Importance of Do your Own Research (DYOR): Concept, Need & How It Works?
What is DYOR and how can you benefit from it? What does it signify in cryptography? How will it save your time and energy? And what are the benefits of this methodology? Not sure what I'm talking about? Read on, dear reader!
The cryptocurrency sector is rapidly growing. Its own platform, money, and even language are all unique to it. it is one of many words that are frequently used in the industry as catch phrases or slang.
When you hear the term DYOR, you are probably already aware that it is not about doing your own homework for your classes. It is actually a term used in the crypto industry to get more information about a project before investing.
It is a favourite acronym of cryptocurrency traders and investors. The meaning of "DYOR" stands for "Do Your Own Research".
Some people even think that in crypto, there is no need to trust or believe any recommendations or news that are intended to be helpful or constructive, because if you are a crypto investor, all you need to do is perform some due diligence on whether an ICO has been exposed to regulatory scrutiny and banned in some countries.
What is the concept of “Do Your Own Research”?
The phrase "DYOR" is often used in the cryptocurrency trade and related industries. Its main objective is to remind people of the importance of doing extensive study on projects before investing in them and to warn them from acting mindlessly on other people's suggestions. As a result, less ignorant investors will be present throughout all ventures.
Before making an investment, investors can conduct extensive research on a variety of topics, including the organisation's history, its leadership, and its online reputation. Even if you are successful in compiling a wealth of reliable information about a project, it is always preferable to cross-check it with reliable sources.
A well-researched investment will help you make more money than any project you have carried out out of faith in a third party. Keep in mind that no amount of DYOR, no matter how strict, can solve every issue. Due to the volatility of the cryptocurrency markets, It can only be used to evaluate the likelihood of a project's success and gain a better knowledge of the degrees of risk involved. It does not completely eliminate the risk of a disastrous investment.
Why do we need it?
Research is mostly done in order to practise risk-aware trading and disciplined thinking. If one were to invest a lot of money in a product without researching it, that would be similar to gambling. Let's examine some of the primary justifications for it as given to investors. The industry's finest approach to risk reduction for impulsive decision-making is this one. Investors are susceptible to investing in hyped-up projects when the market suddenly improves and everyone starts to do so. This is due to FOMO. However, they won't be able to decide irrationally on the investment if they have done their homework on the idea.
The cryptocurrency business is not an exception to the ongoing online fraud schemes that affect the cyber world. Numerous scammers continue to worry investors with their bogus projects. To demonstrate authenticity, they even open several social media accounts. This frequently creates an inaccurate perception of the project. However, someone who has done their homework well won't fall for these tricks.
Shilling is a method that many people use to market the coins they own in an effort to affect their market pricing. Shillings are frequently used by legitimate organisations as well, thus investing in that specific coin or initiative can be confusing. But if the person is thoroughly investigated, there won't be any confusion.
How to Do Your Own Research “DYOR”
Analysis of necessary documents:
The most crucial document to find before investing in a project is a white paper. In addition, during the transaction, a smart contract or the project's roadmap should be carefully reviewed.
Read the data carefully
The project's and its organisation's various numbers should all be thoroughly examined. Every number should be investigated, including their social media followers, community channel numbers, total supply of their assets, market capitalization, circulating supply, and tokenomics.
Consult with an financial advisor:
If you are a newbie and are unsure of where to begin, you should speak with a reliable financial advisor. Although this approach could seem simple and risk-free because a third party is involved, it is frequently advised against DYOR.
Be a crypto literate:
If you want to survive in this field, you should concentrate on improving your crypto literacy as the global literacy rate rises. Follow the most recent industry-related news and trends.
Everybody should be reminded by DYOR that investments are only as good as the research that goes into them, and even then, there is no assurance of success.
Risks are the unavoidable price that investment activity must pay to provide potential for capital gains. The best thing investors can do is empower themselves with the information and research they need to make informed decisions and minimise risks.
Conclusion
It's critical to keep in mind that no amount of study can ensure a profitable investment in the volatile crypto market. Investors can educate themselves with information on the project they want to invest in in order to reduce risk.
There is a lot to learn about the cryptocurrency market; the more knowledgeable investors are, the better it will be for making informed choices. It is important that you are diligent when conducting research before you decide to invest in a coin.
You can never be sure if a coin will be the next big thing and make you rich. It is also important to understand that even if a coin is legitimate, it could be something that only people in the blockchain industry would understand.
This means your friends, family, and especially professional peers may have a difficult time understanding what you're talking about and therefore will discourage you from joining the crypto community.
By- Akhilesh Kumar Yadav
