NFTGo Column | From MVP to MVD: The Evolution of Web3 Thinking

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From Minimum Viable Product to Minimum Viable DAO

The concept of MVP (minimum viable product) was initially proposed by Eric Ries in "The Lean Startup," which means to quickly and concisely build a usable product prototype to test if the product meets market expectations. Through this simple prototype, the product is continuously refined through rapid iterations to ultimately adapt to market demands.

Rapid trial and error, rapid iteration. By creating a product to meet user needs, transforming needs into functions, and functions leading to user growth.

Now, the community form initiated by DAO is causing a paradigm shift in this innovative cycle. With the rise of the crypto boom in 2021, it is estimated that there are approximately 1 million participants in DAOs. According to ConsenSys data, the Top 20 DAOs collectively hold over $14 billion in digital assets. Previously, it was often said that without good ideas there are no users; consumers monetize through data to become new products. In the Web3 field, to some extent, without a community foundation, there is no project. Consumers transition from "products" to community members, investors, and profit sharers with diverse roles.

The hierarchical system of rights becomes more flattened, and Web3 promotes a creator-driven economy while rewarding consumer participation, ushering in a new era of social networks. Next time, before starting to design an MVP, it might be better to shift the focus from the value assumptions of the product itself to community-based consensus exchange thinking.

Value Hypothesis: Do users find the product useful and valuable, do they consider the product "amazing" and "far superior to other products"?

Consensus Exchange: Initiators drive more people to come together to influence each other through proposing valuable consensus, engaging in value exchange and autonomous dissemination. Do users agree with this value?

Imagine how users can become your profit sharers and entrepreneurial partners, not just your consumers?

4M Elements to Initiate MVD

To initiate a minimal DAO, just remember the key 4M elements: Mission, Member, Mechanism, Money.

First, determine the vision or goal you wish to achieve. Second, consider the type of people you want to gather to work with you, defining the roles of members. Third, consider how to establish management mechanisms, including voting, incentive mechanisms, and decision-making mechanisms. Fourth, consider funding and a well-developed token economic system, how to deliver and transfer value, which can be NFTs or tokens.

From Assumed Functionality to Consensus Cohesion

Previously, one or two people proposed and confirmed product functionalities; today, a group of people launch products in a way that aligns with the motivation and values of DAOs through bottom-up contributions. The minimal viable DAO prioritizes the community, with consensus preceding the product. Whether it's formulating proposals, voting, defining roles, or consumption, all can be achieved through smart contract-created modular DAOs.

Take Apecoin DAO, for example, one of its visions is to cultivate a community composed of creators and innovators. Before anything begins, initiators and organizations need to plan a comprehensive protocol and rules, starting with increasing the value of tokens owned by each DAO member to benefit the entire DAO.

Similarly, Bankless DAO, with many high-quality, insightful articles and structures, has accumulated the first wave of consensus—yearning for a bankless society. DAO members continue to branch out forming new guilds.

From Passive Acceptance to Autonomous Voting

Generally, community members propose future operations, then gather to vote on each proposal. Approved proposals consolidate community consensus, shifting users from passive acceptance to community collaboration within this framework. Additionally, each DAO member oversees operations to some extent.

During voting, attention should be paid to the consistency of incentive measures, maximizing individual and organizational interests. For example, ApeCoin holders can submit ideas and thoughts in the form of posts, confirmed by moderators for alignment with community interests. An AIP idea can be collaboratively developed, receiving comments from others. Subsequently, moderators can publish the AIP on Snapshot; once live on Snapshot, the Live AIP will open for voting. Voting options are "For" and "Against," with "For" meaning voters fully support the implementation of the AIP as proposed.

From User Testing to Token Governance

In the past, MVP focused heavily on user testing and feedback, with user feedback used for the next development iteration. However, when initiating MVD, it is necessary to consider how to convert user contributions into funding and incentive mechanisms, as well as how to obtain and allocate governance.

