State of Braintrust Q1 2023

Key Insights

• Braintrust is a user-owned network that connects talent with hiring clients via a set of smart contracts and open-source software.
• Q1'23 saw a record supply of nearly 102,000 active talent, up 93% QoQ and 57,000 job applications, up 37% QoQ.
• While macro conditions temporarily impacted client growth (up 6% QoQ), job postings increased 26% QoQ, driven by existing client expansion and direct hire placements.
• Talent earnings reached an all-time high of over $20 million in Q1’23, up 7% QoQ.
• To date, Braintrust has facilitated $145 million in cumulative dollar value returned to talent on its platform.

Primer on Braintrust

Braintrust is a decentralized talent network. Although its user experience is similar to traditional talent marketplaces such as Upwork or Toptal, Braintrust is a user-owned network that does not charge talent. Instead, it only charges clients 10%. Braintrust connects talent with hiring clients via a set of smart contracts empowering a permissionless community. Braintrust leverages its native token – BTRST – to bootstrap client and talent engagement.

The BTRST token serves as the incentive and governance mechanism for the network’s key participants:

• Clients get their fees converted from fiat into BTRST via the fee converter smart contract; clients use BTRST to post jobs when searching for talent on the network.
• Talent uses BTRST to signal job availability or to access token-gated resources.
• Connectors earn BTRST by introducing, referring, and onboarding clients and talent.

All Braintrust stakeholders can earn BTRST, stake them, or participate in governance (e.g., propose new changes to the network, vote on product roadmaps). BTRST is also used as an incentive to complete profiles and finish educational courses on the Braintrust platform.

Key Metrics

Performance Analysis

Usage

Braintrust usage can be analyzed from the perspective of activities on both the supply and the demand side of the marketplace:

• Supply: knowledge workers seeking jobs on the Braintrust marketplace.
• Demand: clients posting jobs when in need of the services of talent.

Supply

Braintrust’s network supply can be gauged by the activity of talent and their job applications on the network.

Q1'23 saw an all-time high of nearly 102,000 active talent on the Braintrust network, up 93% QoQ. Talent activity is defined as talent submitting a job application, referral, or invoice, or when signing up or viewing a job on the Braintrust network.

To apply for jobs, talent must first undergo a community-led screening to determine if the candidate is suitable to apply for jobs on the Braintrust network. Afterward, Braintrust's algorithm connects the right candidate with the job based on criteria such as skills, experience, availability, and hourly rates.

In Q1’23, there was a substantial increase in talent applications in the context of a rough landscape for the tech industry. Applications overall rose 37% (from 42,000 in Q4'23 to over 57,000 in Q1’23). First-time job applications rose 83% QoQ (from 10,000 in Q4’22 to over 19,000 in Q1’23), while incremental job applications rose 22% QoQ (from over 31,000 in Q4’22 to over 38,000 in Q1’23).

This overall increase in job applications shows a healthy growing supply of talent on the Braintrust network.

Demand

Demand for Braintrust services comes mostly from enterprise clients searching for services supplied by talent. Hiring on Braintrust requires clients to post jobs. A recent Messari analysis of talent marketplaces by industry and role can be found here. Job posts are discovered either by talent or by connectors, who can refer candidates to jobs within their personal network.

In Q1’23, registered clients on the Braintrust network reached 1,411, up 6% QoQ from 1,337 in Q4’22. This increase was fueled by the availability of talent on the Braintrust network as direct placements. That is, direct placements on the Braintrust talent take less time compared to the lengthier process of getting approval for full-time hires. Examples of these direct placements are discussed in the “Key Milestones” section.

New job posts rebounded in Q1’23 to 447, up 26% QoQ. Simultaneously, as of March 2023, the average project duration on the Braintrust platform is 229 days, almost maintaining the level of 228 days in December 2022. The relatively long project durations may suggest that Braintrust engagements represent higher-quality longer-term jobs or repeat engagements that do not require a new posting every time a talent is sought after.

