Concept

Do your own research (DYOR); In the context of crypto, the term usually denotes that in the space of online communities (as a sector), crypto users and participants have to exercise due diligence, on a priority basis, including particularly conducting research before investing in any project. As a technique, do your own research emphasizes the importance of independent investigation and due care while making decisions as to invest in or have exposure to newly deployed projects (and underlying cryptoassets/ cryptocurrencies/ tokens, etc.) Rather than depending solely on other investors/ users’ opinions, recommendations, or investment history, it calls on market participants to carry out thorough research and evaluate the potential risks, rewards, and specific characteristics of an investment or financial product to ensuring making informed decisions based on right understanding of the market.

Requirements

Do your own research entails that a participant is well equipped with the knowledge and tools to make informed decisions. In-depth research can reduce the likelihood of falling victim to scams, poor investments, or overly speculative projects. This implies that no one else would care about a participant’s best financial interests more than the participant himself/ herself. In short, the responsibility for financial decisions rests with the ultimate decision maker, not other market players. Do your own research requires that time and effort are dedicated in order to carefully evaluate all the fundamentals and factors related to an investment opportunity arising from new projects or asset classes that by nature involve a great deal of risk.

Thwarting threats

In the cryptocurrency market, fraud and scams are very much common. A common fraudulent practice is the so-called shilling whereby persons promote a cryptoasset (usually owned by them) to drive up its price for immediate gains. Scams involves spreading hype around dubious projects to entice unsuspecting investors. By doing own research, an investor can identify potential threats and red flags and avoid falling victim to such fraudulent practices. By do your own research, an investor can understand the true value of any investment and the potential risks associated with investing.