Hello everyone,

I hope you all are having a nice weekend, welcome to CryptoGod-1's blog on all things Crypto. In this post I will be looking at one of the most important phrases when dealing with Cryptocurrencies - Do Your Own Research. This is a phrase many people will have encounter, possibly in its DYOR form, but it is often easier said than done. Below I will outline a few strategies and methods for anybody looking to DYOR, along with some useful resources which hopefully will be helpful and are applicable in most areas of the Crypto World and in general beyond.

What is DYOR?

One of the most important aspects of trading cryptocurrencies, DYOR stands for Do Your Own Research. This is common terminology which is often brandished by long term and new investors. Across social media DYOR is almost gospel for every post which often gets accompanied by "This is not financial advice." The term DYOR appeared around the 2016-2018 wave of new crypto initial coin offering (ICO) projects entering the market. A lot of these projects ended up being scams and because of that a lot of investors lost funds.

Why is it important?

Due to so many scam projects, or "rug pulls," investors developed the terminology to help combat fraud. By throwing this terminology around, people were reminded that they need to ‘DYOR’ and investigate any potential investment as much as they possibly could before they committed any of their own money into a project. The phrase has become deepest into popular culture and is often used as an encouragement to any new investors who are entering the market of the potential mishaps and misinformation ahead. 

As part of the craze of celebrities and "experts" shilling coins, often they will promote ones which they are invested in, or have been remunerated to promote. This is done in hope of increasing the value of the coin by having multiple investors entering the market for that coin. These promoters can often create multiple accounts on social media platforms such as Reddit, Twitter, Instagram, Facebook, etc, to like or add positive comments to the original post. This is done to give traction and lure unsuspecting investors into believing the wider community is supporting this coin. This is known as a Sybil attack, and makes it very important for all investors to take advice with a grain of salt and ensure they Do Their Own Research.

DYOR is therefore a reminder to all of us involved, experienced or new, to take charge of our own knowledge. While there are plenty of insightful and trustworthy resources available to develop and learn from, everyone must evaluate and compare everything on their own basis while ensuring any final decisions are made by themselves.

It takes time to build up a strong and informed knowledge so take time putting in the research and remember - there is always some form of risk involved.

Key Steps of DYOR

Step 1:

The first thing anybody should embark upon when researching a crypto project is researching said coin/token on Coingeko or Coinmarketcap. If a token is of any worth it will be featured on this site, providing information about the projects utility, its price action, market cap, and trading volume. The official links to the coin/tokens contract address and its official website can also be found on these sites. These are great sites for looking at the historical stats and data of projects.

Step 2:

Getting analysis of the total value locked (TVL) of a project is a key step when looking at DeFi projects. TVL refers to the total amount locked within the smart contract of the platform, normally showcased in the form of debt collateral or from liquidity pool funds. It is a vital measure of a DeFi project’s performance and analytics. It will help to give a legitimate rating for the project you are interested in, along with @TokenSniffer on Twitter where they analyse all relevant on chain data to complete an overall audit score of the token/coin's legitimacy.

Step 3:

Staying on top of a projects roadmap and upcoming events is vital for understand the potential of long term growth and success. Seeing as there are so many projects and tokens/coins available, it can be cumbersome to try keep track of them all. CoinMarketCal does this for you, as it is a calendar which upcoming events at blockchain projects. Whether these be burns, forks, governance voting, Telegram channel AMA (Ask Me Anything) sessions, this site will help to analyse the future path of the project. 

Step 4:

Checking out the team and developers behind the project is another important step, as in the crypto space, founding teams often stem from the same company, start-up, or college. When investing in a project, usually it happens while the projects are still in the development stage. For that reason, it becomes vital that you research and look in the story behind the project along with the professional and educational history of the creators. The projects Whitepaper can also give you a strong foundation on the core beliefs of what the projects and its development team stand for.

Step 5:

Looking into the sources of funding behind the project is another vital aspect when doing your research. Discovering whether a project raised its own venture capital or used private equity can lead you down a route of discovering which investing firms have put money into the project. Reputble, experienced investors are a good sign, if they are backing it with their money they have good hopes for it, although not all investors make good decisions. Partnerships with other companies, firms, projects, etc, can help to show the project is gaining pace and traction, whether it be with crypto or non-crypto based partnerships. Just ensure to research the partnership announcement on both side of said arrangement, as if a project claims to be linked with a world-leading corporation it needs to be verified, along with the terms of the partnership.

Step 6:

Social Media. There are many available sources of info on the social media platforms, from the twitter and Facebook pages of projects themselves, to the subreddit Cryptocurrency. Whether you are looking for info straight from the developers, or interested in gaining a sense of what the community in general is feeling about a project, social media can be a great resource. The developers/project pages can show how well they are interacting with the community, how long they have been around, and whether they have garnered a decent following or not. As for the Reddit group, this is the number one place to go to find out the general sense amongst the wider crypto space towards certain projects. Just don't take everything you read at face value as not everyone has good intentions when posting.

Step 7:

Finding out the blockchain technology use of the product is vital in understand what type of coin or token it is. These days tokens/coins come in all shapes and sizes, each determined to make its own place in the space and assign itself as a work or utility token. Its important to understand the real world application of the token/coin, while also getting an understand of its allocation, vesting periods and vesting dates. These will play a key role in understand when the market may become flooded with additional coins/tokens, while also help a potential investor to see the long term growth of a project.

Step 8:

Google trends is an analytical took from google which shows the popularity index and trend over time for any given word, phrase, or searched item. Token and coin names are included in this, which can help to show the popularity of your potential investment in the public space. Users can even narrow the search results to specific locations and time, which being able to compare two or more search terms at the same time. One drawback is that less popular or established coins/tokens may not have garnered enough search volume, meaning any results will be unreliable. This tool is best suited for more established projects.

Step 9:

Gut feeling. This one has nothing to do with analysis or research. It is merely a question one should ask themselves after doing as much groundwork and research as possible. Do you believe in the project after finding out as much as possible about it? If so do you see it only for short term gains or more of a long term hold? Its important to ask yourself these questions before investing, as you can plan a point or price to buy and/or to sell at, and not end up holding bags for the long term.

Useful Resources for DYOR

Below is a list of some useful resources for DYOR, many of which were mentioned in the steps above. They vary from social media groups, analytical platforms, trading info, and general statistics for the particular tokens or coins you are looking to invest in. Making use of some or all of these tools can greatly enhance your ability to complete good research prior to investing.

• Coin Gecko
• Coin Market Cap
• The Coin Perspective
• @Token_Sniffer on Twitter
• Lunar Crush
• Project Website
• Defi Pulse
• Coin Market Cal
• Trading View
• Investopedia
• CryptoCurrency on Reddit
• Google Trends
• Cryptomiso

Conclusion

When doing your own research you will realise that it is one of if not the most important parts of investing. Whether you are an experienced trader or new to the game, it is always vital to make sure you understand what you're investing in. Otherwise you might as well just be throwing your money in the trash. Always make sure you don't believe everything you hear and read, stick to trusted methods of DYOR, never invest in something before you know what you're getting into. Finally, DYOR is an ongoing process. Do not expect to be an expert because you read an article or two, instead understand that as time goes by the more time you invest in DYOR the better you will become at it, leading you to be in a prime position for spotting the next project worth investing in. While the steps mentioned above are not an exhaustive list or need to be followed in that particular order, they are merely an idea of what an investor should undertake before investing.

Thanks very much for reading and I hope you enjoyed the article.

Have a great day.

Peace. CryptoGod-1.

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