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ESOPs are possibly one of the only monetary ideas that liberals and conservatives agree on. While the left favors spreading wealth, the right wants to create more capitalists.
It’s also one of the factors that puts firms on various “best places to work” lists. Grocery chain Publix has never had a layoff in its 92 years in business and prides itself in saying “owners never want to lay off other owners.”
However, the crypto kids on the block have started looking for ways to scrap traditional ESOPs by introducing NFTs and tokens to the mix. Look no further – our big story for the day will address all the burning questions you’ve got.
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Today we look at:
- The various caveats that come with employee ownership in crypto startups
- A Web3 startup that offers loans by using NFTs as collateral
- Other newsy highlights such as a beauty startup’s latest fundraise and an Indonesian unicorn’s purchase of a stake in a local bank.
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Navigating uncharted waters
Image credit: Timmy Loen
ESOPs haven’t fully caught on in Southeast Asia, a recent study by Saison Capital and Svested revealed. Just 24% of the 124 startup founders understood how ESOP buybacks worked and only 36% were aware of the legal and tax setups that govern them.
Crypto firms are now using tokens to replace ESOPs in a bid to promote transparency and liquidity. Though they’re riddled with issues of their own, tokens might be a game changer – or a nonstarter – for startups looking to scrap ESOPs.
- Cutting through the noise: Under ESOPs, the stock option allocation process is often opaque because of the lack of transparency in salaries in Southeast Asia. Tokens, on the other hand, are easy to build benchmarks with since anyone can observe the tokenomics of different public projects.
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Addressing hiccups: While NFTs and tokens have several advantages in employee ownership, it’s still too early to replace traditional ESOPs. There is an abundance of existing templates that startups can rely on to design their ESOPs, but there are none for NFTs or tokens. Employees may also not have legal recourse if they don’t receive tokens as promised.
A gamer’s bank
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