loose model for founders to use in creating a hiring plan for token compensation. The article took a lot of angles into account - one of which was not included was a discussion around mixed compensation (presumably stables and native tokens).

The idea of working for a base salary rate as well as project equity is obviously not new or unique to crypto, but remains an interesting topic for discussion and something to consider at least in the non-crypto startup world - see this article regarding how employees in traditional startups are advised to structure and negotiate their hiring agreements with their employer-partners.

I also found this thread from Kaz Tamai summarizing community insights from Peter Pan and 1kx to be relevant to this topic.

The 5th tweet on the thread reads, “You'll want to attract members that will be intrinsically motivated to participate in the community. Why? Intrinsically motivated people form stronger communities & collective identities. They'll continue to participate even when financial gain is uncertain.”

I agree that intrinsically motivated people are needed to participate in and build these communities, I just think that ‘intrinsically motivated’ doesn't necessarily have to mean ‘will work for free because they are not in this for financial gain.’ Skilled and passionate contributors will sacrifice a lot to work on projects they are passionate about, but they still need to be paid something for their time in most cases. We can't expect that everyone we need to build the future of web3 is already sitting on a pile of ETH and can afford to work for nothing except tokens of ambiguous value.

The problem contributors face

Workers don't always want to work for only tokens and are often reluctantly willing to do so and only do it because we’ve over-normalized working only for tokens.

People are convinced by the industry to work for tokens based on the potential of a given project to blow up - and when it doesn’t, they’re left bag-holding their time.

Countless contributors go along with working for equity because they want to believe that doing otherwise would be unbecoming - ‘everyone works for tokens in crypto,’ and ‘I don’t want them thinking I’m only in it for the money,’ they may be thinking.

Solutions

The first and most obvious solution to this issue in crypto projects is for community managers to normalize asking for clearly defined hiring and payment terms before starting to work. If people want to play stupid games (not clearly agreeing upon work to be performed for a clear amount of compensation and then hoping for the best) they can expect to earn stupid prizes (months of work for valueless tokens) and this is their responsibility, no one else’s.

However, with all this being said, project founders hiring community managers must take responsibility for not taking advantage of people’s willingness to work beyond their means, which means taking the time to have conversations with contributors about compensation, their expectations, what can be guaranteed and what cannot. When building teams, the best project leads have a sense for who they are bringing on, what motivates them, and how those motivational factors should be reflected in a hiring agreement built for longevity between the contributor and the project.

Hiring in crypto, especially in DAOs, often revolves around contributing and driving value before ever being officially hired. This type of ethos is strong in theory but is abused all over crypto to get people to work for a lump of tokens that don’t even exist yet and have no guaranteed value.