Towards a (Better) Practice of Stakeholder Mapping in Crypto Networks

Kevin Nielsen
Nov 14, 2018 · 14 min read

Power and urgency must be considered and attended to if projects and networks are to serve the legal and moral interests of legitimate stakeholders

Project objectives have been unclear and obfuscated

Decentralization is not a goal, it’s merely a tool

At the recent Crypto Springs conference, I was lucky to listen to Soona Amhaz and Jackson Palmer discuss the misuse of the word “decentralization”, and its confusion as a goal to many projects, rather than a means to an end. Gregory Rocco took this idea a step further in “The Death of Decentralization” and identified the following characteristics as what most people are likely referring to when thinking about decentralization: censorship resistance, immutability, verifiability, accessibility, and social consensus.

It’s important to understand that “[these characteristics] are not inherently valuable [by themselves]; they are valuable due to serving a specific user need”. For the most part, it’s illogical to market your project as achieving any of these characteristics if it’s not helping you reach the project’s goal. So, what is it really that these characteristics could enable? What are people claiming to strive towards?

Current Narratives

The overwhelming rhetoric seems to gravitate towards three ideas: Web3, Sound Money, and Open Finance - Jon Choi outlines these beautifully in “Enter the Crypto Idea Maze”. To me, all of these circle around the empowerment of certain stakeholders that have been misrepresented (Web3) or deprived access (Open Finance) to risk-free stores of value (Sound Money) given inefficiencies and negative externalities of existing economic and political systems.

This is obviously a blatant oversimplification, and it's important to note that this diverse industry has connected thousands of people each with slightly skewed opinions of where the value of this technology lies; what is considered to be a goal or a success is extremely subjective and varied.

Even so, if we consider any of these narratives to hold, the overarching goal of empowering certain stakeholders requires an understanding of what drives their behavior; in essence, understand how they act and what they really want, in order to design these systems with them (the goal) in mind.

The dynamics of participant behaviour

The Keynesian Beauty Contest

Stakeholders will behave as a function of whoever else is present in an ecosystem. Behaviour is not stagnant relative to a specific group and cannot be analyzed in a vacuum. Instead, it's important to note relational dynamics: all these different stakeholders have a motivation to convince the others that their objectives are primary.

Using blockchain technology, we then reduce the need for a coordinating entity (like a firm) that unilaterally allocates resources, causing the dynamic to be exacerbated in “functioning” crypto ecosystems. A sole group cannot dictate the direction of the network (in theory) and their survival may even be dependant on the other stakeholder groups. These networks should be in a constant pull and push dynamic between participants which ideally, through a structured governance or cryptoeconomic mechanism, then reach a stable enough equilibrium with characteristics that facilitate their objectives.

This relates to a concept introduced by Keynes in a 1936 paper called The General Theory of Employment, Interest and Money. Tony Sheng summarizes it nicely in this article: A Keynesian Beauty Contest describes a game where the players are incentivized to take actions based on predicting the actions of other players (who are also trying to predict the actions of other players).

People have written about the Keynesian Beauty Contest as it relates to crypto before, but it has been mostly focused on speculative market dynamics and has been used to explain instances of market irrationality. However, at a recent CryptoOracle conference call, Ari Paul argued that it's not just crypto market participants that engage in a “beauty contest”; its every stakeholder group, participant, and user that is trying to bet and understand what they can do to sway other stakeholders, and what they might do in turn to influence them.

Let’s take a look at who controls the Bitcoin network

A great example is given by Ari when he asks who controls the Bitcoin network. In practice, no one really controls it. Instead exists a beauty contest, creating a complex but relational dynamic between all parties that at its core, is what makes Bitcoin so special:

  • If miners mine an asset no one wants to buy, it’ll be worthless. They clearly have elements of power, but in this instance serve the consumers.
  • If developers implement changes but they aren’t adopted by miners, the network suffers in security given low hash power and loses value.
  • If service providers facilitate UX but pay no attention to upgrades or changes in the protocol, users will distrust their ability to act as a facilitator.

