BETTER THAN YESTERDAY WITH BSCSTATION #3: DYOR

What is Do Your Own Research (DYOR)?

Do Your Own Research (DYOR) is a popular term within the cryptocurrency, blockchain and trading communities. It’s a gentle reminder to take charge of your own investment knowledge and decision-making.

DYOR is especially important for newcomers, who are more prone to making mistakes – or being misled. Luckily, when it comes to cryptocurrency, there are plenty of resources to help you. That is why you should Do Your Own Research.

Why Doing Your Own Crypto Research Matters

DYOR aims to reduce the number of uninformed investors in cryptocurrency. DYOR encourages investors to research and understand a cryptocurrency before investing and helps them answer precisely why they are buying that currency and supporting that project.

DYOR is an essential concept to follow in crypto and other areas. It’s crucial because Crypto regulations remain vague and underdeveloped, meaning there are more scams than in traditional financial markets. So it’s vital that you DYOR.

Challenges you may encounter when DYOR

Concrete information on certain subjects can be hard to find or may not exist yet. For some new coins, this can lead you to jump on the hype bandwagon before doing your own research. The fear of missing out (FOMO) is a very real phenomenon within the world of cryptocurrency. It is also fairly common to encounter unduly negative opinions of other cryptocurrencies, which can make you miss out on a sound investment.

Verifying and understanding information can also be challenging. Like any other new and complex topic, all it takes is time to read, understand, question, and assimilate the information. Remember, patience is a virtue.

What you need to look at when DYOR!

Below is some information you need to take the time to research about a Cryptocurrency or Crypto Project and gain knowledge before deciding to invest in

Industry research

What real-world industry or sector is the project looking to disrupt? Knowing that answer will indicate how much potential value could flow to the cryptocurrency, assuming the crypto project’s solution is better than currently.

Team size and experience

In crypto, founding teams often stem from the same company, startup, or college. In addition, many crypto projects are developing while investing in the underlying cryptocurrency. Therefore, you must research crypto founders’ professional and educational history.

Read the project Whitepaper

Per the Collective Shift crypto glossary, a whitepaper is “a document prepared by a project’s founders detailing the problem the project addresses and how a blockchain-based cryptocurrency is fundamental to said project’s existence.”

If you finish reading a whitepaper with more questions than when you started, it’s not a great sign. But, of course, you can verify any queries with the project’s team members and/or community. (Doing this is often a time-efficient way to learn about a project and the role of its native cryptocurrency.)

Sources of funding

Find out whether the company behind a given crypto project has previously raised venture capital and/or private equity. If they have, go further and look into which investment firms and angel investors have invested.

If reputable, experienced investors will back the project, you can generally take that as a reason to continue doing your own research. (Just remember that even the best investors make bad calls!)

Also, sometimes you’ll find that projects have received non-equity grants through accelerator programs. These are typically administered by government-backed entities or the innovation arm of technology multinationals.

When you DYOR and find a project that’s received this sort of funding, it’s generally not a bad idea to further research the project—along with its native cryptocurrency.

Partnerships

Examining the quality of a project’s partners can be a great way to figure out how promising their solution—and thus the potential value of its cryptocurrency—is.

Partners can be native or external to the crypto space. Crypto investors tend to give more value to external partners. (As a crypto project founder, convincing a non-crypto company to partner or collaborate is challenging work—as it should be.)

Be careful, though. If the project you’re researching claims to have partnerships with world-leading corporations, you should inspect the partnership announcement and the terms of the association.

Blockchain technology use case

Understand why blockchain technology is inherent to the project’s existence. That is to say, why has the team chosen to build its solution with blockchain? The whitepaper should explain this. Often, the project will have blog posts expanding on this.

Know the token type

It’s crucial to know the function of the cryptocurrency you’re thinking about investing in. This is because the way cryptocurrencies capture value varies tremendously.

For example, work tokens (e.g., Livepeer’s LPT token) are fundamentally different from utility tokens (e.g., the Brave browser’s Basic Attention Token (BAT)). And these are fundamentally different from cryptocurrencies (e.g., the Bitcoin network’s bitcoin (BTC)).

Leverage other crypto research

The crypto space has evolved significantly in recent years. This is a great thing for crypto investors. That’s because there’s now much more publicly accessible research. It’s highly the cryptocurrency you’re considering purchasing has been covered by independent analysts. (A simple Google or YouTube search will tell you if it has.)

Track record

If the crypto project has existed for a while, it’s worth looking over its roadmap and past blog posts. This will help you determine how tightly the team sticks to their deadlines or whether they have a history of delaying releases.

When deadlines must be postponed for various reasons, how the team communicates this (if at all!) can reveal a lot about the team's nature.

This is important to include in the DYOR process because the team is ultimately responsible for the underlying cryptocurrency's value. If the solution they’re building doesn’t turn out to be what they said it would, the price of the cryptocurrency will most likely struggle.

Upcoming event dates

For crypto traders and investors alike, knowing what’s down the pipeline for projects can be worth knowing. That’s because the price of the project’s cryptocurrency usually becomes more volatile in the period leading up to a key date. Examples of key dates include mainnet releases and major version upgrades.

BSCStation - Your trusty Partner

If you are a fresher in the game, you may consider Do Your Research with BSCStation. BSCStation is a fully decentralized protocol for launching new ideas. An all-in-one Incubation Hub with a full-stack Defi platform across all main blockchain networks. We provide exclusive services including IDO/INO Launchpad, Yield farming, NFT Auction, Marketplace, and BSCSwap especially BSCStation has cooperated with many potential and promising projects 

BSCS Holders will have numerous privileges such as joining IDO/ INO Projects on BSCStation (Guarantee Round), stake BSCS tokens to earn profit with fascinating APR in our Stake pool and many more.

For newcomers, BSCStation is truly one trusty partner to accompany in the massive Blockchain world.

Conclusion

While there is a lot of excitement around cryptocurrency, knowledge is power. So invest the time in doing your own research before investing your money, and you’ll be more likely to achieve success within the cryptocurrency world in the long run.

Disclaimer: Cryptocurrency investment is subject to high market risk. BSCStation is not responsible for any of your trading losses. The statements made in this article are for educational purposes only and should not be considered financial advice or investment recommendation.