Read our open-sourced and curated list of questions you should ask before you join a project that is paying in crypto.
We've talked to thousands of freelancers working in web3, many who have questions about getting paid in crypto. What are the risks and tradeoffs? Native token or popular cryptocurrency like Bitcoin or Ethereum? And what questions should I ask before I take the project on?
If you’re working in web3, it might seem obvious that you’re going to be paid in some form of cryptocurrency. And to be sure, there are a number of advantages that come with getting paid in crypto: payments are immediate, they are verifiable on the blockchain, in some places there may be tax advantages (please talk to your tax advisor). And of course, many people like the idea of being paid in crypto because of the upside potential. More on this later.
What is clear is that web3 is a new and evolving space, and it’s increasingly popular to compensate freelancers and fractional talent in crypto. That’s why we’ve open-sourced our curated list of questions you should be sure you ask before you join a project that is paying in crypto.
There are a number of well-known platforms like Coinbase Commerce, Bitpay, Coingate, and more that are easily able to facilitate crypto payments. One advantage in being paid with one of these platforms is that you know that the client has cleared some KYC (Know Your Customer) process. While it’s no guarantee you’ll get paid, it at least establishes that the client has some amount of credibility, and their entity is real.
In other cases, your client may want to pay you through a self-hosted wallet. Self-hosted wallets are individual wallets that are meant for peer-to-peer transactions. This method cuts out the middleman like Coinbase. There’s nothing wrong with this method, and in some cases it may even be preferred. If you want an extra layer of trust, you can ask to see examples of other payments and transfers that have been made from the wallet, all of which will be recorded on the blockchain. It’s no guarantee that YOU will get paid, but at minimum it establishes a baseline.
Although gas fees at the time of writing are relatively low, that is not always the case. Network fees could end up eating considerably into your earnings, so it is important that you understand who is covering the gas fees in these transactions. Will the client be covering it in full? Will it come out of your paycheck? Is there a limit to what they will pay?
Our philosophy has always been that freelancers should earn 100% of the rate that was agreed, and any gas fees should be covered by the client making the payment. But it is always worth confirming that understanding with a prospective client up front, so there are no hiccups down the line.
Let’s say you’re working on a project for 10 hours per week, and have agreed to be paid 1 ETH per month. One day, the value of Ethereum suddenly decreases by 40%. Not want you want to see, but we have witnessed this before. Your rent or mortgage payment didn’t decline by 40% (since it wasn't tethered to a more volatile asset), so it’s not ideal that your earnings plummeted.
That’s why we recommend that freelancers always negotiate their rate in USD to protect themselves from the possible fluctuations in the crypto markets. For example, if ETH is at $1200 at the time of the agreement, you should lock your rate at $1200 per month. You can still be paid in ETH, but the risk of price volatility is eliminated.
This allows for the payment to take place in cryptocurrency, while protecting freelancers from unexpected volatility. It’s smart from the client perspective, too. It’s unlikely that your freelancer is going to be motivated if they’re making substantially less than they thought would be earning.
Major cryptocurrencies are a common and relatively safe way to be paid in crypto. They trade freely, and you can easily understand the value in a fiat currency like USD. The calculus for a freelancer becomes much more complex when you are going to be compensated solely (or primarily) in a project’s native token.
Being paid through a project's token is very much akin to equity compensation at a startup (itself a very complex topic). And there are a whole host of factors you’ll want to consider.Is the project pre-launch or post-launch? Are the tokens trading freely? How much do you believe in the founding team and the vision? Is there a token lockup period? In essence, you need to think of yourself much more like an owner or investor, evaluating the merits of the project. We’ll be doing a deeper dive on this soon, but in the meantime here is a great piece from Paradigm that explores the topic of token compensation further.
We believe this question—should I take payment in the project’s native token—is one of the most important questions that a freelancer can ask when exploring compensation. And it all comes down to risk tolerance. Maybe you’re comfortable putting in 100 hours of work for a low (but non-zero) chance that the token substantially increases in value. Everyone has a different tolerance for risk and ambiguity. But it’s really important to at least understand that you are taking that risk, effectively trading away the 100% certainty of a dollar today for a Y% chance of 1X dollars at some point in the future. Your job is to try to gauge what the Y and the X in that equation are, just as any investor would do.
This information is largely geared towards people working on short-term freelance projects. The situation (at least in the US) is much different if you are being treated as a full-time employee. There are many federal and state tax withholding, insurance, and other regulatory requirements, some of which may not be well-understood or evolved in the context of crypto compensation. As this landscape evolves, there are a number of projects doing interesting work on crypto payroll and payroll for DAOs, from Gnosis Safe to Opolis to Utopia.
Discover why hiring a crypto copywriter is crucial for Web3 businesses and how Thirdwork helps you find the perfect talent to create high-quality content.
Selecting a qualified blockchain freelancer in 2023 requires a thorough understanding of the skills and experience necessary for successful blockchain development.
We share a few thoughts on why it is important to hire a designer experienced with designing wallet interfaces
The thirdwork platform has leading freelancers with deep expertise in web3. Tell us about your project and start interviewing candidates in as little as 48 hours.
We can help place a range of roles with experience in crypto and web3, from devs, marketers and writers to brand strategists and product designers. If you need a freelancer with expertise in web3 and crypto, we can help!
Our goal is to match the highest-caliber talent with outstanding clients that are building things that matter. We have an in-depth vetting process to ensure the quality of our freelance talent. Candidates first submit a detailed application with their background, experience and work samples. Only a small percentage of applicants move forward. We conduct multiple rounds of technical and personality-based interviews to ensure top notch communication skills, teamwork, technical acumen, and professionalism.
Our freelancers set their own rates, and we can accomodate a range of budgets. We charge a flat and transparent fee for all payments processed through the platform.
Our pool of freelance talent is globally distributed, although the majority of our freelancers are based in the United States. All freelancers are fully proficient in English. Our goal is to foster the most effective collaboration with your team, so we will calibrate our matches to your time zone and preferences.
We’re able to get started right away. Our deep network and optimized matching process allows us to find you top candidates rapidly, often in less than 48 hours.
We are currently accepting founding member applicants off of a waitlist. If you are interested in being considered for membership, you can add your name to the waitlist and we will notify you when spots open up. We're reviewing the list on a first-come basis.