The Ten Rules for Building an Efficient DAO

Rule One: Start Simple, Gradually Increase Complexity

Effective complex systems often originate from simple and effective systems. When designing the minimum viable product of a DAO, this principle should be followed, starting simple and gradually improving and complicating as it develops.

Rule 2: Focus on Core Elements

About 80% of the results come from 20% of the key efforts. When designing the minimum viable product for the DAO, focus should be on the most important functions and features to achieve maximum effect.

Rule Three: Set Reasonable Deadlines

Work often expands to fill the available time or budget. To improve efficiency, reasonable deadlines should be set—neither too urgent nor too lenient.

Rule Four: Carefully Choose Evaluation Metrics

When a certain metric becomes a target, it may no longer serve as a good evaluation standard. When constructing systems to handle complex tasks (such as public goods fundraising or preventing identity fraud), it is essential to carefully select and use evaluation metrics.

Rule Five: Keep the Team Lean

Increasing manpower for delayed projects may lead to further delays. Therefore, it is advisable to maintain a smaller team size as much as possible to improve efficiency and coordination.

Rule Six: Embrace Technological Advancement

Technology is evolving rapidly, and computing power is continuously improving. The DAO should fully leverage this trend and utilize technological advancements to create value and enhance efficiency.

Rule Seven: Value Network Effects

The value of the network is proportional to the square of its number of users. DAOs should strive to expand their user base to create exponential value growth.

Rule Eight: Pay Attention to Social Scale Limitations

The number of stable social relationships that humans can maintain has a cognitive limit. Unless necessary, a smaller team size should be kept. If expansion is needed, attention should be paid to establishing appropriate trust mechanisms at different levels.

Rule Nine: Modular Design

Following the philosophy of "one program doing one thing well," a DAO should adopt a modular design, allowing each component to operate independently while also cooperating with one another to enhance overall efficiency and flexibility.

Rule Ten: Organizational Structure Affects System Design

The communication structure of an organization will be reflected in the systems it designs. When designing a DAO, one should draw on software development methods, pay attention to the consistency between organizational structure and system design, and be wary of the scalability limitations of the overall structure.