DYOR — Do Your Own Research
DYOR stands for “Do Your Own Research” and is often used by cryptocurrency enthusiasts. However, this abbreviation is common not only in the cryptocurrency industry. It is widely used on the Internet because of how quickly and easily misinformation can spread.
DYOR aims to reduce the number of uninformed investors in the crypto industry. This abbreviation encourages them to study before investing so that they can answer exactly why they buy and support this project.
WHY is it important to DYOR?
Shilling is a common practice in cryptocurrency, when people, as a rule, advertise coins or NFT projects they own in the hope of positively influencing the price or attracting attention. When buying any crypto or NFT, it is recommended to make a decision yourself before investing, and not just because someone said it’s cool.
How to do your own research?
The algorithm below is one of the easiest ways to conduct quick research. And it can vary — it depends on how deeply you want to study a project.
Project Naming
It may seem strange, but the name can already say that the project is trying to use someone else’s success.
Website
Here we need a simple visual check — how well it works, what font is used, check the pictures, photos of team members (if any) and art for their originality (via image search), the name of the site itself in the address bar, the clickability of links and the logic of building the site. Also, we’d recommend to beware of projects compilated from other commercially successful ones (this is about NFTs) — Doodles, BAYC, CryptoPunks clones and varieties.
Investors & partners
The presence of large funds that invest money in the project will not allow developers to relax and will try to squeeze the maximum out of it. Of course, information about real investments of funds should be confirmed in publicly available sources, and it would not be superfluous to clarify with the representatives of the project which of the listed on their website is an investor, who is an adviser, and who is a partner.
There is a certain gradation or definition of “Tier”, reflecting the particular fund, partner, backer “coolness”. And the more such partnerships the project has, the higher the tier, the more promising your investment may be.
Each fund values its reputation, has its portfolio, tools and criteria for evaluating projects in which it invests money.
Here are some tools/resources to help you make the right decision:
SpreadSheet — gradation of funds by tiers (levels). Go to the project’s website, find partners, check with the sign, drawconcludeinvest or pass by (it is not 100% advice, just a guideline).
CHAINBROKER — to observe which projects are currently trending and where funds are investing. You can even look into their investment portfolios.
Whitepaper
It is where you can learn the idea of the project, its vision by the developers, the mechanics and the relevance of the idea. Here it will be possible to decide — for what prospects and for what purposes you take a token/NFT.
The whitepaper usually includes a financial model, legal issues, SWOT analysis and a roadmap for project implementation. Study projects that do not publish official documents in more detail.
SWAP.NET WHITEPAPER — https://docs.swap.net/
If it is abstractly written that “we’ll change the world for the better, buy our token faster, it will only get more expensive”, — this is a bad signal. A good project should have a coherent business model and it should not be a duplication of existing technology.
Roadmap
An important part of the project, sometimes included in the whitepaper. Take a retrospective look at the development of the project and correlate what the project has achieved and look at the dates from the roadmap on Medium or Twitter. See what plans the project has and how feasible they are, how their development model correlates with investment strategy and other time points.
A serious project immediately indicates how long after collecting money it is ready to demonstrate the result. Having such a plan is a good signal. The investor can focus on it and compare intentions with actual results. Too loud promises and unrealistic deadlines for the implementation of the project should alert.
Social Media
Relevant for small ones — Twitter, its activity, the content of posts, the ratio of the number of likes, comments and subscribers, the age of the account are necessarily checked. A great tool for research and audit — https://www.twitteraudit.com/.
Discord, there are not even resources needed here, by going to the project channel, looking through the general chat, a couple more thematic chats. And you will see how active / inactive the ds is; secondly, how many bots are in chat rooms, whether they are banned.
Medium, it is also worth evaluating how valuable the articles are, their number and necessity.
Telegram should also be checked for the activity of the audience, its volume, the efficiency of admins and their competence in answering questions.
Look for projects that regularly publish detailed reports on the work done on the company’s website or social networks.
Team
Definitely check the team members, their experience in such projects, their role and specializations, whether they are involved in the development of other projects, check the Linkedin profile and generally public mentions of their successful /unsuccessful launches.
But scammers sometimes come up with fake founders for their projects. Even if profiles exist, they should be checked to see if there are real people behind them, whether subscribers and likes are not screwed up. Bots can generate activity, but they are easy to calculate from the same type of messages or pictures. Check the profile photos again (via image search) — sometimes it turns out that other people’s pictures are being used.
Sometimes the project is promoted by well-known, media personalities, and the founders themselves remain non-public. This should alert you. However, many in crypto industry prefer anonymity, worrying about personal security.
What else should alert?
- Guarantees of earnings and the growth of the price. If the project managers claim that all investors are guaranteed to earn X money — this is 99.9% probability of a scam.
- Guarantees of high returns. One of the most important markers of the scam is the promise of guaranteed earnings.
- Aggressive marketing. If the founders of the project are running a very active advertising company, distributing many NFTs for free, constantly holding promotions and sweepstakes, cooperating with bloggers, many promoters with the same prize, think about it.
- Listing on non-top exchanges/secondaries. If a coin/NFT is traded exclusively on one or two little-known crypto exchanges/ secondary markets, this is a shady thing.
Conclusion
All of the above will be enough for the initial simple evaluation of the project that you found interesting. At first it will take a lot of time, but later you will inevitably learn not only how to effectively distinguish a scam from normal projects, but also gain a good competence in the world of crypts in general, due to extensive experience in studying various project metrics. And that’s fine.
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Our website: swap.net
