The Ten Basic Principles for Building a DAO

1. The evolution from simple to complex

Effective complex systems often stem from simple and efficient systems. When designing the minimum viable product of a DAO, this principle should be followed: start simple and develop gradually.

2. Focus on key driving factors

About 80% of the results usually come from 20% of the key inputs. When designing the minimum viable product of a DAO, one should identify and focus on those core elements that can bring the greatest impact.

3. Reasonable Time Frame

Work tends to expand to fill the available time or budget. It is important to set appropriate deadlines for DAO projects, neither too urgent nor too lenient.

4. Beware of indicator alienation

When a certain metric becomes a target, it may no longer be a good measure. This is especially important to consider when building a DAO system, particularly when it involves complex tasks such as public goods financing or identity verification.

5. Keep the team lean

Adding manpower to delayed projects may further exacerbate the delays. In the operation of the DAO, it is advisable to maintain a small core team size as much as possible.

6. Embrace technological advancement

Technological capability doubles approximately every two years, while costs are halved. DAOs should leverage this trend by actively adopting new technologies to create greater value.

The Power of Network Effects

The value of a network is proportional to the square of its number of users. The DAO should be committed to building an ecosystem that can generate exponential value growth.

8. Cognitive Social Limits

The number of stable social relationships that humans can maintain is limited. When designing organizational structures, DAOs should take this into account, reasonably dividing team sizes as needed and establishing appropriate trust mechanisms between different levels.

9. Modular Design

Follow the principle of "each program should do one thing and do it well." The DAO should build a modular system that allows various components to collaborate efficiently.

10. The organizational structure affects system design.

The communication structure of an organization will be reflected in the systems it designs. The DAO should adopt a software development-like approach to design its organizational structure, while being careful to avoid over-complexity.