80/20 Rule (Pareto Principle)

The 80/20 rule, also known as the Pareto principle, is a principle that states that roughly 80% of the effects come from 20% of the causes. In other words, a small number of factors are responsible for the majority of the effects.

The Pareto principle can be applied in many different contexts, such as in business, where a small number of customers may generate the majority of a company’s revenue, or in personal finance, where a small number of expenses may account for the majority of a person’s spending. The idea behind the 80/20 rule is that by focusing on the most important 20% of the factors, we can achieve a disproportionate amount of the desired result.

See also: Decentralized Finance (DeFi), Non-Fungible Token (NFT), Decentralized Exchange (DEX).