The term DYOR (do your own research), which means "do your own research", reminds us that every investor should not act based on rumors without doing research. I wrote this short article because I did not want my followers to invest without doing research or making mistakes.
Friends, before investing in a cryptocurrency, I recommend that you research that project in detail. Now let's look at these details one by one;
Investors and Supporters Behind the Project
It is very important how good the investors of a project are. Well-known names always highlight the project and ensure that it receives investment, but the number of investors is not what is important. Having 5 high-quality investors rather than 20 low-quality investors can make the project more profitable.
For example, there were only 2 investors in the $HOOK project. These were Binance and SEQUOIA, but after it was listed, it added WHAMPOA among its investors. Despite only 3 investors, the project made 25x. We can say that the reason for this is the quality of the investors of the project. Binance alone can be a sufficient reason.
Listed Exchanges
Binance is of course the most important of these, but you may also care about some other quality exchanges. Of course, in an ecosystem where even FTX has collapsed, we cannot be sure how reliable other exchanges are.
TOTAL AND CIRCULATING SUPPLY
Max Supply: It means the maximum amount of coins that a cryptocurrency can have at all times.
Total Supply: Shows the maximum amount of the coin currently available.
Initial Cap shows the total amount of a coin in circulation. Now let me show this with examples. For example, $LEFT
Coin Circulating Supply = 301 M adet
Total Supply: 508 M
Max Supply is uncertain, that is, we can say unlimited.
Let's comment 👉
$SOL total current coin amount is 508M but there is 301M in circulation. So 207 M units are not in circulation. (I am explaining for all coins) It is probably locked in the team, reserved for farming. The game coin is reserved for the game ecosystem, etc.
If the total supply is 500 and there are 100 in circulation, this means 400 more can enter circulation. There are different scenarios for each coin. You should carefully analyze where the coins that are not in circulation are located. If the locks will suddenly open and loaded coins will enter circulation, you should take a position.
Researching the project on coins with an uncertain maximum supply and finding out how long it will take to reach this supply and to what levels will provide you with great insight in your investments. For example, $Sol does not have a maximum supply, and its circulation quantity is assumed to increase over the years based on its inflation.
Market Cap: The total price of a cryptocurrency.
Fully Diluted Market Cap is the diluted value of the cryptocurrency. Now let's reinforce these two with an example.
$Sun
Market Cap: 68 M
Fully Diluted Market Cap: 115 M
Market Cap: Since Coin Price x Circulating Supply, it is found with the formula 222 x 301 M units.
Fully Diluted Market Cap: Coin Price x Total Supply Amount.
Market Cap is low because there are fewer coins in circulation than the maximum supply of a coin.
OUTSIDE VIEW OF THE PROJECT
I don't want to go into too much detail, but other things you need to examine are the project's website, the project's team, the team's previous work, the project's social media and news about the project, which is also very important because sudden declines or rises are shaped according to these news.
You can also benefit from this information when analyzing the prices of the coins you invest in. I really think you will find it very useful. These are simple but necessary and important information.
Of course, just what you learn from this article is not enough. Read our other articles and learn everything you can from other social media platforms.
