This article focuses on the employment and compensation characteristics of the Web3 industry. It sorts out three mainstream employment models—domestic labor contract employment, cross-border independent collaboration, and engagement via domestic flexible employment platforms—analyzes the risk points of three salary payment methods (fiat currency, stablecoins, and project tokens), and provides suggestions from two aspects: signing agreements and ensuring fund compliance, helping practitioners avoid risks and safeguard their rights and interests.
This article focuses on the employment and compensation characteristics of the Web3 industry.
Introduction
Nowadays, it is no longer news that more and more people are joining the Web3 industry. Professionals from various fields such as technology, product development, and operations have flocked to this emerging sector, infusing it with vitality.
Compared with traditional Internet, Web3 is often labeled with attractive tags like “high salary”, “global remote work”, and “flexibility and freedom”. Especially during market upswings, many practitioners have indeed reaped far greater returns than those in traditional industries, which has attracted a growing number of Web2 professionals to switch to the Web3 track.
However, once people truly step into this field, many will find that the “rules of the game” in Web3 are not quite as they imagined. As an industry still in rapid formation, unified standards have not been established in many aspects—whether it is organizational structure, collaboration methods, or salary systems, all demonstrate rich diversity.
In this space, you may no longer be simply called an “employee”, but more often a “contributor”; your income may no longer be a fixed monthly salary paid into your account, but a flexible mix of fiat currency, stablecoins, project tokens, and even future incentives with a vesting period.
This flexibility brings more possibilities, but also comes with many confusions:
- What are the main employment models in Web3?
- What are the differences between Web3 salary payment and traditional salary payment?
- What precautions should early-stage workers take to prevent project parties from breaching contracts?
In response to these practical and specific questions, this article will sort out the common collaboration models and salary payment methods in Web3, clearly point out the potential risks involved, and provide feasible suggestions to help you embrace opportunities while moving forward more steadily and securely.
Main Employment Models in Web3
In the Web3 world, it is important to know that the relationship with a project party is not limited to that of an “employee”. Currently, common collaboration models are mainly divided into three categories, each corresponding to different rights and risks:
(I) Domestic Labor Contract Employment
A small number of Web3 projects have registered companies in mainland China and will sign formal labor contracts with you to establish a standard labor relationship. This model is fully applicable to China’s Labor Law; the company will pay social security contributions and withhold personal income tax for you, which is no different from the traditional “9-to-5 job” you are familiar with.
It should be noted, however, that not many Web3 projects currently adopt this fully compliant domestic employment method.
(II) Cross-border Independent Collaboration
This is the most mainstream method in the industry at present. The project entity is usually registered overseas (such as Singapore, Hong Kong, etc.) and signs a “service agreement”, “consultancy contract”, or “independent contractor agreement” with you as an individual.
In this case:
- You are legally regarded as a business collaborator, not in a labor relationship.
- You are not fully protected by the Labor Contract Law (e.g., economic compensation, paid annual leave, etc.).
- Salary payment methods are highly flexible, and payment in project tokens is very common under this model.
(III) Through Domestic Flexible Employment Platforms
Some projects establish cooperative relationships with you through third-party flexible employment platforms. The platform may sign a contract with you and pay you remuneration (usually in RMB).
Although this method can meet the demand of “receiving fiat currency”, the underlying legal relationship may be relatively complex:
- You may form a labor relationship with the platform, or it may be just a civil cooperation.
- It is prone to situations where the social security contributor, personal income tax filer, and actual employer are not the same entity.
- The compliance of the platform itself will directly affect the protection of your rights and interests.
Understanding which model you fall under is the first step to clarifying your rights and assessing income risks.
Common Salary Payment Methods and Risk Points in Web3
Under the above different employment models, salary payment methods in the Web3 industry show obvious diversification characteristics. It should be noted that there is no one-to-one correspondence between employment models and salary payment methods; a single employment model may involve multiple salary payment methods.
(I) Fiat Currency Payment
Generally speaking, paying salaries via bank transfer in RMB is a method with relatively low legal risks. With clear contractual arrangements and tax handling, the overall compliance path is relatively clear.
Among the employment methods mentioned above, domestic labor relationship-based employment or salary disbursement through flexible employment platforms will involve fiat currency payment. However, it should be noted that in practice, it is also common for part of the salary to be paid in fiat currency, and the other part in the form of stablecoins or project tokens. For example, an employee’s actual monthly income is 30,000 yuan, of which 10,000 yuan is paid in fiat currency, and the remaining 20,000 yuan is paid in tokens equivalent to this amount.
In such cases, how to issue the offer, how to stipulate terms in the Labor Contract, and based on what amount social security and personal income tax should be declared have become difficult legal issues that must be addressed. When facing these problems, both individuals and enterprises are advised to consult professional legal personnel and fully consider them based on specific project or employment situations.
