How to do your own research (DYOR) on cryptocurrencies?

There are no commandments or hard and fast rules in the cryptocurrency industry. However, one school of thought advocated by investors is that everyone can and should succeed depending on their independent investigation.

In the perfect universe, you would have a simple guide that explains how each industry operates and how newcomers might get involved. However, since we are far from an ideal world, users are highly encouraged to Do Your Own Research (DYOR).

DYOR is a timeless philosophy. Useful in every conceivable context. However, DYOR has no alternative in a highly inventive and potentially disruptive industry like cryptocurrency.

What is DYOR?

DYOR is short for Do Your Own Research, a powerful acronym that motivates newcomers to research on their own and not always rely on others. More precisely, DYOR is promoted by the community to prevent new investors who hunt for suitable investments from falling into the trap of being shilled by existing investors who want to pump their bags.

How to do your own research?

Unsurprisingly, some individuals are taking advantage of others in the crypto trading industry because it's a competitive market, and the end goal is to make money. The solution? DYOR.

There are various approaches to doing your own research. Let's look at the basics of doing your research correctly.

1.Master the Art of Learning

You might find it surprising that many people lack the skills necessary for effective learning. As a result of their inability to go beyond the surface of a topic, they end up not understanding anything beyond the superficial level.

Do you identify as one of those people? In that instance, knowing what a blockchain is or what sort of information crypto transactions hold is not as crucial as learning how to learn.

Return to the basics. Develop a plan for navigating the decentralized world and stick to it. Avoid reading snarky Twitter threads that include half-truths, and concentrate on the fundamentals instead.

2.Find Investment Opportunities

A major part of DYOR is spent determining whether projects are ready for investment. After all, there's only so far one can get by debating the merits of different block sizes. The point of trading in cryptocurrencies is to acquire assets, not to have theoretical discussions about them.

That's why it's essential to get cozy in your study chair and devote numerous hours to gathering information and research projects.

Make a list of the projects that most interest you first. The next step is to examine multiple elements of each project, including its website, team, smart contracts, marketing approach, and so on. Everything a person would normally undertake while performing basic analysis should be done.

Deconstruct Projects

Now that we've reached the stage where we're discussing analyzing potential investments, it's time to spell out the significance of analysis.

Anything that deepens your understanding of a topic might be considered an analysis. It doesn't matter if you spend your time drawing triangles on charts or going through a team's tokenomics report; either way, you're doing the same thing: assessing the viability of a project.

Different types of analysis exist, so focus on mastering the one that works best for you.

Technical Analysis (TA)

Analysis, as we've said before, is the key to success in crypto. Indeed, it is the case for day traders in every manner. Everything you need to do to succeed with technical analysis is to stare at charts, search for candle patterns, check up on indicators, and test out new trading strategies.

Obviously, relying on your own judgment is crucial in this context. Every day is an opportunity to improve your skills and knowledge, and with enough practice, you may become an experienced trader

Fundamental Analysis (FA)

To ascertain an asset's true market value, FA is a useful evaluation method. Common methods for doing so include looking through elements like whitepapers, roadmaps, developments, marketing plans, project development teams, tokenomics, network activity, etc.

In some circumstances, FA also includes monitoring market data like volume, circulating supply, token emissions, team token distributions, and so on.

Through the use of fundamental analysis, users may determine if a project is undervalued or overvalued and how it compares to similar initiatives. As a result of the time and effort involved in the process, investors can only rely on DYOR.

How to do crypto research?

1.Check project website

The official website link brings you to the cryptocurrency's official page and blockchain project, if any. You can learn a lot about the project, its developers, its aims, and how it is being used if you check out its website. If the official website's link is not working, the site is unfinished, contains mistakes, lacks a blog section to keep investors up to date, etc., it's safe to assume the creators are not committed to the project, and your money would be better spent elsewhere. Furthermore, you should evaluate the project team's academic credentials and professional experience. Many potential backers are wary of projects that inexperienced developers have created.

2.Performing thorough research on project founders

The creators of a cryptocurrency should be thoroughly researched before any investment is made. The majority of the currently popular currencies were created by people with prior expertise in the cryptocurrency sector. There are a lot of people that make coins for no reason other than to fool other people into investing in them. However, some startups have founders with decades of relevant expertise. As an illustration, before creating Cardano, the creator of the cryptocurrency, Charles Hoskinson, had extensive expertise in the field of cryptocurrency development. Charles was an early contributor to Ethereum before he invented Cardano.

3.Monitor social media presence

High levels of community engagement on social media platforms like Facebook, Twitter, Instagram, etc., are indicative of a high-quality cryptocurrency. The success of a cryptocurrency depends on its loyal supporters, who promote its continued development by sharing news and updates.

4.Check for project Transparency

Verify project transparency. The degree of transparency is measured by the amount of data made available to the general public. Is it possible to have access to the information or speak with someone who is working on establishing a community for the project? Evaluate the project's backers and any collaborations they've established. The presence of well-known people on a project's advisory board often indicates its legitimacy and widespread support.

You may get some very useful statistics on the project's blockchain by clicking on the Block Explorer link. Information on the hash rate, price, block height, transactions, and many more metrics are all available there. Every investor prefers to put their money into an asset with high liquidity, and this provides users with a good sense of how active the network is.

Why is DYOR important?

To Avoid Shilling

Social media posts that promote or endorse cryptocurrencies often have an ulterior financial motive. There is little indication that the advertiser cares whether or not the currency really has any value or utility. The individual is merely promoting the currency for his personal gain, and we, as crypto investors, may fall for such manipulations and invest in the coin.

Sybil attacks

To gain control of the blockchain, attackers generate several fake identities on a single node. In the eyes of the general public, these multiple identities may appear to be a single entity.

Conclusion

Doing your own research may be both time-consuming and rewarding. Investing in cryptocurrency is a serious business. You should always be curious about new things to keep expanding your knowledge. The best way is to start with a simple Google search for the project's basic information before delving into YouTube and other websites.

Remember to have your inquiries answered and your doubts resolved. There is no such thing as a dumb or irrational question, especially when investing money. Before investing, monitor the price charts and perform technical analysis based on your research.

Disclaimer: Cryptocurrencies are highly volatile and subject to market, technical, and regulatory risks. Crypto trading requires one’s own diligence, and Cryptoforce will not be responsible for any losses incurred. Any information provided here should not be regarded as Cryptoforce’s technical or financial advice.