These are just a few examples, but this “circular reasoning” fueled by economic factors and incentives towards value, security, and growth, showcases the interdependence of interactions between diverse participant groups. Most importantly, it depicts hints at why analyzing participant actions and expected behaviours could prove to be very valuable to anyone interacting in a similar network.

Certain ideas in stakeholder management theory can provide frameworks to analyze the needs, actions, and behaviours of key participants, not only based on their unique attributes, but also on their dynamic relationships with disparate groups.

Stakeholder management has already proven effective

For traditional businesses, it’s becoming clearer that creating shareholder value should no longer be the single point of focus, given that stakeholder engagement has proven to be beneficial to a firm’s financial performance time and time again, and even though it has taken a while, we’ve experienced a shift by many (or at least a call to action) to focus on key stakeholders.

Somewhat understandably, the same cannot be said for the crypto space. Disciplines have sprung up to tackle incentive alignment (most notably, cryptoeconomics aims to do this through the use of monetary incentives secured by cryptography). While these have placed great emphasis on tools and mechanisms to encourage behaviour and align incentives in theory, there has to be further analysis of what stakeholders want, what type of influence they have, and how they really act in practice. Engineers and system architects are working with dangerous assumptions about their key stakeholders.

Summing up importance:

  1. You can’t claim to empower stakeholder groups if you don’t recognize the importance of understanding their behaviour
  2. Their motivations will drive this behaviour given complex network governance dynamics and relationships
  3. Once we understand this behaviour, we can dynamically prioritize based on project goals (what Freeman called “The Principle of Who or What Really Counts” in 1994)

So, what do I do?

From the theory developed by Mitchell, Agle, and Wood, comes the Stakeholder Salience Model built on the extensive ideas put forth by scholars like Freeman, Clarkson, Donaldson, Preston, Dunfee, and many more. This model, which can fit into the four steps of the stakeholder mapping process (identifying, analyzing, mapping, and prioritizing), can provide a simple guide to start thinking about the dynamics of network participants and their relationships.

While past academics simply looked for a compelling reason why some relationships are legitimate and why others are not; Mitchell, Agle, and Wood expand scholarly and management understanding beyond legitimacy to incorporate stakeholder power and urgency of a claim, arguing that these dynamic attributes will make a critical difference in our ability to meet legitimate claims and protect legitimate interests.

Given the distribution of power and influence in crypto networks (…not yet, really) and opaque claims to legitimacy by diverse participants, this model fits well as we explore stakeholder relationships and prioritization in the space.

I want to reiterated that this model is derived from a tiny portion of the theory developed by a myriad of research papers which have been reinforced by corporate case studies, and is only intended to kick-start the process of stakeholder management. This is by no means a comprehensive guide to stakeholder theory and management.

Step 1 — Identification

The most common definitions of a stakeholder point to groups that are affected, experience or perceive actual or potential harms and benefits as a result of a firms actions (Donaldson and Preston 1995). Nevertheless, in the context of most public, open source protocols and projects that aim to relinquish centralization, a more fitting definition considers stakeholders as individuals or constituencies that supply critical resources to [the network], or place something of value at risk, or have sufficient power to affect the performance of [the network] (Kochan and Rubenstein 2000).

Identification is as simple as making a list of the stakeholders that should be considered. Add them if they fit the definition above, and then ask yourself these fundamental questions:

  • Is this stakeholder crucial to the survival or intended operation of the network?
  • Does the stakeholder have a fundamental impact on the network’s performance?
  • Can you clearly identify what you want and need from the stakeholder, now and in the future?
  • Does the stakeholder have “skin in the game”? Value at risk? Would the malfunctioning of the operation affect them in any way?

Although it isn’t crucial, it might also be helpful to separate stakeholders into Primary and Secondary stakeholders, where primary stakeholders are groups without whose continuing participation the project could not survive, while secondary stakeholders are groups who do not engage in direct transactions but are still necessary for the survival of the project and may also be indirectly affected by the operation of the network.

