How to Properly DYOR and Protect Yourself in the World of Cryptocurrency

Investing in cryptocurrencies is not without risk. Tempting returns, fear of missing out, and new protocols that seem reputable are everywhere, making it difficult to navigate the landscape. In this article, we will review a non-exhaustive list of valuable tips on how to invest wisely and protect yourself.

DYOR: Making Your Research an Essential Step

It cannot be stressed enough, but DYOR, or “Do Your Own Research,” is an indispensable step before investing.

To conduct effective research, here are some tips. Note that this list is not exhaustive:

• Check the official sources of the project. Someone contacting you on social media is not an official source. You should visit the project’s website or official social media accounts.
• Wait several days before investing. Avoid getting caught up in FOMO, or “Fear Of Missing Out.” Other great opportunities will arise, and FOMO implies that you must invest immediately. Waiting a few days will give you time to ask the right questions and possibly spot some red flags.
• Verify if the project has a one-pager, white paper, light paper, roadmap, deck, etc. If the people behind the project haven’t taken the time to create such documents, it shows a lack of seriousness. These documents are there to present the technology used, the team, their purpose, and the research that led to the construction of the project. They are very important.
• Check if the code has been audited. These projects are asking for your money to grow, but did they spend money before asking you to trust them? Communities are mostly made up of investors, not developers. An audit allows developers to review and approve the code. Note that this doesn’t mean that all systems are foolproof, but the risk of losing your investment due to an intentional or unintentional error in the code is reduced. If it just says “Our code is audited,” that’s not enough — you need a link to the audit report.

This is your money; you don’t want to entrust it to just anyone or completely rely on someone else to manage it. Even if this person has good trading performance, it never, EVER, guarantees future performance.

DYOR Also Means Understanding the Technology

Read articles. Try to understand the technology being promoted by the project before investing. There are more and more resources available in the fields of blockchain and cryptocurrencies.

It’s also worth checking if the project in question has such resources. Are there articles written by their teams or community available? Are these articles academic or merely investment pitches? This is what you should pay attention to.

If the project’s founders don’t take the time to explain the importance of their solution to their community, other than using terms that push for donations or investments, it’s best to avoid it!

A friend asks you to invest in a yield farming or flash loan protocol? First, find out how these technologies work before putting your money into them.

Tips for Protecting Your Cryptocurrencies and Investments

A surprise airdrop on the Discord or Twitter of your favorite blockchain project? Always verify!

Social media accounts can be hacked, and this happens quite often. Therefore, it’s important to always follow the rule of checking the information on the other social media channels of the company or project. Look to see if an official article has been published with the steps to follow.

Too many people still lose their cryptocurrencies due to this type of hack. A recent example involved the hacking of the Discord servers of Avalanche and zkSync.

Use Multiple Wallets to Protect Your Cryptocurrencies

To enhance the security of your assets, consider using several wallets instead of relying on just one. This way, if one wallet is compromised, your entire investment isn’t at risk.

And most importantly, use hardware wallets!
You can combine your MetaMask wallets with your Ledger to secure your browser wallets.

Separate your hardware wallets: use one for online security and another for protecting your long-term investments.

Whether or not you use a hardware wallet, it’s crucial to use multiple browser wallets and clearly distinguish between those used for staking, farming, and airdrops. For instance, you can have a Rabby wallet, a MetaMask, and a Coinbase wallet on Firefox, Chrome, and Brave, using each wallet for a specific purpose. This way, if one wallet gets hacked, the others remain safe, minimizing potential damage.

Never put a large portion of your investments in the wallets you use for participating in airdrops or for testing purposes.

Stay Informed About New Types of Hacks and Protection Measures

Remember, this is your money, and you are the only one responsible for it.

New types of hacks are emerging every day, so it’s crucial to stay vigilant. To do so, follow specialized crypto news outlets, either through newsletters or on the social media platform X (formerly known as Twitter). On X, information will be faster, almost in real-time.