Token compensation: a brief explainer for job candidates

Token compensation in Web3 companies differs from traditional equity, and job candidates should understand its structure before comparing offers. Tokens can resemble equity in appreciating significantly and becoming liquid sooner, but the article states they are not equity by another name. Pre-launch token grants carry no tax on receipt but are likely taxed on exercise like non-qualified stock options, while post-launch grants are taxed immediately upon receipt, and the article suggests considering an 83(b) election if they vest. Vesting risks forfeiture, whereas lock-ups only restrict transfers, and the article advises consulting a tax advisor or attorney.