Step 2— Stakeholder Attributes

Mitchell, Agle, and Wood propose that the stakeholders that have now been filtered down will possess some combination of three critical attributes: power, legitimacy, and urgency, all of which influence behavior — let’s break these down:


The probability that one actor within a social relationship would be in a position to carry out his own will despite resistance” (Weber, 1947), “a relationship among social actors in which one social actor, A, can get another social actor, B, to do something that B would not otherwise have done” (Pfeffer 1981).

I highly recommend reading Philip Daian, Tyler Kell, Ian Miers, and Ari Juels’ blog on Dark DAOs — it provides an excellent example of the use of financial resources to influence voting actions:

Questions — Do you believe any of your listed stakeholders could use coercion, material, financial, or even symbolic resources to influence the actions of another group? To what extent? Would you be able to tell?


A generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions” (Suchman 1995)

We can subdivide legitimacy into three categories: individual, organizational, and societal. Legitimacy is something highly underappreciated, especially given that most governing is derived from strong conviction, confidence, and social consensus that everyone will do things a certain way. It’s important to take a step back and try to do away with subjective perceptions, and understand how a group is perceived by everyone else, including participants and the broader community.

Given the lack of norms and definitions in the crypto space, I would argue legitimacy is the hardest attribute to assign. We’ve unfortunately seen more than enough illegitimate actors benefit from misguided and fake perceptions, made by uninformed retail investors.

Questions — How legitimate is the stakeholder’s claim for engagement? How has the stakeholder been perceived by others in the past? What kind of ulterior motivations or conflicts of interest could they have when proposing an action?


Calling for immediate attention when the following two conditions are met: (1) when a relationship or claim is of a time-sensitive nature and (2) when that relationship or claim is important or critical to the stakeholder (Mitchell, Agle, and Wood 1997)

I would expect time sensitivity to play larger roles in on-chain governance processes, in which most decisions have some sort of time constraint. Even so, urgent calls to action can come from multiple directions as long as the stakeholder considers these restrictions to be critical to them.

Questions —Is the group pressured to meet a deadline? Are they being pressured by external entities? How important are the time constrictions to them? What do they have to gain by meeting them?

Step 3 — Interaction of Attributes (Stakeholder Classes)

Once the stakeholders have been evaluated on the three attributes, they are mapped into the Stakeholder Salience framework displayed below. Each of these attributes is dynamically related to the other two, and it’s important we identify the stakeholders that actually overlap to begin determining their salience, and importance to the project.

  1. Dormant: These stakeholders have high power but low legitimacy and urgency. They have the power to cause problems for the project, and need to be carefully managed. However, their immediate interests are likely outside of the project scope.
  2. Discretionary: These stakeholders have high legitimacy but low power and urgency. Their needs and issues should be heard and understood by the project team, but incorporating those needs is likely to be discretionary based on the needs of other stakeholders with greater power or urgency.
  3. Demanding: These stakeholders have high urgency, but low power and legitimacy. They are usually a vocal stakeholder whose desires are likely not in the immediate project scope or a high priority. These are most likely to be project detractors if their demands are not incorporated.
  4. Dominant: These stakeholders have high power and legitimacy, but low urgency. Their power and legitimacy make them important for project success, but their low urgency means they may not have to be part of the core project effort.
  5. Dangerous: These stakeholders have high power and urgency, but low legitimacy. Their power and urgency can make them threats to project success, and they are often drivers of scope expansion or other changes that do not fall within the legitimate needs of the project.
  6. Dependent: These stakeholders have high legitimacy and high urgency, but low power. These might be end-users of an application, or stakeholders who will suffer a secondary impact from the project that represents a major burden for them. However, their lack of power makes them dependent on the project team to ensure their needs are heard and fully considered.
  7. Definitive: These are stakeholders who were evaluated as having high power, legitimacy, and urgency. They are the key stakeholders for a project and will be the focus of the project team.

The purpose is to assign each stakeholder group into one of these areas.

  • The stakeholders with low salience classes (areas 1, 2, and 3) are classified as “latent” stakeholders as they only posses 1 attribute.
  • The moderately salient stakeholders (areas 4, 5, and 6) are classified as “expectant” and posses two of the attributes
  • The highly salient stakeholders (area 7) are classified as “definitive” and possess all three attributes

Intuitively, the higher the area number (and the more attributes) a group possesses, the higher their degree of salience (for most cases).

