The Top Ten Rules for Building an Effective DAO

1. Simple and effective first

The success of complex systems often stems from simple and effective prototypes. When designing the minimum viable product for a DAO, one should start simple and gradually evolve to complexity.

2. Focus on core efficiency

Typically, 20% of the key efforts can produce 80% of the effective results. When planning a DAO, one should focus on the core elements that can bring the maximum benefits.

3. Reasonable Time Planning

Work often expands to fill the available time. When setting goals for the DAO, a moderately tight schedule should be established, neither too loose nor too urgent.

4. Beware of Indicator Alienation

When a certain metric becomes the goal itself, it may no longer be a good measure. Careful consideration of potential speculative behavior is required when designing the incentive mechanism for the DAO.

5. The team size is moderate.

When a project is delayed, blindly increasing manpower may be counterproductive. The DAO should maintain a lean and efficient team structure to avoid excessive personnel expansion.

6. Embrace technological advancement

Technological development is advancing rapidly, and computing power is continuously improving. DAOs should keep pace with the cutting edge of technology and leverage emerging technologies to create value.

7. Value of Network Effects

The value of the network is proportional to the square of the number of users. The DAO should focus on expanding its user base to create exponential value growth.

8. Recognizing Social Limits

The number of stable social relationships that humans can maintain is limited. When expanding, a DAO should pay attention to maintaining a moderate scale or establish a hierarchical trust mechanism when necessary.

9. Modular Design

An excellent system should consist of independent yet collaborative modules. The architectural design of the DAO should follow the principle of modularity to ensure that each part can operate independently while working together.

10. Structural influence on output

The communication structure of the organization will affect the designed system. The DAO should adopt a flexible, flat organizational structure to promote innovation and efficiency.