Coordination is often treated as a soft problem. Culture, communication, shared values. Those things matter, but they stop being sufficient once a DAO crosses a certain size. Past that point, coordination becomes an economic constraint. Time, attention, and decision bandwidth turn scarce, and no amount of goodwill fixes that.
YGG reached that threshold early.
As the organization expanded across games, regions, and roles, the cost of alignment rose faster than the cost of infrastructure. Decisions took longer. Signal degraded. Contributors began operating with partial context. This is where many DAOs stall. They respond by adding more governance, more discussion, more process. That usually makes the problem worse.
YGG’s response was different. Instead of trying to synchronize everyone, it reduced the need to do so.
SubDAOs, vaults, and scoped mandates are often described as decentralization features, but they function primarily as coordination filters. They limit who needs to be involved in any given decision. Most participants do not need to understand the whole system. They only need clarity about the part they affect.
This matters because coordination failure is rarely dramatic. It shows up as fatigue. People stop showing up to votes. Proposals get delayed. Responsibility blurs. By narrowing decision surfaces, YGG reduces the cognitive load required to participate meaningfully.
There is also a subtle incentive effect. When decisions are scoped, outcomes become traceable. Success and failure attach to specific groups rather than disappearing into the DAO. That visibility encourages care. It discourages performative governance, where participation is symbolic rather than consequential.
From my perspective, this is one of YGG’s more underappreciated strengths. It does not try to eliminate coordination costs. It accepts them and works around them. That acceptance is rare. Many DAOs still behave as if better tools will eventually make consensus cheap. Experience suggests otherwise.
Of course, this approach introduces inefficiencies. Fragmented decision-making can lead to duplication. Standards drift. Coordination between SubDAOs requires negotiation rather than enforcement. These frictions slow execution.
But they also prevent gridlock.
YGG’s design implicitly recognizes that large DAOs do not fail because of bad intentions. They fail because coordination costs outpace their ability to manage them. By localizing decisions and limiting global dependencies, YGG trades speed for continuity.
That trade-off will never look elegant. It will always feel messier than a unified vision. But in systems built to survive beyond a single cycle, messiness is often a sign of realism.
