DYOR: How to ‘Do Your Own Research’ Before Investing in Crypto Projects

The golden rule of cryptocurrency is Do Your Own Research, or DYOR. It is the most repeated and revered expression in cryptocurrency. Over time you will definitely find some favorite Twitter or youtube personalities. While finding someone who seems genuine and unbiased in their opinion is great, know that getting your info from one source is still going to backfire.

  • The platform provides market information on nearly all the crypto assets available.
  • It is another acronym of the investment industry which describes investors’ rush to buy.
  • It is by following the news articles and recent updates on that particular crypto project.
  • It will also be useful in double-checking the validity of important data.
  • Investors in cryptocurrencies love to talk about making money to the moon, but, in reality, making large gains is rare, unpredictable, and best left to gamblers.

Whether you spend time drawing triangles on charts or reading a team’s tokenomics report, the end result is all the same – you are analyzing a project’s potential. The term is also often used as a disclaimer when cryptocurrency traders and enthusiasts make public posts or share their market analyses on social media platforms. The statements made in this article are for educational purposes only and should not be considered financial advice or an investment recommendation. DYOR is there to remind everyone that investments are only as good as the research that goes into them — and even then, there is no guarantee of success.

Research the Project’s Source of Funds

Next, complete checkout to get full access to all premium content. Someone probably already asked on Discord or Telegram, and an answer can usually be found by taking advantage of the search bar to scan past conversations. Users can find a way to get in touch with core contributors working on the project and ask them questions about anything they’re unsure of while doing their research. It stands for Do Your Own Research and is a kind of a mantra in crypto, as well as when it comes to information in general. It emphasises the importance of developing a critical sense and not taking information for granted that you obtained from a singular or out of context source.

When Bitcoin finally emerged from the shadows of the Mt. Gox Bitcoin Exchange hack and subsequent cryptocurrency market crash, interest in the nascent digital asset started rising. Reddit forums, BitcoinTalk, Discord and Twitter started seeing plenty of new faces discussing Bitcoin, Ethereum, and Ripple. Before DYOR in crypto, there is some prerequisite knowledge that you need, or else you will get tangled up among numerous sources advising investing tactics and predicting the crypto market.

Which Crypto to Buy Now? How To Do Your Own Research (DYOR)

The founders of these projects were arrested for running a Ponzi scheme, in which they fraudulently claimed investor funds would be used to run a crypto mining operation with daily returns. Victims bought in using “cash, checks, wire transfers, and actual cryptocurrency” and saw their supposed profits on an online portal. In addition to the technology behind the coin, it’s also important to consider the adoption and use cases of the cryptocurrency.

how to dyor in crypto

How many people are transacting using a coin or a token and how many more users have it gained in the past week? For projects with special utilities, it gives a hint of how many people are adopting the technology being propagated by the project. For blockchain-based payment solutions like bitcoin, it shows how many people are transacting with the decentralized electronic currency. Market capitalization shows a cryptocurrency’s total value at a point in time. It is calculated by multiplying the current price per token and the circulating supply.

Research the coin

It’s unclear how governments will treat decentralised stablecoins. One advantage of Terra is that it supports stablecoins for multiple currencies. Whitepaper – A clear vision they want to become a leading medium-of-exchange in online payments, https://xcritical.com/blog/how-to-do-your-own-research-dyor-before-investing-in-crypto/ allowing people to transact freely at a fraction of the fees charged by other payment methods. Now that we’ve run through the process of identifying which crypto to buy, let’s run through a quick example so you can see it in action.

how to dyor in crypto

Number of users – The amount of actual people that are using the network. Volume 24hr – The total dollar volume of the cryptocurrency transacted in the past 24 hours. While a project doesn’t need to be perfect in every respect, the stronger it is overall, then the higher the chances it will prove a lucrative long-term investment.

Learn How to Learn

Create your own indicator using Pine script or stare at a cryptocurrency’s chart until you find a meaningful connection. GameFi, etc.) to understand the market in which you might be investing. When you DYOR and find a project that’s received this sort of funding, it’s generally not a bad idea to further research the project—along with its native cryptocurrency. Angela loves cryptocurrency, technology that improves our lives…and food. So, not only can users DYOR with these tools, the developer community can also take advantage of the extreme DeFi composability of Solana through Hello Moon’s SDK . This article intends to help bridge the gap in knowledge for DeFi beginners on how to DYOR.

But, it is not always easy to spot the fake accounts, so it is important to remain skeptical and do your own research. In the crypto space, founding teams often stem from the same company, startup, or college. Many crypto projects are under development at the time of investing in the underlying cryptocurrency. For that reason, it’s crucial that you research crypto founders’ professional and educational history.

Fundamental Analysis in Crypto Vs. TradFi

Some of the most notable Polkadot projects are already parachains on Kusama or gearing up to become one, and most of them may also bid for Polkadot parachain slots when live. Besides their community, projects that are serious about building on Polkadot usually engage with the broader Polkadot community. They are active in the various Polkadot and Kusama channels, https://xcritical.com/ and some of them are Polkadot Ambassadors, or generally prominent members of the ecosystem. If it comes up empty, or the only results are regarding the project you are researching, it is an indication that their team members are potentially fake. Their photos on their site, if there are any, may also be stock photos, or in other words, also fake.

Read as Much Primary Source Material as Possible

If you’re new to the crypto space and trading, ‘DYOR’ may be the most important phrase to know while you get started in this volatile world. There’s simply no substitute for careful due diligence and smart risk management as you navigate your first positions. The crypto world offers excellent opportunities to earn money — if you play your cards right. However, crypto scams take advantage of this by promising quick riches. Of course, their promises are entirely fake, designed to draw people in.

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