What is DYOR? A guide to doing your own research

In 2023, the cryptocurrency market saw a dramatic upturn in institutional players, indicating a major change in market conditions. DYOR stands for “Do Your Own Research.” In the crypto world, this mantra emphasizes the importance of personal diligence before making investment decisions. In this guide, we’ll break down what DYOR in cryptocurrency means, why it’s crucial, and how to get started with your own research. For example, work tokens (e.g. Livepeer’s Initial exchange offering LPT token) are fundamentally different to utility tokens (e.g. the Brave browser’s Basic Attention Token (BAT)). And these are fundamentally different to cryptocurrencies (e.g. the Bitcoin network’s bitcoin (BTC)).

Mistakes to avoid when doing DYOR

Or are most community members only talking what is dyor in crypto about token price, perhaps as paid shillers (token promoters)? Online criminals use hype and fear of missing out (FOMO) to their advantage. They create a sense of urgency — a fleeting opportunity — and a now-or-never situation. Unaware of the danger, the newcomer to the industry gets drawn into the hype. They heard the stories of volatility and the importance of seizing the opportunity before it slips. They forget about caution, risk assessment, and making informed decisions.

• Skimming through the community’s comments can also reveal a lot about a project.
• Always seek out a roadmap and assess it against what has been delivered thus far.
• For instance, gold’s scarcity, steady flow, and global acceptance make it a stable store of value compared to cryptocurrencies, which often lose value.
• It’s about understanding the asset’s long-term potential and how it fits into an overall investment strategy.

Why is Cryptocurrency Due Diligence Important?

They understood that this feature set Ethereum apart from Bitcoin and other cryptocurrencies and had the potential to drive widespread adoption. Their research and understanding of Ethereum’s unique features led them to invest early, resulting in significant returns as Ethereum grew to become one of the largest cryptocurrencies by market cap. Many insights may be gained from market capitalization, circulating supply, asset price, daily active users, token holder distribution, total supply, https://www.xcritical.com/ and 24-hour trading volume.

Let’s recap the four dimensions of DYOR that we have discussed:

Unlike the traditional economy, the blockchain is completely open and transparent. For DeFi projects, TVL (total locked-in value) is the most important metric. Other indicators such as the number of active addresses, exchange balance, and network value to transaction (NVT) are also useful metrics.

Awesome Oscillator Trade Indicator In Cryptocurrency

These individuals recognized the potential of Bitcoin’s revolutionary blockchain technology and decentralized nature at a time when it was largely unknown and unproven. They read the Bitcoin whitepaper, understood its use case, and believed in its potential to disrupt traditional financial systems. Their research and belief in the technology paid off handsomely as Bitcoin’s value skyrocketed in the following years. Coinmarketcap and Coingecko provide comprehensive data on thousands of cryptocurrencies. You can find information about a coin’s price, market cap, trading volume, circulating supply, and more. They also provide links to a coin’s official website and social media channels, where you can find more detailed information.

The crypto market is constantly changing, and it’s important to stay updated on the latest news and developments. Regularly review your investments and stay informed about changes in the market. DYOR is a practical approach to investing that involves verifying information on your own and making informed decisions based on trusted data. To make informed decisions, it’s crucial to Do Your Own Research (DYOR), a common phrase in the crypto community. Any digital asset on the Cryptocurrency markets is heavily reliant on volatility, liquidity and overall market sentiment. In addition, these early stage investors often guide and advise the founders.

This indicated a commitment to decentralization and fairness, which further increased their confidence in the project. For example, when buying a new gadget, reading multiple reviews, checking user feedback, and comparing product specifications can prevent buyer’s remorse. Similarly, in an era of misinformation, cross-referencing news from different sources ensures a more accurate understanding of current events. And finally, every white paper should present a road map indicating how the founders aim to develop the project in future.

Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation. Check the overall market sentiment towards the cryptocurrency by looking at forums, social media, and other sources of information.

There are people ready to exploit those who are not well-prepared which is why understanding beyond the basics of the crypto world is vital to navigating its challenges and opportunities. Investors who conducted thorough research into Kaspa’s technology, use case, and team saw the potential of this innovative platform. They also recognized the potential of Kaspa’s efficient proof-of-work consensus mechanism and its security features. Cointree is a registered digital currency exchange with AUSTRAC (the Australian Government regulatory and monitoring body for AML/CTF) and a partner of Blockchain Australia.

The term DYOR is used in many fields, but it can be even more important in crypto investing than in the traditional financial market. The process involves scrutinizing various facets of a project, from its team and strategic partnerships to its tokenomics and value proposition. It’s just as important to assess the project’s technology, scalability, community involvement, and possible competition. To wrap it up, DYOR isn’t just an empty phrase slapped at the end of every crypto-related post; it’s necessary. While crypto is full of potential rewards, the risks are just as many, and being able to navigate this space confidently comes from in-depth understanding. Furthermore, keep an eye on projects constantly improving their technology and infrastructure to offer better services and those with the fewest glitches, downtimes, or exploitation incidents.

Technical analysis (TA), sometimes known as charting, forecasts future market behavior using historical price and volume information. While fundamental research tells you how much a cryptocurrency is worth, technical analysis shows you how to enter the market. Comparing and evaluating the price movements of the cryptocurrency you want to invest in is essential for knowing when to enter and quit the trade. You may perform technical analysis by examining cryptocurrency price charts, interpreting trends, indications, candlestick patterns, and more. All of these will help you assess whether the project has a bright, realistic future. Every crypto project, token or platform has a smart contract at its base.

It suggests that traders feel compelled to rush into opening a position for fear of missing out on a great opportunity. Scammers know that playing on investors’ feelings is the best way to achieve their goals. When excitement overwhelms you, you rarely think about the consequences. The phrase has now permeated into popular culture, and is widely used to encourage amateur investors in any arena to navigate a minefield of misinformation. Sometimes, the consequences of crypto FOMO can be worse and more profound than a loss of invested capital—it can lead to damaging situations such as disconnection from family, anxiety, and depression. Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator.

Life is a combination of ups and downs; coming to this realization gives an investor a logical perspective and better grounding. Understanding that one can’t always be in a profitable position in investing sets the tone for more wins and being able to handle occasional losses. Not even Bitcoin advocates like MicroStrategy co-founder Michael Saylor are always on the winning side of the crypto market. Crypto investors’ or traders’ best bet is to develop strategies that make it easy to spot FOMO.

When a person loses trading capital in a bad investment, especially a large amount, it might affect them mentally. In turn, this failure can be reflected in other aspects of their life, such as relationships, connections with family and friends, and more. The person can start experiencing social decline and gradually become dysfunctional if extra care isn’t taken. It’s important to notice how many of the original tokens were allocated to the founding members of the network.

Knowing that answer will indicate how much potential value could flow to the cryptocurrency, assuming the crypto project’s solution is better than what currently exists. The cryptocurrency market, like others in the financial world, moves in an up-and-down cycle, with bullish and bearish periods. The bull market comprises a series of price highs, and the bear market comes with lows and people losing money. Understanding this cycle will help reduce the risk of being driven by FOMO because you can recognize the right time to enter and exit a trade.