Revenue

Revenue on the Braintrust network consists of talent earnings and revenue accrued by Braintrust itself from charging clients a 10% flat fee.

Talent Earnings

Talent earnings on the Braintrust network reached an all-time high of $20.3 million in Q1’23, up 7% QoQ.

The monthly talent earnings surpassed the mark of $7 million for the first time in Mar’23, after consecutive increases in Jan’23 and Feb’23. Simultaneously, this upward trend in talent earnings corresponds to a 2x rebound in new postings from Dec’23 low. Notably, the overall decrease in new postings in Q3’22 and Q4’22 did not appear to negatively impact talent earnings. This relationship can be explained by Braintrust's focus on more technical talent, which, in turn, corresponds to a relatively high average duration of Braintrust projects.

Simultaneously, the overall macroeconomic climate and the Q4’22 tech layoffs appear to have had limited effect on the marketplace. Talent earnings remained at a solid level throughout Q4’22 and reached a new all-time high in Q1’23. As of Mar’23, the average project size on the Braintrust platform was over $92,000, up 5% from nearly $88,000 in Dec’22.

Braintrust Revenue

In line with talent earnings, Braintrust revenue in Q4’22 remained solid at $2.2 million, consistent with the revenue in Q3’22 and Q4’22. Braintrust revenue is accrued after a job is completed and talent is paid the contract value in USD. While the BTRST token doesn't accrue any network fees, Braintrust takes a flat 10% fee on top of all network transactions to sustain its operations and the community. This fee is paid by the client, representing Braintrust’s revenue. On a cumulative basis, Braintrust registered $13.5 million revenue from all network transactions since July 2019.

Notably, Braintrust does not collect any fee from talent. Instead, the 10% flat fee paid by clients in cash is sent to a smart contract (i.e., the fee converter) and used to buy back BTRST from the open market. The acquired BTRST tokens are then deposited to an on-chain pool managed by the Braintrust DAO, thus strengthening its treasury. This way, Braintrust aims to incentivize network participants to further build the protocol, and, at the same time, contributes value accrual of BTRST, as well as its usage in governance.

Network Growth

Gross Service Value

Braintrust measures the gross service value (GSV) to account for the growth of its entire network. The metric represents the actual dollar amount going into Braintrust before being distributed to the freelance talent. As per Braintrust’s example, if a client hires three developers who are billing at $10,000/month, the GSV for the month would be $33,000 ($10,000 x 3 developers + 10% Braintrust fee). Notably, the GSV takes into account only the dollar amounts that have been paid by the clients upon the completion of the projects.

Gross Contract Value

In order to account for all the projects that have accepted offers and the anticipated contract value, Braintrust uses gross contract value (GCV). GCV represents all actual and anticipated income into the Braintrust network. For example, if a client hires three developers who are billing at 10,000/month, for a 6 month project, the GCV would be $198,000 ($10,000 x 3 developers x 6 months + 10% Braintrust fee).

As of Mar’23, Braintrust has facilitated more than $145 million in cumulative talent earnings since Jul’19. Simultaneously, the cumulative gross contract value was nearly $165 million during the same time span.

On a quarterly basis, both GSV and GCV increased 6% and 9%, respectively. Braintrust’s network continued to grow steadily despite headwinds from the tough macroeconomic jobs environment. Braintrust maintains its growth in three ways:

• Staying focused on marketplace efficiency and effectiveness,
• Expanding into direct hire placement, and
• Upgrading tokenomics to incentivize the full career journey.

Qualitative Analysis

Key Milestones

Clients

New Braintrust clients in Q1’23 include Fortune 1000 employers like Bank of America, Google, and Meta. Besides Braintrust's relatively low-cost fee structure, the main value proposition for these employers is the availability of contract talent on the Braintrust network. That is, it takes less time to hire Braintrust talent compared to the lengthier process of getting approval for traditional full-time hires. In the case of Airbnb, the hiring time fell from three months to three weeks when using Braintrust.

