DAO The Way Part 6

By xuanling11 | Crypto Learning | 9 Feb 2022

Here is DAO part 6. I drove myself into the rabbit hole and DAO seems like a huge effort of building and designing from scratch of economy, work, team, technology, management, and many more.



There is more to learn than to execute in DAO. Compared to traditional corporations, DAO can improve and become its own type of corporation structure in the future.


What to Focus


DAO is not a solution for all. However, before you dive into DAO, you want to set a clear expectation on what you want to build a team about and what value DAO can provide that traditional corporations cannot. Experience is one aspect to have a DAO to provide but if the value of DAO created is the same as a traditional practice, then DAO may not be necessary even though decentralization sounds wonderful.


Design Value

In DAO, you are creating value. In a traditional business sense, value comes from customers. If customers want something, that is a valuable aspect business needs to focus on. DAO inclines toward the community. Customers are part of the organization. Therefore, DAO is creating value with an experience attached. You will design an experience that tailors down to community wants and needs. 


Define Value

In a traditional business sense, defining value comes from your product design process. Part of the input comes from customers and other parts of the input come from broader research. However, whoever had a management role decides on the final product outcome. 


In DAO, the value will constantly change based on the growth of the community. The top-down structure to define value will have a negative impact on community engagement. Every community member wants to say about the value and input their voice. Therefore, it is a crucial part to serve the community and get their input into value. It will become a core of the DAO and bond everyone to work together.



Defining what is valuable really helps to layout how to compensate your community members. Blur out value will make compensation harder to be fair. 


Discuss what you contribute

Before even entering into contributing your time, make sure to discuss with a core team or any lead in the community. Express what you can contribute and ask what they can compensate for. Many DAOs focus on asking members for contributions but lack a system on how to compensate their members. Here are three tiers of compensation that DAO can consider to separate their tasks on:


Contribute as self-inspiration

Community members can start their own tasks to contribute. Sharing news and information about the topic DAO focus can be the first step of contribution. 


Contribute as beneficial

Composing members' thoughts and ideas to share in the community can be the next step of contribution. It is feedback on news or information. It starts the momentum of the conversation and possibly dives into a deeper question that DAO tries to solve.


Contribute as task

The answer to the question can become a solution that the community as a whole tries to resolve and accomplish. These then can become a task for members to go into depth research and create tools to resolve problems.


Contribute as feedback

The solution that community members provide may not be perfect at first. Feedback is necessary to continue improving the solution.


Level of Compensation

Once you come up with the level of contribution, you can compensate accordingly. There are many ways to compensate members from honorable title to monetary compensation. Many DAO is lack funding at the early stage, promised compensation may not retain members to contribute sustainably. Therefore, designing an economy to compensate members fairly is another challenge that DAO has to figure out even before recruiting members. 


Permission to Permissionless

At the beginning of DAO, the organization may run like a top-down structure due to core members recruiting and limited resources. However, you will need to transit the community into DAO and become a permissionless space for members to freely contribute. 


Management to Delegation

You manage DAO at the beginning of the stage because many members are still learning the space. Transition into delegation is a crucial success to becoming a DAO. Delegation is an art rather than a science for people to follow. However, the more delegation, the more efficient that DAO can operate by itself.


Right Information to Right Tools

To transition into a DAO, members will have the ability to use tools and complete tasks by themselves. Right information sharing is the first step. However, core members need to carry members out to use each tool and mentor them to accomplish their tasks.


Poor Insight to Metrics Driven

At the beginning of the DAO, it may be a poor insight. Once more data is collected and contributed, the organization will become more metrics-driven. Skill sets of members will become more concentrated and more specialized. Data will become a more critical part to gauge DAO into their specialty and narrow down their mission.

In Conclusion

There are many areas to focus on and to build because everything is open to discuss and experiment into. 


Stay tuned for the next article!

Photo by Markus Spiske on Unsplash
Note: the post was shared on multiple platforms here.

You can refer my previous article lists here
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2022 Prediction #2: L2 Bridges
2022 Prediction #3: Zero-Knowledge Proofs or ZKPs
2022 Prediction #4: Regulated Defi On-Chain KYC
2022 Prediction #5: Institutional Crypto Adoption
2022 Prediction #6: Defi Insurance
2022 Prediction #7: NFTs-Based Communities - DAO 1.5
2022 Prediction #8: Metaverse and NFTs
2022 Prediction #9: Web2 Companies’ FOMO
2022 Prediction #10: Time for DAO 2.0
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DAO The Way Part 1
DAO The Way Part 2
Who Is The Winner of The Crypto Adoption
Phishing Attacks
DAO The Way Part 3
What You May Expect NFTs After 6 Months and Beyond
DAO The Way Part 4
Licensed NFT vs. IP Law
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DAO The Way Part 5
Lessons Learned From Wonderland DAO
Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.

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