In a recent series of posts I looked into how to do relevant research about crypto-holdings in order to determine their place (rightfully or not) in a portfolio. While I am working on the analysis/presentation of these findings I wanted to share a few things I learned about the process of "Doing your own Research".
Before jumping into this article you're interested in reading the back story you can find them here:
- Hodl, Sell or Consolidate? | Part 1
- Hodl, Sell or Consolidate? | Part 2
- Hodl, Sell or Consolidate? | Part 3
- Hodl, Sell or Consolidate? | Part 4
Note: I realize I'm plugging these a lot but since the amount of time invested in them was quite high on my side I'm just keen they see some usage. You can also look over the back catalogue of my blog projects at Hobbyist Mining (GitHub).
More often than not, and rightly so, I've seen prominent bloggers on this platform sharing new crypto-concepts (as well as all the weird and wonderful world of DeFi projects out there) and adding "DYOR" , "Do Your Own Research" or something similar. As a reader we may gloss over this and automatically assume that the writer has done the research already for us (so we don't have to) or that it will be overly time consuming to do the research. This can lead us, self included, to making financial decision based on limited or partial information. I don't doubt the intentions of bloggers throughout are good, but it is extremely important to always consider relevant information when forming decision and try to fit them to your own circumstances. This is why it is critical to both consider the opinions of others and form your own at the same time.
A big part of doing your own research is often asking the right questions and going out into the magical internet land and finding the answers. Sometimes, though it can be hard to think of what information to check before you start looking. It is easy to find yourself down an proverbial rabbit hole trying to figure out how you ended up there. The goal of this post is to help provide a guided framework of relevant questions that can be helpful when researching a project, as well as suggestions of resources that can help provide you with the answers you're looking for.
If, as a result of reading this article, you have any suggested resources/questions that you think it is important to include then let me know in the comments. I am more than happy to update the post to include additional information, provided you're happy to share your knowledge with the rest of us.
I've labelled the questions below in a similar manner to the previously written articles. This was more for ease of writing and breaking up the post to give a nicer flow. It isn't expected that all of these questions will be relevant to all projects. Additionally, it is important to consider which of them may carry more or less weight than others when considering the projects' use case.
- 01 - Social Media - How active is the community online? Are people talking about the Project? Is it quality content?
- 02 - Search Trends - Are others researching the project and where/when is most of the activity?
- 03 - Industrial Rating - What does an independent review think of the technology on the project and adoption?
- 04 - Development - How active is the project team’s development?
- 05 - Global Messages - How engaged is the project team with the community and what is the content of the current messages?
- 06 - Road-map Achievements - What are the long-term goals of the project and have the team achieved (on target) previous goals?
- 07 - Market Cap/Price growth - What is the current market position of the project and in which direction does it seem to be moving?
- 08 - User base - Does the project have a core app and, if so, how many users/downloads do they have?
- 09 - Partnerships - With whom have the project team forged strategic partnerships and is this list growing?
- 10 - Investment Rating - How do experts assess the project from an investment standpoint, where are the strengths and weaknesses?
- 11 - Available Exchanges and Trading Volume - What is the trading volume like, what are the top trading pairs, are the listed exchanges recognizable and reputable?
- 12 - Associated costs/value - If there was an ICO how has it performed? Additionally, how do trading/swapping/withdrawal costs look?
- 13 - Chain analysis and Bitcoin Correlation - How active is the network and how correlated is the project with Bitcoin?
- 14 - Historic price Action/ Trends/ Indicators - What is the recent market sentiment, and potentially market direction, like?
- 15 - Current Holdings - Do you already hold some of these coins/tokens, how does it look relative to your total holdings?
- 16 - Active Earnings - Are there currently any ways that you could earn more on your investment for this coin (out with trading)?
- 17 - Usage - Are you currently actively, or do you plan, using the coin/token for their purpose? Or is it just speculative?
- 18 - Personal Opinions - Based on the response to all the previous questions what is your opinion about the project?
Additional Reader Suggested Questions:
- 19 - Project Team - Who makes up the project team, what are their roles/background and is it well rounded?
- 20 - Customer Facing - How well made is the customer user interface (i.e. application, website, devices etc…), is there attention to detail?
Where to get Answers
One of the most important things I've learned over the years is not so much knowing all the answers but more knowing how to find them. I've listed below some of the key resources (with BTC example links) that I've found to be useful in answering the above questions. Additionally, I've listed the relevant questions to which the resources are most applicable.
- CoinGecko (01, 04, 05, 07, 11 14):
- Social Media Channels (01):
- Facebook (whatever that is)
- Google Trends (02):
- Weiss Crypto Ratings (03, 10, 14):
- Token Insight (03, 07, 19):
- Project Specific (05, 06, 09, 19, 20):
- Press Releases
- News and Blogs (06, 09, 14):
- FX Street
- Any other news outlet
- Trading View (07, 14):
- AppTrace (08):
- InToTheBlock (11, 12, 13, 14):
- ICODrops (12):
- Coin Market Calendar (14):
- Interest earning/Staking (16):
- CeFi: Key Facts
- Wallet Reviews
- DeFi suggestions
- You (15, 17, 18)
As you can see from above there are quite a few places to go looking for answers. If I had to pick my top three of these it would be CoinGecko, Weiss Crypto Ratings and InToTheBlock. Starting by looking at these can give you a really nice overview of the state of a project before you do further digging. If there is little/no information for a project on any of these I'd consider it high risk for the purposes of investment.
- Check multiple sources
- Read bad reviews as well as good
- Challenge your gut/opinions
- Consume as much information as you can
- If it gets too technical look for videos, diagrams and simple summaries
As a general exercise I recommend picking a project you're already interested in and going through this process. See where you end up and what conclusions you can draw from researching, maybe even write up a post with your findings. Let me know if you do and if you link in this one, it would be great to see these ideas in action, I'll also send a few BAN/tips your way to say thanks.
Hope you find this resource useful and enjoyed reading. Good luck y'all!