What is DYOR? How to Perform Effective DYOR?

What is DYOR?

DYOR, which stands for “Do Your Own Research,” is a popular slogan in the cryptocurrency community. It advises readers to thoroughly investigate and understand an issue before making any investment decisions or taking any actions.

This term is often placed at the beginning or end of articles as a disclaimer from the author, indicating that they are not responsible for any consequences the reader might face based on the shared information. This is especially important in the unpredictable and risky field of crypto.

Why is DYOR Important?

The crypto market today is flooded with projects promoted by shillers and influencers (KOLs) constantly advertising products on social media platforms. In this information-saturated environment, you shouldn’t completely trust anyone but rather rely on your own judgment.

Therefore, DYOR is crucial to gain a comprehensive and accurate understanding of projects and information, rather than solely depending on someone else’s perspective before making investment decisions. Carefully examine and evaluate all aspects yourself to make informed choices.

Related: What is Holding Coins? How to Optimize Profits When Holding Coins

Basic Steps to Perform DYOR

Analyzing Social Media Channels

This is the first and easiest step when evaluating a project, helping you check whether the project is still active and how it interacts with the community.

Cryptocurrency projects often use Twitter, Telegram and Discord. Focus on these three channels as they are the most popular in the crypto world.

On Twitter, check:

• Followers: See if exchange CEOs and well-known KOLs are following the project.
• Number and Content of Tweets: If a project was founded in 2021 but has only posted a few dozen tweets by 2024, ask yourself, “Why so few? What have they been doing?” Check if they frequently update the roadmap and achievements, and the community’s engagement level.

On Telegram and Discord:

• Participation and Interaction: Check the interaction and conversation levels in the group, not just the number of members.

Note that this analysis is only suitable for projects that have been active for at least six months. For new projects, the analysis is often only for reference.

Fundamental Analysis

This step is very important in DYOR as it helps you understand more than half of the overall picture of the project, whether it is new or long-established.

1. White Paper:

• The most important document of the project, providing information about the development process, opportunities, and utilities. If there is no White Paper, the project could be a scam or unreliable.

2. Development Team:

• Consider the team’s size and identity. Are the members publicly identifiable and experienced in relevant fields? Check their information on LinkedIn and Twitter.

3. Roadmap and Vision:

• What problems is the project solving? Does it have a competitive advantage? Is their technology outdated? Check if the project follows its committed timeline. Not adhering to the schedule can be a warning sign.

4. Tokenomics:

• Total supply, token allocation, deflationary plans, and token utility. Check the trading volume and liquidity to assess participation levels and ease of buying and selling the token.

5. Audit Reports:

• See if the project has been audited by reputable third parties like Certik, Hacken, or Quantstamp. Audits help identify potential security vulnerabilities but do not guarantee absolute safety.

6. Reputable Investors / Backers:

• Large funds and well-known investment companies often invest in potential projects. This is a factor to evaluate the project’s future.

On-Chain Analysis

On-chain analysis is very diverse, but pay attention to the following key information:

1. Total Value Locked (TVL):

• High TVL indicates the project is being used by many investors and has growth potential.

2. Number of Active Wallet Addresses:

• A high number of active wallets indicates many investors are trading or holding tokens.

3. Developer and Investor Wallets:

• Check if the project has dumped tokens on the market before.

Use tools like Coinmarketcap, Coingecko, Github, DeFiLlama, and Dextools to find additional information.

Technical Analysis

Technical analysis helps predict short- and long-term price movements of tokens, determining when to buy and sell. Mastering chart analysis is crucial, and following expert analysts can help fill in knowledge gaps.

Conclusion

The cryptocurrency market offers exciting profit opportunities but also contains sophisticated scams aiming to take your assets. Therefore, equipping yourself with solid knowledge and conducting serious independent research (DYOR) is crucial to avoid unnecessary risks. Always remember, before making any final decisions, ensure you have carefully considered and evaluated all relevant information. This is the key to success in this challenging but highly attractive market.

Through the article “What is DYOR? How to Perform Effective DYOR” have you learned about DYOR? If you have any questions, please leave a comment below to get immediate answers!