DYOR (Do Your Own Research)

Do your own research or “DYOR”. This acronym has seen a lot of use in the crypto and investment space.

The term became popular during the wave of ICO projects that flooded the cryptocurrency world between 2016 and 2018. Many investors were scammed precisely because of their lack of awareness about the projects in question. Scams were flourishing at the time and people were losing funds due to their gullibility.

The phrase has now made its way into pop culture. It is widely used, especially when introducing newcomers who should learn how to navigate the dangerous field of misinformation that abounds in crypto.

The main reason for conducting one’s own research is to force newcomers into responsible trading and disciplined thinking in order to minimize risk. Without DYOR, it would be akin to gambling. One would invest a lot of money in a product without knowing anything about it.

Why is DYOR needed?

• Helpful reminder: DYOR was coined as a reminder that investments are only as good as your efforts to get the best information. However, even then, there is no guarantee of success. Risks are a natural problem that you have to be especially careful of in the crypto world. The best thing investors can do is to thoroughly seek out sufficient information to help them make decisions and reduce risks.
• Research vs Risk: DYOR enables individuals to mitigate the risks of irrational decision making when investing in cryptocurrencies. It will mitigate the consequences when investors experience FOMO and FUD. If you have made your own ‘DYOR’ and you know the project has no future, there is no risk of FOMO because you know you would lose your funds. The same is true if you’ve already invested in a project with a large use case. Even a momentary FUD shouldn’t tempt you to sell.
• Shilling: to raise awareness, some projects rely on shilling techniques for their digital assets. Through social media and communication channels, more people are motivated to support the project. Projects can sometimes engage influencers to use their platform and promote them to their audience. Inexperienced investors could be deceived as shilling is often presented as a genuine recommendation of the channel they follow. It is usually not displayed as an advertisement and the promotion can be subtle. For example, it could be inserted as part of a discussion or product review. Investors relying more on the influencer’s opinion than their own research could be persuaded to buy (promoted assets, NFTs or land in a metaverse).
• Sybil attacks: this is an attempt by scammers to gain influence on social media through a large number of fake identities. The fake profiles would contribute to the discussion of the project in order to give the impression of great interest. It seems then that many people are excited about the project. If a potential investor did not DYOR such a project, they might succumb to the impression of a good investment.

Where to search for information:

• Project’s website
• Whitepaper of the project
• Discord
• Twitter
• Medium
• GitHub
• Telegram
• YouTube

PROs

• Risk mitigation
• Greater awareness about the crypto scene

CONs

• Time consuming

Conclusion

The crypto market can be extremely volatile and it is important to remember that even the best information cannot guarantee a successful investment. To mitigate risk, investors can do in-depth research on the project they want to invest in. The more an investor knows, the better decisions they can make when deciding which project to invest in.