Ten Principles for Building an Efficient DAO

1. Evolution from simple to complex

Effective complex systems often stem from simple and efficient systems. When designing a minimum viable product, one should start simple and gradually evolve. This principle helps ensure a solid foundation for the system, facilitating subsequent expansion.

2. Focus on core elements

Approximately 80% of effective results come from 20% of key efforts. When designing a minimum viable product, focus should be on those core functions and features that can bring the greatest value. This helps to optimize resource allocation and improve efficiency.

3. The Art of Time Management

Work often expands to fill the available time or budget. To improve efficiency, reasonable and challenging deadlines should be set. This can motivate the team to work more efficiently and avoid unnecessary delays.

4. Balance of Indicators and Objectives

When a certain metric becomes a target, it often ceases to be a good metric. When building systems, especially those aimed at accomplishing difficult tasks, care should be taken in setting metrics to avoid distorting behavior in order to meet the target.

5. Trade-offs in team size

Adding manpower to a delayed project may make the delay even more serious. Keeping a smaller team size is usually more beneficial for the efficient advancement of the project. Caution should be exercised when expanding the team size.

6. The Exponential Effect of Technological Progress

Technological development is growing exponentially, while costs are declining exponentially. This trend creates tremendous opportunities in the tech field. When building a DAO, we should fully leverage this trend and embrace the possibilities brought by new technologies.

The Power of Network Effects

The value of a network is proportional to the square of the number of users it connects. When designing a DAO, it is important to focus on building network effects that can generate exponential value, which will significantly enhance the overall value of the organization.

8. The cognitive limits of social relationships

There is a limit to the number of stable social relationships that humans can maintain. Unless necessary, a smaller team size should be kept. When expansion is needed, it is important to establish appropriate trust mechanisms at each level.

9. Modular Design Philosophy

An excellent system design should follow these principles: each module focuses on doing one thing well; modules can interface smoothly; all modules can work together. When building a DAO, a modular design approach should be adopted to enhance the system's flexibility and maintainability.

10. Consistency of Organizational Structure and System Design

The system of organizational design often reflects its internal communication structure. When designing a DAO, attention should be paid to the consistency between the organizational structure and the system architecture, avoiding an overly complex overall structure that leads to difficulties in expansion.