The Problem
Web3 Freelancers
A growing amount of web3 freelancers use social media to find for jobs. This is no surprise as social media platforms like X (formerly Twitter) allow you to build relationships with the people you meet and often times can lead to better freelance job opportunities as opposed to putting up a gig on a freelance marketplace.
More than half of web3 freelancers state that their major concern is guaranteeing their crypto payment with having experienced at least 1 instance of payment dispute or non-payment altogether.
Web3 Projects
On the flip side, 90% of web3 hirers are sourcing freelance talents through social platforms and offering full crypto payments. The main reason hirers are using these social platforms is the the social proof that social media provides. For these web3 projects, their biggest concern is guaranteeing they get what they paid for.
The leading solution to this problem is upfront payment or a deposit. The flaw here is the issue of counterparty risk.
Most freelancers asks for a deposit or upfront payment - this is the industry norm. But doesn't guarantee you'll get paid in full.
Some hirers are hesitant as a deposit doesn't guarantee delivery of work and in some cases, gets ghosted by the talent and lose their deposit.
The Existing Employment Contract Model
Upon a deep dive, it is quite astonishing that the existing and predominant model of a binding employment contract is through a legally binding document. This seems to work quite effectively in the traditional sense of hiring and in theory it seems like a simple solution to a work agreement. But in practice it is a method that comes with a string of loopholes. Ultimately it fails completely in a distributed network where the status quo is maintaining anonymity. The simple solution may be to force KYC onto both parties before engaging in a work relationship. However, even then, there is no mechanism that guarantees compensation.
The rise of gig marketplaces like Upwork and Fiverr has helped to somewhat solve this issue of guaranteeing payments by taking on the risk of counterparty and providing escrow tools. However, these marketplaces are not built specifically for web3 organisations that operate on-chain and transact in cryptocurrency. They do not offer direct wallet integration that not only escrows payments but deploy employment contracts on-chain. On top of that, the standard fees charged to talents on these platforms are insanely high, ranging from 15 - 20%.
So we look to the decentralised options available and there are some really good talent networks that are user governed. Namely, Braintrust which we believe is currently the standard for a talent-owned network. Providing a rigorous vetting process that only provides the best talents to organisations that are willing to pay top dollar. But the selective nature of braintrust as a talent network makes it more of a solution for finding the right match but not for creating secure, on-chain employment contracts between two parties.
As the workforce embraces web3, it is clear that trust-based infrastructure has a disadvantage as the theme of decentralisation is the distancing from tools that places trust in a third-party as they are always privy to exploits and do not allow web3 participants to function natively. So the important question is what are the features of a tool that will solve this problem of creating robust employment contracts that are enforceable in a trustless manner?
We start by figuring out the key features that an ideal tool for trustless employment should have:
Self-custody digital wallet integration. Connect Metamask and create a digital contract.
Custom contract parameters. Add pre-agreed release terms, deliverables, timeline, value, participants.
Participant smart contract linking. Digital contract links both parties on-chain via a smart contract.
Transparent & immutable contracts. Create non-fungible digital employment contracts that are deployed on-chain.
Smart crypto escrow. Digital contract houses funds as an escrow that is released upon work completion.
Multi-signature approval. Both parties are required to approve the release of funds upon completion of work.
Dispute resolution. Mechanism for a delegated dispute resolution in case of disagreements or breach of contract.
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