Cryptocurrency

DYOR: Doing Your Own Research

Crypto has a lot of acronyms: HODL, BUIDL, and DYOR, amongst others.  While some of these acronyms developed from a silly internet misunderstanding that has since become a permanent fixture in a now-legitimate industry, others, like DYOR, are simply prudent advice.  The letters in DYOR stand for Do Your Own Research, and it’s an essential part of navigating crypto safely.  

Why DYOR?

Crypto is a new and burgeoning industry.  While some liken it to the Wild West (and they wouldn’t necessarily be wrong), it’s not so far off from other industries such as traditional investing or venture capitalism when it comes to smart decision making.  Just like you wouldn’t jump into a stock or project without knowing everything there is to know about it (or you shouldn’t, anyway), you don’t want to jump into a crypto project, product, or service without first getting an idea of what’s going on behind the scenes. 

It’s true that there are a lot of new offerings in the crypto space. That’s because the space is growing so rapidly alongside the tech behind crypto that is developing at lightning speed. It’s this extra pace, however, that makes doing your own research even more important, as it’s easy to miss information.  The good news, meanwhile, is that crypto offers a lot of opportunities to ordinary people that would normally be reserved for venture capitalists or institutional investors. It’s almost like the internet boom, but this time the playing field is open to everyone – with all its extra opportunities, as well as extra risks.  So, if you find a project that piques your interest, where can you get started doing your own research?

Start Where It’s Simplest: Google

Never underestimate the power of a Google search.  It may not be the most sophisticated tool, but if you’re starting from zero, you’ll gain a lot more knowledge from a simple search than you will any other way.  Meanwhile, you’d be surprised at the amount of people in any market who have invested in a product yet still can’t tell you what that product does. This is step one.  And just like if you were investing in Apple Computers or Amazon, you don’t necessarily need to be able to build the product yourself. You just need to have enough knowledge to understand the basics, such as what the company does, if the product seems useful, if they’re making progress, and so on.  You can fill out your knowledge base as you go, but initial questions to type into your search bar might go along the lines of: “What does X do?” “Who is in charge of X?” “Who is X working with?” You can find the company’s website and take a look at how professionally they come across. You can also check out who is behind the company – is it someone you’ve never heard of (which doesn’t have to be bad, but might be a consideration), or is it someone with a track record of building legitimate projects?  Likewise, have they been in their field a long time, regardless of acclaim, or did they show up just now to make a quick buck? Founders with track records are more likely to know what they’re in for – as any project in development is going to hit bumps along the way – as well as have the skills and expertise necessary to guide the project through. You can also take a look at the progress the company is making. Often there will be a “roadmap” of goals that will show if they’re moving along or not so much.  Again, while delays don’t have to be a red flag, they can be a sign of internal strife or things that aren’t functioning as they should.

A site or a search will also list the partners of the company or project. This is a great indicator as great companies tend to attract great partners, and big players don’t put money into things they expect to fail. Sure, sometimes venture funds will throw money around at several projects to see what sticks. But generally, genuine partnerships with solid companies are evidence that the project has gotten something right.  Lastly, the “news” feature of a search will give you some good insights. Clicking on the tab that gives you the latest will reveal both good news and bad – partnerships, for example, but also scandals, rumors or other things you might want to be aware of. Simultaneously, if there’s no news (or only fluff news, about trading signals and whatnot), it could be a sign that there’s not much progress going on. So, as an overview, when looking to Google (or your preferred search engine) for answers, here are a few places to start:

  • What does the company or project do?
  • What is their latest news?
  • What partnerships do they have?
  • What does their roadmap look like, and what have they accomplished to date?
  • Who’s behind the project, and what are their backgrounds?

Insight Source Number Two: Social Media

In this day and age, those same founders and teams we just discussed will most often have a presence, sometimes even a significant one, on social media (especially in tech).  It says a lot about a team who connects with their investors, is available to answer questions, and is professional online. You can gain a lot of insights about how things are going, as well as the type of person leading them, by taking a look at the company and team’s social channels.  Many CEOs, developers, and team leaders are on Twitter. Others are on popular apps like Discord or Telegram. This is where a lot of the tech talk takes place, and many founders will even do regular “AMA” – short for “ask me anything” – videos or chats with anyone who wants to join.

Teams with burgeoning, active, and professional communities are often a sign of healthy projects.  Accounts with little to no followers might be a sign (like lack of news) that they’re not actually accomplishing what they say they are. Good projects attract people, as a general rule of thumb, and products with use cases will have users interacting with them. This is also a place you can get feedback from people who might have experience or other insights into the projects – either positive or negative, both of which you’ll want to consider if thinking of investing or using their product.  While some community members can be a little too exuberant on social media, often the founders’ attitudes will be a factor in whether that behavior is generally supportive and informative, or antiproductive. That said, take a look at what resources are also available through the team’s accounts. Teams that want their investors to be up to date and informed will often have a list of resources – such as blogs, other social channels, or upcoming events – where investors can stay informed about the project.  Twitter, in particular, also offers one additional useful tool: the ability to search a company or project by hashtag or ticker symbol. Just like the news feature in Google search, this will bring up everything related to the company you want to research, from people to comments and more.  

There are many, many ways to DYOR.  The above are a few of the most basic places to investigate, particularly if you are considering an investment in a project, or even if you’re thinking of using a company’s product or service.  Gaining knowledge about what a strong company looks like versus one that may seem more evasive will also give you a greater sense of what to look out for in the future, and can protect you as an investor or user.  Crypto is a new technological revolution – and with that comes all the opportunities as well as risks. Doing your own research can help you to navigate this new and exciting field more safely in the myriad of projects constantly popping up.  While many crypto acronyms – while somewhat comical at times – are, in fact, backed by some genuinely wise sentiment, DYOR is likely the most important of all.  

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