Step 4 — Mapping & Prioritization

Mapping is a pretty straightforward task but should be done on an issue by issue basis. Depending on the issue, it’s probably unnecessary to engage with all groups at the same level of intensity all the time. Some useful questions to brainstorm key issues might be:

  • What are the issues for these priority stakeholders?
  • Which issues do all stakeholders most frequently express?
  • Are the real issues apparent and relevant to our engagement objectives?

Once you have identified an issue to map, you can allocate the stakeholder groups given their level of salience (step 3), as well as their expected degree of supportiveness for the particular issue:

The matrix allows you to snapshot how you should prioritize stakeholders given their level of salience and their supportiveness for each issue, with the top right quadrant hosting crucial stakeholders to engage and prioritize.

Looking Ahead

Although the planning, strategy, and action plan are topics for another article, visual mapping and prioritization facilitate choosing engagement tactics:

Defining what tactics should apply to each stakeholder group, given a specific decision could lead to a more focused engagement strategy and execution plan:

In Summary

This kind of analysis seems very trivial, but its intention is to encourage builders to stop and think about whom they’re building for and why it matters, and to provide clarity on project goals and expected accomplishments. Crafting an initial strategy, after having identified and prioritized stakeholder groups can help a project rethink actions around communications, transparency, and engagement, depending on how crucial the stakeholder is to the specific stage of development.

This technology may have given us the chance to experiment at a much faster rate with lower costs than ever before. The topics discussed in this article are by no means novel, and I encourage everyone to utilize resources and theory that have been extensively developed through the past decades to examine how they might be applicable to the crypto industry.

Thanks for reading! If you liked it, please support by clapping 👏🏻, sharing the post, commenting below or following my Twitter page:

Further Notes

It’s crucial to consider stakeholder theory as dynamic and subjective:

  • Stakeholder attributes are variable, not in a steady state.
  • Stakeholder attributes are socially constructed, not objective, reality.
  • Consciousness and willful exercise may or may not be present.

This reinforces the explicit need for resilient but adaptable governance structures that can adapt to systematic, systemic, and stakeholder shifts.

Traditional corporate governance theory is still relevant:

Exploring attributes and behaviors, through the lense of organizational and stakeholder theories will become more and more relevant as participant relationships become more important and complex.

Corporate Governance Theory by Suleyman Gokhan Gunay explores the definition and comparison of theories that constitute the corporate governance paradigm, of which some are surprisingly relevant to this space (Chapter II, Page 7, or Chapter I, Page 1).


  • Mitchell, Ronald K., et al. “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts.” The Academy of Management Review, vol. 22, no. 4, 1997, pp. 853–886. JSTOR, JSTOR,
  • Hillman, Amy J., and Gerald D. Keim. “Shareholder Value, Stakeholder Management, and Social Issues: What’s the Bottom Line?” Strategic Management Journal, vol. 22, no. 2, 2001, pp. 125–139. JSTOR, JSTOR,
  • “Chapter 1.” Corporate Governance Theory: A Comparative Analysis of Stockholder and Stakeholder Governance Models, by Suleyman Gokhan Gunay, IUniverse, 2008.
  • Donaldson, Thomas, and Lee E. Preston. “The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications.” The Academy of Management Review, vol. 20, no. 1, 1995, pp. 65–91. JSTOR, JSTOR,
  • Wijnberg, Nachoem M. “Normative Stakeholder Theory and Aristotle: The Link Between Ethics and Politics.” Journal of Business Ethics 25.4 (2000): 329–42. Print.
  • Olson, Eric. “Stakeholder Mapping.” BSR. N.p., Nov. 2011. Web. 22 Oct. 2018.
  • Morris, Jonathan, and Farid Baddache. How to Make Stakeholder Engagement Meaningful for Your Company. Rep. BSR, Jan. 2012. Web. Oct.-Nov. 2018.

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