Token liquidity strategies that keep your employees happy

The Web3 ecosystem presents a dual challenge for founders: unparalleled growth potential alongside managing highly volatile token-based compensation. Provide liquidity too soon or too haphazardly, and risk destabilizing your token’s market price. Fail to provide it at all, and watch your top talent seek greener pastures.

Getting token liquidity through secondary markets and Over-the-Counter (OTC) solutions are two essential strategies for navigating tokenomics and retaining top talent for blockchain founders.

Illiquidity vs. instability

Web3 pioneers often hold most of their wealth in illiquid project tokens, creating unique pressures. Personal liquidity needs for homeownership or stability lead to the classic “paper millionaire” scenario, where soaring valuations don’t yield immediate cash. 

Pantera blockchain compensation survey found 97% of respondents preferred fiat-based compensation, underscoring demand for tangible liquidity. 

Without managed access to their earned value, top talent risks attrition or burnout. While losing key personnel is a threat in any industry, for Web3, it’s an existential crisis.

Electric Capital’s 2024 Developer Report has shown that while the total number of developers in crypto is slightly down, a pool of established developers (those with 2+ years of experience) grew by 27%, while the number of newcomers and mid-level talent shrank.

This is where the urgency lies for founders, since this elite, experienced cohort contributes 70% of all code commits.

Losing an established developer is like losing a portion of your engineering output overnight. In an ecosystem where developer activity is the “leading indicator of value creation,” the inability to retain this high-impact talent is a direct threat to a project. This makes a strategic liquidity plan a core pillar of risk management.

The alternative to managed liquidity involves uncontrolled sales, causing turmoil. Large, unmanaged token unlocks or insider sales trigger “undue sell pressure.” Price volatility, negative “dumping” narratives, and eroding investor confidence are the primary risks associated with large, uncontrolled token unlocks. The 2017 ICO era, with few lockups and rudimentary vesting, often resulted in immediate insider dumps and poorly aligned incentives, acting as “money grabs.” This historical volatility underscores the fragility of tokenomics when unmanaged.

Strategic token liquidity

The solution is structured, controlled liquidity pathways benefiting both talent and market integrity. This means leveraging secondary markets and OTC solutions to manage sales away from public exchanges. 

Controlled Liquidity Mechanisms

OTC sales facilitate direct, private transactions for large token blocks, preventing immediate public price impact. Secondary tender offers enable companies or facilitators to purchase specific token amounts at predetermined prices. 

Leveraging SPVs, as discussed in our previous post, aggregates smaller employee allocations into larger blocks for relevant buyers, simplifying administration and ensuring discreet transactions. SPVs are also key for Digital Asset Treasuries (DATs), which usually do not want to interface with a lot of smaller retail investors. 

SecondLane’s October 2025 report shows Token (NFT, SAFT, Liquid Token) investments constitute ~59% of active deals by volume, highlighting token-based secondaries’ predominance.

Well-Structured Unlock Strategy

To protect your tokenomics and market perception, time liquidity events with milestones and positive sentiment to minimize negative impact. In particular, founders like to explore secondaries during late-stage rounds or pre-IPO when valuations are higher. 

Delaying public token launches ensures value accrues to builders before broader speculation. To ensure that, managing token volume and unlock frequency is crucial. 

StackUp recommends staggered unlock schedules to prevent sudden supply shocks [StackUp]. In SecondLane’s August 2025 report, we’ve seen token deals average 3.8 months to maturity, which highlights the rapid capital rotation requiring meticulous management. 

The Buyers and Post-sale Restrictions

When facilitating token liquidity events, the ideal type of buyer would be an institution or a family office strategically aligned with the project’s long-term vision. These buyers are less likely to immediately sell tokens, contributing to price stability.

Implementing lockups, extended vesting schedules, or encouraging re-investment incentives for the secondary buyers can further mitigate future sell pressure. 

Best practice for founders: ensure “insiders” (employees, investors, advisors, partners) have the same lockup periods and rules, as unequal access can sow mistrust and run afoul of securities laws. For US employees, a lockup of at least one year is legally advised, with 3-4 years being ideal for long-term viability [a16z – Token Comp Primer].

Keeping your talent happy

In Web3, the ability to realize token value is the ultimate differentiator for attracting and retaining top talent.

Smart liquidity strategies enhance employer branding, making a project highly attractive. In a reality where the best engineers, product managers, and business developers have endless opportunities, projects with foresight in managed liquidity stand out, offering not just high upside but predictable pathways to realizing that upside.

Well-structured secondary token sales are among the best practices, as they significantly boost retention. They reduce financial anxiety, allowing employees to achieve personal goals like homeownership without leaving or resorting to desperate public sales. 

As Grant Lee, co-founder of GammaApp, shared in his recent “every growth hack that got us from zero to $100M ARR” X post, “We’ll do regular tender offers so employees’ vested shares actually get them liquidity from time to time.”

For the founders and early employees, it’s a chance to enjoy the fruits of their labor while continuing to focus on building the company. Transformation of theoretical wealth into tangible assets boosts morale — when managed properly and justly. 

The execution

Token liquidity strategies come with intricate financial and legal undertakings, demanding precision and specialized expertise. 

Structuring OTC token liquidity involves managing transfer restrictions, facilitating stakeholders, and executing secure digital asset transfers. With all common legal and operational complexities, the process takes 2-6 weeks, from internal approvals to due diligence and closing. Be on a lookout for the Right of First Refusal (ROFR) clauses, which grant existing investors the right to match offers, adding time and complexity to the liquidity structuring.

Pricing Dynamics

Secondary pricing is highly nuanced. PitchBook data shows companies with recent funding trade at discounts of 0-8.5%, while 2020-2022 boom-era firms face steeper 31-59% discounts as the market reprices them. SecondLane’s September 2025 report shows a median discount holding at -30%, with 66% of sell offers and 70% of buy offers at an average markdown of -45%, underscoring market demand for significant discounts.

Notably, quality matters more than price here, calling for thorough diligence “beyond the dashboard”. Ensuring optimal structuring and flawless compliance requires partners with deep expertise in OTC markets, specific tokenomics, and evolving regulations. 

Conclusion

For Web3 founders, retaining talent and preserving tokenomics stability is a way to offer controlled access to value, mitigate market volatility, and secure long-term talent retention. This approach transforms a founder’s dilemma into a powerful competitive advantage, distinguishing projects poised for long-term success.

Nick Cote, CEO; Omar-Shakeeb, CBDO SecondLane