This involves looking at price charts, trading volumes, and other market indicators. It’s also important to understand the concept of market cycles, as the crypto market tends to move in cycles of booms and busts. This is closely related to fundamental analysis (FA), a term used within the financial world to determine an asset or business’ intrinsic value. Do your own research, or DYOR, as popularized by crypto enthusiasts, is a common phrase used in crypto investing and trading. The idea behind this term is to reduce the number of uninformed investors by encouraging users not to follow the word of others blindly. Any new projects or areas of interest should be subject to a significant amount of research before being considered for investment.
Asset price, market capitalization, circulating supply, total supply, daily active users, token holder distribution, and 24-hour trading volume can all provide great insights. By researching these numbers, you can evaluate other investors’ and users’ activity over time. You can also combine these with elements such as roadmap milestones and marketing plans to get a broader perspective.
The numbers surrounding the project and its digital asset can give investors a wealth of information. For instance, the project’s social media and community channel numbers could be a good indicator of how popular it is. Still, beware of bots and fake accounts, as these could give an inaccurate impression of how other people perceive the project and its products.
The cursory DYOR signoff below their promotion merely serves as a disclaimer that alleviates any responsibility from the shiller. Now that we’ve established why DYOR is important, let’s look at https://www.xcritical.in/ some methods traders and investors use to conduct proper research. Please note that the availability of the products and services on the Crypto.com App is subject to jurisdictional limitations.
A good way to gauge this is looking at the whitepaper, joining the social channels of the group and listening in on conversations. A lot of this information has an element of bias in it and may not necessarily give you the broad perspective you need to make an informed decision. It is always best to understand the deflationary economics of a token; this is known as “burning”, which limits the number of tokens in circulation, to prevent inflation and an oversupply. A good sign is when the token is deflationary and further has a burn mechanism that grows with usage.
Always remember that the behavior of market participants can’t be accurately predicted. Even during bull markets, learning about tokenomics can help you stay away from bad projects, and occasionally, catch the good ones early. Tokenomics (a portmanteau of the words token and economics) is very important, and you need to https://www.xcritical.in/blog/how-to-do-your-own-research-dyor-before-investing-in-crypto/ understand the unique tokenomics of a coin before you consider investing. However, research, especially in the crypto world is never really straightforward. The DYOR Token price page is just one in Crypto.com Price Index that features price history, price ticker, market cap, and live charts for the top cryptocurrencies.
DYOR can be regarded as a call to action, a reminder that in the crypto universe, knowledge is power and ignorance can be costly. In this article, we’ll guide you through the key rules of crypto, from DYOR to HODLing, and everything in between. Now, you might be thinking, “Research? I thought crypto was all about making quick cash!” Well, that’s a common misconception. Sure, some folks have made a fortune overnight, but those are the exceptions, not the rule.
Coin Market Cap and CoinGecko
When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility. CoinGecko cannot compete with CoinMarketCap in terms of the sheer volume and variety of market intelligence provided. However, the website can be a great tool to cross-check vital KPIs of coins/tokens listed on CoinMarketCap. Google is definitely good for the research of a lot of these factors but at the end of the day, practical knowledge is the power.
- Time is everything in crypto, and the earlier you are in on a project, the better the returns.
- Fraudsters could create multiple social media accounts to discuss a project or asset.
- This resource is great for accessing customized analysis carried out by the platform’s users into various crypto assets.
Many projects will release details of their tokenomics when they launch. These can outline how the project’s tokens will be distributed and what incentives exist to reward the community’s activity. Tokenomics can also feature compelling details such as founder and team vesting. DYOR is there to remind everyone that investments are only as good as the research that goes into them — and even then, there is no guarantee of success. Risks represent the natural cost of capital gains opportunities that investment activity offers.
Case Studies of Successful DYOR
The main reason for doing research is to practice responsible trading and disciplined thinking to minimize risk. It would be akin to gambling if one were to invest a lot of money in a product without knowing anything about it. Let’s look at some of the main reasons that investors are advised to DYOR. But what exactly does “doing your own research” entail, and how are people doing their due diligence? From this article, you will find out why you should always DYOR before investing and how to go about researching the project that has caught your interest.
Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation. The key information you can focus on for your initial research is coin and token rankings in terms of market capitalization or 24-hour trading volume. In the later stages of DYOR, you may look at information regarding specific tokens of interest to you. These are the key bits of intelligence to evaluate a coin or token. Just as you wouldn’t put all your eggs in one basket, you shouldn’t put all your money in one cryptocurrency.
Dyor Decentralized Investment App is an investor-friendly decentralized platform built to help you navigate and invest in Web3 and DeFi easily. The community surrounding a project can give you valuable insights. Check the project’s social media channels, Reddit threads, and Telegram groups. A strong community can be a powerful force in driving a project’s success. Because in this industry, knowledge isn’t just power, it’s your best line of defense against the risks that come with investing in crypto.
The White Paper- Check the white paper for the utility, use case, road map and vision of the project. So, research what will drive demand and adoption beyond pure speculation. The more the incentives (which must be sustainable), the higher the chances of growth. A good way to also gauge adoption is how incentivized developers and builders are to come to the project and build there.