This is typically achieved through token issuance or NFT issuance, both of which can raise funds to supplement DAO treasuries. Token holders have various rights, such as voting power and partial governance rights. Additionally, freelancers, industry advocates, and those interested in projects can earn additional token rewards through governance participation in DAOs. Their roles create unique value propositions; their commitment and efforts in the community can directly link to financial capital.

This is an important step in transforming members into participants and stakeholders. Members not only need a sense of belonging and connection but also need to invest in what interests them. The token's value is directly related to community values, such as member benefits and privileges, social capital and status, long-term community influence, community profits, and token supply and demand. If issued in NFT form, rarity and other factors also play a role.

Observing the majority of DAO or community token holders, they can often be categorized as HODLers, Supporters, Advocates, Flippers, Innovators, and the different proportions of each category represent the quality levels of the DAO.

Of course, DAOs also have their bank accounts or treasuries, acting as an internet community with a shared bank account, independently determining how to allocate community resources and economic rewards. For example, Doodles' community treasury, DoodlesBank, is used to support various community activities. In terms of decentralization, democratization, and economic participation, DAOs are the purest web3 communities and the key principles of the new ownership economy.

Furthermore, Staking can be used to promote the development of token and NFT ecosystems, improve supply and demand, while incentivizing early adopters and existing ecosystem participants. Models like the ApeCoin DAO's dual staking of NFTs and tokens are likely to become a common trend in the future.

From Validating Assumptions to Taking Action

DAOs often encourage the community to propose interesting ideas through funded projects, where individuals with entrepreneurial spirit can freely submit proposals. The level of participation varies for different DAOs; for some, people come together to achieve a common goal, such as the previous Constitution DAO and Assange DAO, while others aim to pool personal funds to find better investment directions, like SharkDAO. Projects can also gather a group of individuals with shared values through PFP to gradually realize a roadmap.

Technology is Just a Means

Over time and with network effects, social media has gathered billions of users. Large companies have profited significantly from user attention, time, and wallets. Web3 aims to disrupt these concepts, not only benefiting early investors and teams from these network effects but ensuring that all users contributing to a project's success also benefit. Thus, users become partial owners of the product.

Decentralization and fairness depict a beautiful vision of the future. However, it is important to note that Web3 and DAOs cannot solve all problems. Many blockchain projects are based on the idea of technological supremacy, believing that new technologies and concepts can solve most social issues. However, technology is just a means to an end; only a transformation in thinking can be eternal. In the industry, our attention is constantly diverted by new hot topics, continuously overshadowed by new temptations, the frenzy of PFP, novel concepts, and decentralized organizational operations will undergo time considerations.

Freedom of Expression and the Second Personal Revolution

Community first, then the product.

In MVP, we assume consumers have such needs. In MVD, we do not assume; we create and choose any needs. In MVP, demand size is determined by a few people, evaluating the best ideas. In MVD, the community leads through voting, executing the best ideas. In MVP, the community is your test bed. In MVD, the community is your investor. In MVP, the community is your consumer. In MVD, the community is your partner.

A well-functioning DAO project or product generated by a DAO, compared to MVPs in the Web2 era, is more likely to yield a positive outcome. In MVPs, funds often flow from the community to the creating team, accompanied by losses. Under DAO operations, the community and creating team continually attract people from outside the community; funds flow from outside the community to within, rather than continuously concentrating from the majority to the minority within the community.

Transitioning from a product-centric approach to an individual-based creation also reflects a new feature of society: valuing participation and expression, emphasizing self and uniqueness, and focusing on entertainment and consumption. In a personalized society, classes become more blurred, and self-expression brought by the second personal revolution becomes paramount. If we truly want to move towards democratization and liberation, transferring the discourse power of large companies to individuals, perhaps we need to innovate from a thinking perspective. How people's motivations for doing things, and how the final benefits are distributed, are crucial.

MVD is a practice of democratizing monetary systems and may become a new discourse method in the future. From paid use to shared profits, regardless of the ultimate goal and scope of DAOs, their success depends on genuine recognition of group strength and the ability to harness collective energy to yield results.