(II) Stablecoin Payment
Salary payment in stablecoins is one of the most common methods in the Web3 industry. However, since stablecoins are also a type of cryptocurrency, their payment feature—being linked to blockchain addresses—has led to some common legal questions: When a sum of stablecoins is paid, how to confirm that it is the practitioner who has received the payment, or how to prove that it is the employer making the salary payment? Is there any possibility of proxy receipt or disbursement?
For many Web3 practitioners, the challenges of stablecoin payment lie not only in legal compliance, but also in the additional risks encountered when they wish to convert stablecoins into fiat currency (i.e., withdrawal).
When providing legal consulting services to practitioners, the author of this article has handled multiple cases where, after receiving stablecoins as remuneration, practitioners suffered economic losses or even faced criminal risks due to lack of experience in the withdrawal process, resulting in receiving illegal funds or being involved in money laundering chains.
(III) Project Token Payment
In some Web3 projects, paying salaries in tokens is a relatively common practice. Since projects themselves hold large amounts of non-mainstream tokens, distributing tokens to employees or collaborators is often low-cost and easy to operate.
However, it should be noted that such salaries are essentially more like high-risk investments—if the token price fluctuates sharply, your actual income will also fluctuate accordingly.
At the same time, to achieve long-term incentives and token management, such projects usually do not issue all tokens at once, but set a “vesting period” and unlock them in batches based on working hours or performance achievements. This model is somewhat similar to equity incentives in traditional companies, allowing you to have certain expectations for future returns, but it also brings new problems: rules may be unilaterally changed by the project party, whether vesting conditions are reasonable, and whether the vesting process is transparent—these all require close attention.
In addition, whether salaries are paid in stablecoins or project tokens, there may be certain legal and operational risks in terms of legality, taxation, and fund transfer-out.
Mankun’s Suggestions
Salary payment in Web3 is indeed complex and prone to disputes. To avoid pitfalls, there are two key points: clear contractual terms and compliant fund flows.
(I) Sign a Clear and Comprehensive Written Agreement
The salary structure in the Web3 industry is different from that in traditional industries; a standard labor contract alone is often insufficient to cover all potential disputes. To clarify the rights and responsibilities of both parties, it is recommended that you must sign the following documents:
- Clarify the nature of cooperation: Clearly define in the agreement whether the relationship between the two parties is a labor relationship, cooperative relationship, or other forms, to avoid ambiguous characterization later.
- Specify salary structure and payment methods:
- Clearly state the composition of salary (e.g., basic salary, performance pay, token incentives, etc.);
- Agree on the payment cycle, currency type (fiat currency or cryptocurrency), and payment channel.
- Token incentive clauses (if applicable):
- Specify the type, quantity, and corresponding value of tokens;
- Agree on details such as the issuance time, lock-up rules, and vesting schedule;
- The Token Incentive Plan can be attached as an annex to the agreement.
Recommendation: Even if the domestic labor relationship model is adopted, a Salary Supplementary Agreement or special incentive document should be signed simultaneously to ensure that the salary terms are fully stipulated.
(II) Strictly Ensure Fund and Foreign Exchange Compliance
In cross-border payments or cryptocurrency settlements, it is essential to plan the compliance path in advance to avoid crossing legal red lines:
- Comply with foreign exchange management regulations:
- If cross-border fiat currency payment is involved, foreign exchange settlement should be handled through compliant channels, and private currency exchange or cross-border fund transfer should be avoided.
- Compliance tips for cryptocurrency payment:
- Pay attention to the current regulatory status of cryptocurrencies in China to avoid violating financial regulatory policies;
- It is recommended to assess the legality and stability of the payment path in advance, and do not ignore compliance risks just because “this is common practice in the industry”.
- Joint responsibilities of enterprises and individuals:
- Both companies and recipients should take the initiative to understand relevant laws and regulations, and consult professional legal or tax advisors when necessary to ensure that fund transactions are legal and compliant.
Lawyer’s Reminder: Compliance is not a trivial matter. Do not ignore potential legal risks in different fields for the sake of convenience or industry practices.
Conclusion
What the Web3 industry represents is a more flexible and decentralized employment and incentive method, but legal risks do not disappear because of this. On the contrary, at a stage where rules are not yet fully clarified, compliance awareness is particularly important.
For enterprises, compliant salary arrangements help stabilize teams and reduce dispute costs; for practitioners, fully understanding the legal risks behind the salary structure is the most basic protection for their own rights and interests. Innovation in Web3 should not come at the cost of ignoring the law; rational and prudent participation may be the path to long-term win-win results.
〈What’s a Reliable Way to Pay Salaries to Web3 Workers?〉這篇文章最早發佈於《CoinRank》。
