A blockchain’s stakeholders can be thought of as belonging to at least one of several different constituencies.
- Developers provide the infrastructure the network runs on
- Block producers provide the engine which drives it forward
- Merchants provide utility (by allowing it to be exchanged for other goods)
- Users who run full nodes provide oversight to ensure that other participants follow the rules
- Users also create demand for the asset, and having more users increases its utility. When enough users choose to hold on to rather than spend the asset, they reduce the amount which is availabile to buy, generally leading to price appreciation.
The value of the cryptoasset is important for every network where it is used to incentivize block producers, because it determines the network’s security budget. A network’s security budget is in basic terms defined by the size of the rewards available to incentivize block producers to participate honestly.
Each constituency has its own role to play in an ecosystem which produces this common pool resource and gives it value. Different projects define the boundaries of these constituencies and set up the relations between them in different ways. The way in which the network develops is determined through the interactions within and between these constituencies.
I refer to these sets of stakeholders of a particular type as constituencies, because it is typically the (strength of) consensus or majority opinion within a constituency that matters when considering the effect that constituency has on the project’s commons and the direction in which it develops.