Inclusion on Forbes Employer List

Braintrust was included by Forbes among the leading startup employers upon evaluating 2,600 U.S.-based businesses with at least 50 employees.

Governance

Tokenomics

The total number of BTRST governance tokens is capped to 250 million, out of which over 139 million (approximately 56%) are currently circulating. The BTRST token distribution is spread across four groups as follows:

• 19% (48 million) reserved for the team and early contributors
• 22% (55 million) allocated to early investors with 2 year lock (1-month cliff)
• 54% (135 million) reserved for community incentives and network rewards
• 5% (13 million) reserved for CoinList public sale

Voting

Braintrust uses both off-chain and on-chain voting to operate changes to its network. Ideas that receive support in Discord conversations are often turned into change proposals to be voted upon by the community. Off-chain voting occurs on Snapshot and consists of two sub-phases: temperature check (yes/no poll) and consensus check (which helps refine a proposal to a concrete solution).

If a proposal requires technical implementations or changes to the blockchain’s smart contracts, it will usually undergo on-chain voting before moving to the execution phase.

There is a time lock period of seven-days during which the proposal must be executed. If the results of the on-chain proposal do not suggest a change from the status quo, the topic will be closed. Otherwise, the change suggested in the proposal can be executed on-chain during the seven-day period. In this case, any user can send a transaction to the smart contract to execute the accepted proposal.

Roadmap

Professional Network

Braintrust plans to help talent connect with professionals with similar career goals. It will support talent through recurring learning engagements, governance, and the creation of goal-focused communities. At a later stage, Braintrust plans to create a single interconnected experience for talent to own their career through advice, connections, jobs, and goal-oriented learning. These activities will be powered by the BTRST token and governed by the Braintrust community.

Marketplace

In its current state, the Braintrust marketplace features new jobs and fosters talent growth through network liquidity and new talent acquisition. Its ongoing development efforts include standardized workflows and tools to generate training data for automated screening and matching algorithms. Braintrust is currently looking for new ways to incentivize its network and distribute ownership. Braintrust also plans to expand its client base and scale its product-market fit.

Closing Summary

Braintrust is a user-owned network that connects talent with enterprise clients via a set of smart contracts and open-source software. Although its network is still young compared to Web2 incumbents, Braintrust has attained product-market fit.

To date, Braintrust has facilitated $145 million in cumulative dollar value returned to talent on its platform. Q1'23 saw a record supply of nearly 102,000 active talent, up 93% QoQ and 57,000 job applications, up 37% QoQ. In terms of demand, Q1'23 saw over 1,400 Braintrust clients, up 6% QoQ. While new job postings increased 26% QoQ, average project length increased to 229 days, driven by direct hire placements. Talent earnings reached an all-time high of over $20 million in Q1’23, up 7% QoQ.

While Braintrust is certainly a long way from rivaling established talent marketplaces, its continued growth is setting a precedent for how Web3 two-sided marketplaces could outcompete existing incumbents. Braintrust continues to focus on market efficiency and effectiveness, expansion into direct hire placement, and platform innovation across the full career journey.

Despite its solid start, Braintrust faces the same challenge that many Web3 protocols face: scaling enough to truly challenge the incumbent players. In today’s digital job market, there is fierce competition to onboard the most talented knowledge workers.

Unlike other Web3 initiatives, Braintrust must place extra care in its project governance model. Although most DAOs suffer similar risks to a certain extent, a talent network mostly operates on the human layer where the code does not govern many vital activities.

This report was commissioned by Freelance Labs, Inc. All content was produced independently by the author(s) and does not necessarily reflect the opinions of Messari, Inc. or the organization that requested the report. The commissioning organization does not influence editorial decision or content. Author(s) may hold cryptocurrencies named in this report. This report is meant for informational purposes only. It is not meant to serve as investment advice. You should conduct your own research, and consult an independent financial, tax, or legal advisor before making any investment decisions. Past performance of any asset is not indicative of future results. Please see our Terms of Service for more information.

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