Before investing in crypto, have your due diligence in place. Keep in mind to do your own research. DYOR. You must have heard about this term if you are related to the crypto space. Have you thought about what this “do your own research” means and how people follow it? Don’t worry; we have performed thorough research to help you know the importance of DYOR in the Crypto industry.

But, before we start our journey, it’ll be great to learn about the basic Crypto terms. This can be advantageous, especially if you are a newbie crypto investor. We have prepared a list of useful Crypto terms for everyone. Click here to learn more about it.

What is DYOR?

The term “DYOR” is frequently used in the cryptocurrency sector. Its main objective is to remind people of the importance of doing an extensive study on projects before investing in them and prevent them from acting haphazardly on other people’s recommendations. As a result, there will be fewer misinformed investors in all projects.

Before investing, investors can do research on a variety of topics that are mentioned in this article. However, even if you are successful in accumulating a plethora of reliable information about a project, it is always preferable to cross-check it with reliable sources.

Additionally, bear in mind that the cryptocurrency market is volatile; therefore, DYOR cannot always reduce project risks; instead, it essentially raises the possibility of the project’s success.

Now that you know what DYOR in crypto means, let’s check the following section about how you can undertake it and make yourself a pro!

There are two primary reasons that give importance to the concept of DYOR. Let’s check them out!

Why is DYOR important?

To Avoid Shilling:

People promote or advertise coins on social media with the hidden goal of profiting. Rarely does the advertiser care about the coin’s value or its underlying functionality. As cryptocurrency investors, you can be fooled by such deceptive advertising and wind up investing in the coins that an individual is only promoting for his or her own gain.

Sybil attacks:

In order to seize control of the blockchain network, fraudsters create numerous false identities in a single node. These false identities could appear to be only one to people on the outside.

Best ways to Do Your Own Research (DYOR)

The below methods will assist you in performing a solid DYOR.

#1 Fundamental analysis

Determining the fair value of a cryptocurrency is made easier with the use of fundamental analysis. Analyzing a crypto project’s sponsoring firm, core team, whitepapers, future roadmap, and other factors is part of the process.

The fundamental analysis is crucial to determining a cryptocurrency’s actual value and viability in the crypto market. It also includes investigating and assessing the whole crypto industry and the competitors to fully understand the viability of the cryptocurrency to make an investment decision.

#2 Technical analysis

Technical analysis gives you the technique you need while entering the market, while fundamental analysis informs you of the value of cryptocurrencies. Knowing when to enter and quit the trade involves comparing and evaluating the price movements of the cryptocurrency you want to invest in. You can perform technical analysis by examining cryptocurrency price charts, interpreting trends, indications, candlestick patterns, and more.

#3 Sentimental analysis

Sentimental analysis is the study of traders’ opinions of a particular crypto asset or the state of the market as a whole. Market circumstances are frequently influenced by how investors feel about the options available to them. Based on this, an asset is either oversold or overbought.

#4 On-chain analysis

Although it is remarkably complicated, this analysis will help you decide whether to invest in cryptocurrencies or not. The on-chain analysis makes use of blockchain data. It takes into account a variety of variables, such as a cryptocurrency’s transaction value and count, transaction fees, hash rate, staked tokens, etc.

A real-time on-chain analysis is used to determine how stable the blockchain network of the cryptocurrency will be. Then, you can use it to find market or cryptocurrency patterns.

#5 Social media analysis

While DYOR in crypto, social media analysis is essential, this research’ initial step entails assessing the website for the cryptocurrency project. It should give you all the details and potential outcomes of a specific cryptocurrency project.

Checking social media channels to discover what experts and influencers are saying about your favorite cryptocurrencies is the next step that you should follow.

#6 Read whitepapers

A whitepaper is a document that details a cryptocurrency’s future possibilities from start to finish. You can learn the history of that cryptocurrency, the reason for its creation, the future plans, and the growth possibilities. As a result, reading the whitepaper is essential before investing in cryptocurrencies.

#7 Read news

There is no alternative to this fundamental DYOR crypto phase. Therefore, you need to stay current on everything that happens in the global crypto market. As a result, you should develop the practice of keeping an eye out for any new developments, regulatory adjustments, or almost anything that could have an impact on your investment.

Conclusion

The crypto market is highly volatile as compared to other financial markets; thus, no amount of study can guarantee you 100% success, but research can still be beneficial to your journey in the crypto business. So, always DYOR and mitigate that risk of investing.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.