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How To Do Your Own Research (DYOR)

May 8, 2023


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Do your own research. The cryptocurrency community does not have a set of commandments nor does it enforce a strict set of rules. However, one approach commonly proselytized by investors is that everyone should bloom by relying on personal research.

In an ideal world, beginners of any subject would have access to an universal handbook that dictates how a sector works and how to participate in it. But since we are far from living in an ideal world, users are highly encouraged to Do Your Own Research (DYOR).

DYOR is a philosophy that has never run out of fashion. It can be utilized in all facets of life. But when it comes to a disruptive and highly innovative industry such as blockchain, there is really no other way than to DYOR.

As you might have already guessed, this lesson deals with research. Specifically, researching without external help. Although the Shrimpy Academy is extensive enough to guide you through various parts of the cryptocurrency world, research done on your own is still a valuable skill that will be needed in later phases.

What is DYOR?

DYOR stands for Do Your Own Research and it represents a powerful acronym that urges newcomers to learn on their own and not to (always) rely on others. More specifically, DYOR is pushed by the community in order to protect new investors who search for good investments and fall into the trap of being shilled by other investors who want to pump their bags.

Failure to DYOR in Practice

For example, let's say that a new investor called Bob joins the cryptocurrency market by creating an account on Binance and funding his account. He has heard about Bitcoin, Ethereum, Litecoin, and all the other fancy names but he is interested in profiting much more by buying altcoins flying under the radar. 

His quest of finding a good asset begins by searching, rather than researching. What does this mean? Bob visits Bitcointalk, a crypto subreddit, or Crypto Twitter discussions, to figure out which coins are trending as of lately. Within that journey, he encounters users who advertise their assets to others in order for their own portfolio to rise. Alternatively, those users might be part of a project’s marketing team who talk about the project for the purpose of raising awareness.

If relying on the word of others, you are more likely to be deceived. Sure, a person might help you out by revealing his in-depth knowledge of a highly bullish altcoin but that is not the case most of the time. Instead, Bob will buy someone’s bags and end up with a project that is, in the worst case, not even being actively developed.

How to DYOR

The end result of Bob’s crypto journey is that he bought a digital asset by relying on the word of others, rather than reaching a conclusion on his own. If lucky, he might have truly struck gold but as we said, that is sadly a rare occurrence in the sometimes predatory world of investments.

At the end of the day, crypto is all about making money, so it should not come as a surprise that investors are taking advantage of others. The solution? DYOR.

There are numerous ways to conduct research, some of which you will hear about in the section below. However, we also plan to do a deep dive by covering each tactic individually in upcoming lessons. 

Learn How to Learn

It might come as a surprise, but many people do not know how to properly learn. They memorize unnecessary information, never bother to test a process or experiment, fail researching past surface-level information, and overall never grasp the core meaning of a subject.

Do you fall into that category? In that case, learning how to learn is far more important than understanding what a blockchain is or what kind of information crypto transactions hold. 

Get back to the basics. Set out a strategy for finding your way in the decentralized world and stick with it. Do not bother with reading snarky Twitter threads that contain half-truths but rather focus on the fundamentals.

Identify Potential Investments

Identifying which projects are ripe for investing accounts for a significant portion of DYOR. After all, arguing which block size is better can get you only so far. The real purpose of participating in the cryptocurrency market is to invest in assets, and not to discuss them. That is why you need to warm your chair up and spend countless hours researching projects. 

First and foremost, create a short list of projects that you are interested in. Then, review each project by reviewing their website, team, smart contracts, marketing style, and so on. Practically, do everything that one does when conducting fundamental analysis.

Analyze, Analyze, and Analyze More

Since we have reached the point of talking about analyizng prospective investments, it is time to truly lay out the importance of analysis.

Anything that helps you become more informed about a subject is a form of analysis. Whether you spend time drawing triangles on charts or reading a team’s tokenomics report, the end result is all the same - you are analyzing a project’s potential. 

Analysis comes in all shapes and forms, so stick with what you do best. Are you good at understanding new topics? Do FA. Good at discovering patterns or writing code? Create your own indicator using Pine script or stare at a cryptocurrency’s chart until you find a meaningful connection. 

Technical Analysis (TA)

Previously we have mentioned that analysis is everything. For a day trader, that is 100% the truth. Staring at charts, looking for candle patterns, checking up indicators, and testing new trading strategies is everything that you need to do in order to succeed with technical analysis.

Naturally, DYOR is important here as well. There is always a day where you can learn something new or master trading purely through practice. 

Fundamental Analysis (FA)

Last but not least, investors are welcomed to DYOR by meddling with fundamental analysis. FA is an evaluation strategy used to determine the fair value of an asset on the market. This is usually done by reviewing business practices, whitepapers, roadmaps, development, marketing strategies, teams, tokenomics, network activity, etc.

In some cases, FA also includes monitoring market data such as volume, circulating supply, token emissions, distributions for team tokens, and so on. 

With the help of fundamental analysis users are capable of reaching conclusions as to whether a project is undervalued or overvalued, as well as how it fares against rival projects. Since the process is incredibly extensive and requires a lot of research, investors can only rely on DYOR. 

About The Author:  
Marko is a crypto enthusiast who has been involved in the blockchain industry since 2018. When not charting, tweeting on CT, or researching Solana NFTs, he likes to read about psychology, InfoSec, and geopolitics.

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Crypto Investing Guide: Fundamental Analysis