DYOR in cryptocurrency is a common term used by professionals and sometimes used with NFA which means Not a Financial Advice.
DYOR on its own is an acronym for Do Your Own Research.
How can I do my own research?
All decisions in the cryptocurrency are as a result of your own choices and whether good or bad, you will be the one to face the consequences of your decision.
Why do I need to do my own research?
Currently there are over 10,000 cryptocurrency in existence, does that mean they are all valid cryptocurrency?
In cryptocurrency, there are other terms used to describe some project. These terms include but are not limited to the following.
This is used to describe a push by people holding a particular coin or token. These people will be talking so good about the coin but it is with a motive.
Their motive is to get enough buyers who will push the price of the coin higher and give the early adopters a chance to be in profit and dump the coin.
- Sybil attacks
This is another false project. It is a replica of an existing project that is doing good.
Such a project will be advertised like a good project but it is being controlled by another team so as to extort the general public.
It is very difficult to detect this kind of project because they will have almost everything in common.
- Rug pull
This is common to defi projects.
Team working on these projects will create a compelling offer for the public but rather than creating a long lasting project, the team will pull out.
Sometimes, they will sell their own shares or remove liquidity and leave the public in a dip with valueless coins.
DYOR in cryptocurrency can be done using fundamental or technical but the sentimental might be confusing.
Three things to check when doing your own research
In general, below are what to look at when you are doing your own research.
What is the new product that the team is introducing?
Are they offering new service or not?
What problem are they solving with their product or services?
Is there a product and services in crypto?
Litecoin is the recognized cryptocurrency after bitcoin but Ethereum is the second most valuable cryptocurrency in terms of market cap.
Ethereum is also the only cryptocurrency that made the top 100 world assets and has been climbing the list.
Just recently, Ethereum is now among the top 20 world asset.
Litecoin has no specific problem they are solving except fast transactions while Ethereum entered the market with a new development (smart contract).
What product/service is the project solving?
Also, don’t confuse projects with cryptocurrency.
A project can be built on blockchain with its own cryptocurrency.
- A community
Who are those that are interested in the community?
Who are the people that bought the coin or project at launch?
When you check the number of people holding the coin, do they have a larger percentage being held by a minority or a single person at times.
If a coin’s total supply is 10billion and their circulating supply is 10million but out of the circulating supply, a single wallet is holding more than 50% i.e. 5million aside the contract wallet.
Such a project needs to be reconsidered before any investment.
This is important and if all other parts have been verified but the team did not have a good track record, you should reconsider.
Search for the team members name and include scam or fraud on Google and see if there will be a case of scam or fraud.
Dig deep into their personal profile, check the project that they’ve worked on.
Check the projects they’ve advertised or encourage the public to buy.
For instance, Nakamoto Satoshi, the brain behind bitcoin, is having 1million btc that he mined between 2009 and 2010.
Till date, blockchain programmer discovered that no single bitcoin was sold or moved out of his wallet till date.
On the other hand, the founder of litecoin sold all his litecoin during the 2017 bull run.
Most importantly, be fearful of projects that use influencers to market their projects, it is usually a bait.
After doing all this and you are confused enough then you have DYOR in cryptocurrency, you can then invest but with an amount you can afford to lose.
This does not apply to cryptocurrency but it can be used for any projects.
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NB: This post is mainly for educational purpose and all the examples should not be taken as financial advice.