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Bybit Learn
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Jun 10, 2022

DYOR

DYOR is short for “Do Your Own Research,” a disclaimer often used in crypto investment opinions online to remind users to take responsibility for their own investment decisions.

DYOR stems from a common principle in commerce, caveat emptor, which is Latin for “let the buyer beware.” Buyers have to take responsibility for examining each purchase they make. This term rose to prominence in the cryptocurrency market when a wave of initial coin offerings appeared in 2017, as companies sought to jump on the crypto bandwagon to create new coins, services and platforms to meet increasing demand.

While most of these companies were legitimate and genuinely contributing, there were also many scams creating fake coins and platforms to exploit investors’ ignorance of the volatile market. Therefore, DYOR is an important reminder for investors not to increase their risk of succumbing to such scams by trusting online investment opinions and tips blindly. Instead, they should perform their due diligence with background research on the product they wish to invest in, and assess each investment based on their risk appetite and investment goals.

How to DYOR

The main reason to DYOR is to increase your investment knowledge about available coins in the market, especially those cryptocurrencies you wish to invest in. Investing without such knowledge is highly likely to result in a loss. In a high-risk, high-return market like cryptocurrency, it’s all the more important to perform thorough research before investing in order to avoid incurring huge losses. Here are a few ways you can DYOR:

1. Understand the Cryptocurrency you Wish to Invest in

To understand the cryptocurrency you intend to invest in, you can DYOR by studying its white paper. Each coin developed and issued on a platform will have a white paper indicating the purpose for creating the coin, highlighting its features, technology and solutions. Using the white paper, you can also research developers’ backgrounds to determine their credibility.

In addition, review a product’s road map to determine the feasibility and achievability of the team’s milestones and plans. At the same time, it may be helpful to check their credit scores through an audit accessible from online reviewers like CertiK, so that you can assess their financial health and ability to reach the milestones they intend to achieve.

2. Review Technical Charts

As with stocks, there are tools to help you read and understand the technical graphs of cryptocurrencies — available on websites such as Dex.guru — which reflect the current prices of cryptocurrencies. These technical charts are useful for monitoring the trajectory of cryptocurrencies and picking up trends and patterns from earlier price fluctuations. These tools may help guide you in your investment decisions and timing.

3. Stay Updated on Social Media and News

Since cryptocurrency is a product that exists in the digital world, information is readily available online. Each network may have social media platforms where they share news, information and updates on their native coin. Therefore, it’s helpful to stay current with these social media communities — such as Telegram, Reddit, Facebook, Twitter or even Clubhouse — to keep up with the coin’s current updates, future plans and outlook.

In a market as volatile as cryptocurrency, no one knows with certainty which investments will be profitable. While crypto investment opinions and tips may be helpful for reference, everyone has their reasons to invest — so it’s critical to DYOR and make your own informed decisions, with calculated risks that match your risk appetite and crypto investment goals. Rather than relying on someone’s advice for your crypto investment simply because they appear to be successful in their investment choices, doing your own research encourages you to be a savvy investor and take charge of your own investment decisions. Equip yourself with the necessary information on the cryptocurrency you wish to invest in to minimize your investment risks.