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Token Compensation Design Guidelines – CoinYuppie: Bitcoin, Ethereum, Metaverse, NFT, DAO, DeFi, Dogecoin, Crypto News

Tokens and the overall cryptocurrency market are highly volatile, making it difficult to design a token-based compensation package. So far, the topic has been riddled with vague tax and legal regulations, scattered data, and unclear industry norms. Furthermore, many founder teams use cumbersome spreadsheets and “semi-finished” software to handle the process, so that this thorny problem is not solved.

The first article in this series covers how to build an effective talent acquisition program and token compensation package, especially for companies that are planning token offerings. This article will explain how to provide employees (contributors) with token-based salary scales, quote calculations and related operations once the tokens are live.

Benefits of Token Salary

Tokens are often used as part of the employee’s total compensation, and as a whole, job offers may include salary, tokens for the product/protocol, equity in the company, and/or some type of bonus.

We’ve outlined why it makes sense for a company to offer only some of these elements. This may largely depend on the relationship between equity and tokens, and the associated risk profile.

Tokens as salary have many unique benefits:

Unify incentives for company, community, product users, and employees
Users of the network or protocol can also become contributors and participate in the construction
Allow employees to leverage other DeFi protocols and native tokens to generate additional benefits and rewards (eg: lending, depositing, providing liquidity, staking, etc.)

How to set

It’s worth noting that not every company should offer tokens as compensation. If your company chooses to do this, there are different types of files or software to do so depending on your company’s specific circumstances. Commonly used structures include restricted token rewards, token options, or restricted token types.

The laws and regulations surrounding token compensation are constantly changing, so it is recommended to consult with legal counsel in advance, especially a…

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