Outlier Ventures Weekly Brief Issue #15 |   View Online
Mapping Stakeholders And Value Exchange
Unlike web 2.0 projects that solely had to focus on designing optimal user experiences and unit economics of the business, token oriented projects tend to walk a thin line between optimising stakeholder interests and incentivising new users. The freemium model that is generally found in many behemoths of the social web today, may not be applicable to token oriented projects. The quick rise and decline of projects that focus solely on air-drops as a mechanism to attract users is one indicator of this. How then do we ensure all stakeholders in a token-based system are aligned optimally?  Geoff Lefevre from our crypto-economics team believes it begins with user-research. We take a look at how stakeholder mapping and value exchange mapping could help create stronger token ecosystems with MakerDAO as an example today.

Table : Types of keepers in MakerDAO

MakerDAO relies on independent, often automated decentralised agents that compete against each other for profit to maintain the network. We suggest referring to their whitepaper for a full explanation on how they work. There are 5 types of keepers in the system - each responsible for liquidation of collateralised debt positions, arbitrage, auctions and market-making. The diagram below gives a high level overview of how the keepers interact with one another. Each keeper has their own unique combination of interaction patterns defined by the Maker system. Within this stakeholder map, it is also critical to map out key interaction patterns for stakeholders on the network. Getting a clear definition of the incentives, and local constraints for each role is an important step in designing mechanisms for global optimisation. In other words, designing how stakeholders interact with one another could be instrumental to a network's stability and security. 

Where stakeholder mapping helps one identify the actors involved in an economy and how they relate to one another, value exchange mapping helps reveal opportunities to generate revenue streams and save costs. This is often an iterative process that involves rearranging stakeholders and active elements in the network. Fundamentally, it involves laying out all possible partners and how they could deliver and receive value. In the case of MakerDAO, the system generates value in maintenance of a target rate for helping stabilise the  DAI token's price. This process is driven by keepers who often have financial incentives for doing so. 

Token design requires an understanding of the incentives for each participant in the ecosystem, the associated business model, the market structure, and the network structure. The final model leads to a protocol design that should allow the network to sustain itself in a healthy manner while prioritizing system safety by correctly engineering incentivisation and disincentivisation mechanisms. For more on MakerDAO's governance, economics and implementation, we recommend checking this GitHub repository. Grab the entire post by Geoff here on how stakeholder mapping and value exchange mapping can be implemented. More on token ecosystem creation in our full  report.

Disclaimer: Outlier Ventures was not involved in MakerDAO’s token design, and is currently not affiliated with the project.

Crypto is spawning a generation of programmers that understand the fundamentals of game theory, finance, and governance.
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