So, you have finally decided to provide justice to your hard-earned money by avoiding getting rigged or you are just curious “why my favorite person keeps saying DYOR at the start and at the end of his video” If yes, then look no further my friend you have come to the right hands.
This article is a specific guide to DYOR and will help our crypto lad to do a better selection amidst the noise of “get rich quick” coin or phrase saying “this coin will make you a millionaire, yay, whoo hoo” utter nonsense.
Rule NO.1 Never believe a news to be 100 percent true on Internet.
This is one of the sincerest advice that I can give to you if you have decided to ride this crypto ship. I am not asking you to be a Sherlock Holmes on the internet instead I want you to subconsciously repeat this rule in your mind before reading any review or price prediction of a coin. Look, it is possible that this youtuber, influencer or bunch of people have already invested in that coin and are convincing other people like you to invest in it, hoping a hike in price action. Oh! by the way the term is Shilling for this kind of scam.
PRO-TIPS FOR DYOR
· Don’t believe everything you read.
· DYOR is a daily process.
· Be patient & skeptical.
· YOUR money, YOUR decision.
· Keep your Emotions in check.
· Your gut feelings are linked with your crypto knowledge.
Selection of the Coin
Great, you think “Togo” (imaginary) is a good coin and is worthy of your trust. (I hope it is). Can this Togo coin of yours answer the following queries?
1. What problem is Togo trying to solve? Is it a real problem? 2.What is the market capital of Togo?
3.How is it unique from its competitors?
5.How did this project develop and what are the plans for future development? 6.How large is the community that are willing to adopt Togo’s use-case?
7. How is the project’s marketing and social media presence?
8. What are the key features of the Togo’s blockchain?
9. Are there any red flags?
10. Which exchange can I buy Togo on?
This is a MUST ANSWER checklist that I use before investing in any coin and the more Qs I can answer the better.
Fasten your seat belts Peeps.
Now I will dive into the steps of DYOR so without further ado, lets rock and roll.
HOW TO DO YOUR OWN RESEARCH
1. Verify the Sources
Always double check where you are getting the news about this coin from and how credible the source is. Usually, influencers and big audience websites prove to be trust worthy as they have a lot stakes in this respect. No one wants to lose their honor right! Look for general view of that source as if it or he is providing both sides of the story and not only the good one. Articles showing both pros and cons are usually trust worthy if you get a vibe of unbiased emotions.
TAKE AWAY: Audience count of the source. Time spent in the industry. Give unbiased conclusions.
2. Websites to visit immediately
You need to go to Coinmarketcap and Coingecko and see for that particular coin profile. In profile first look for the total market capital of the coin because
According to Metcalfe’s Law:
“The value of a network is proportional to the square of the number of connected users of the system (n2)”
So you can compare various currencies based on their market cap and square of active users or
traffic. Now peek at the total market for the industry that the coin is supposedly targeting and
compare it to the market cap of the coin. Next take a look at the circulating supply and look at the
amount that is in cold storage or set to be released/burned. Most cryptos are deflationary so think
about how the float schedule will change over time and how this will affect the price.
See the trading volume of the coin to make sure the coin is not dead for months so that you don’t get
your head stuck in it. Graph should show movements.
TAKE AWAY: Go to CoinMarketcap or CoinGecko website. Look for your coin. See its market capital. It should be 0.5 billion at least. Check the frequency of trading.
3. Coin Website Check
Do not stop now. Head towards coin main website and don’t get charmed by the looks of the website because making an impressive website is a piece of cake these days.
The website should clearly share information about the people behind the project. Poor websites, spelling errors and a lack of transparency around the team are all red flags of a scam-y investment or just another pump & dump scheme. Its white paper should give a useful explanation of the project.
their main goal is to highlight the coin’s purpose, utility, future prospects and underlying tech, which
all good projects go into in detail.
TAKE AWAY: Official website should show pictures of the developers and their profile links. With clear roadmap of the coin and its technology.
4. Developers Check
It’s important that the project developers should reveal their true identity to the investors to gain trust and provide useful links to their personal LinkedIn, GitHub and Twitter accounts.
Going through the profiles of developers should show their previous projects and good name. You can also ask about them from fellow developers.
5. Exploring Social Media platforms
Crypto info is extremely time delicate , and social platforms are often the best places to start, especially for learners. Try exploring their twitter, Facebook, reddit, Telegram and LinkedIn handles to absorb the general vibes of the community and feel the obvious pulse of the people. Keep in mind that you are entering bee’s nest and you wont a mine of salt in it, expect honey. Watch for the date of creation of account and also the number of people it beholds.
Good projects keep posting regular updates about the developments happening in the project to keep their lads believing and a sign of life and health. Look for the conversations to see if the team Is actively participating and reply. Also, they do AMA sessions on a periodic basis.
6. Charting and Technical Analysis
Moving forward now you need to do an analysis on how the coin is performing in general. Is the chart reacting to the news or is it just pumping just to land on its head?
TA is mainly the study of statistical trends, gathered from historical price action and volume data .TA gives an overall view to whether it will perform well in the near future or it has already given fruits. It should also help you know when you should take entry in the project and when to exit. You don’t want to enter just when the price is on its highest and see your investment halving right!
7. Look for red flags if any
1. See for the allocation of the coin quantity and make sure its major chunk is not assigned to its dev or its team members.
2. Explore its blockchain explorer so see its large amount is not revolving among 2 or 3 holders.
3. Red flag if they are promoting things like web 4.0 or talk too much of the future technology which is far head? ahead.
4. If the coin roadmap includes dilution of supply overtime.
5. If its not listed on major exchanges then give it a second thought.