How to DYOR (Easy Guide)

The term DYOR gets thrown around a lot, it means Do Your Own Research. But how does one do their own research?

You open, reddit and buy whatever coin get shilled the most.

The end.

No but seriously, here are the three types of Analysis when researching a coin/token:

• Sentiment Analysis

• Technical Analysis

• Fundamental Analysis

I will try to explain each one as simple as possible.

1. Sentimental Analysis

The study of how everyone is feeling about an asset. Looking at the words people use online, quantity of mentions, and overall if the sentiment is positive (bullish) or negative (bearish). (Sources: Reddit, Twitter and other social media or news sites) Helpful video by Coin Bureau

Be careful of:

Influencers/Shillers: They usually have an incentive to promote certain projects.

Cult Communities: They will do their best to convince everyone that their project has no flaws.

High levels of caution and critical thinking is required.

2. Technical Analysis

Technical analysis is the study of the past price of an asset. This helps “trying” to predict its future price, by looking at the charts and identifying patterns (reversal or continuity patterns, bullish or bearish trends).

If you are not familiar with Technical Analysis, don't bother too much for now. Otherwise, there's good tutorials online if you're interested. Here is an example

Note: Charts won’t help you make educated decisions, but could aid in decision making.

3. Fundamental Analysis

The study of actual ideas, the technology, the progress and the team behind the project. Fundamental analysis is the most important type of analysis since it can be done by everyone and it’s practical.

The goal is to try and make an investment look bad. If you try and make a project look bad, but you fail at it, then you’ve probably identified a good investment.

Ask yourself: “How many other people are going to invest in this?” “Can this project be widely adopted and used by other people?”

Hard pill to swallow in crypto markets: Most coins/tokens do not have profit generating mechanisms, meaning that most will only be profitable if more people invest in them.

Now, to actual research, in simple terms:

Tokenomics:

Inflationary tokens: Inflationary means that a token will continue to be created. Inflationary assets usually decrease in price with time. Unless there is a big incentive for people to keep buying, Inflation means that something loses value over time.

Deflationary tokens: Deflationary means that tokens will be “burned” and the number of tokens in circulation will decrease over time. Deflationary assets usually increase in price with time, assuming no other significant changes in the market. Example: Bitcoin has a fixed supply of 21 million coins.

Team/Developers:

Is the team behind the project reputable and knowledgeable?

What is the track record of the developing team?

Does the project have a marketing and legal team as well?

What problem is the project solving?

Is the project innovative?

Does it offer a solution to a problem or does it improve upon an existing technology? (ex: L2 solutions, Interoperability, Inflation, Lower gas fees)

The biggest sources you can use for the above information are the project's Whitepaper, its official website and its Roadmap. Also, check their social media teams, see if they are active, reputable and with a good marketing strategy.

This is not a comprehensive guide but it's enough to get you started. My personal favourite strategy is to start with Sentiment Analysis and move to Fundamental Analysis, or vice versa. Technical Analysis helps to identify entry points. Then you can choose to DCA (Down cost Average) in a project or just invest an initial capital and reassess.

And please, be aware of scams and sketchy projects.