How and why to do your own research (DYOR) when purchasing cryptocurrencies

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Doing your own research, or DYOR, is a phrase you hear a lot within the cryptocurrency community.

Doing your own research often means delving into the fundamentals of a project before committing your money.

Find out why it's essential to do your own research and how experienced users perform their due diligence.

Do your own research, or DYOR, is a phrase often used in content about trading and acquiring cryptocurrencies. Learn how and why people do their own research.



Do your due diligence. Don't forget to do your own research. DYOR. In the world of cryptocurrencies, these phrases are everywhere. But what exactly does “doing your own research” entail, and how do people do their due diligence? In this article, you will discover why you should always do your own research first and how you should research the project that has piqued your interest.

Before diving headlong into a project you've seen, it's best to familiarize yourself with the terms of the cryptocurrency world , as well as the practices and sectors ( DeFi , NFT , GameFi , etc.) to understand the market you might enter. to participate. Binance Academy is a free educational platform for both new and experienced users to find detailed information covering many key aspects of the cryptocurrency and blockchain industry.

What is DYOR?
Doing your own Ecuador Mobile Number List research, or DYOR , as popularized by cryptocurrency lovers, is a common phrase used in cryptocurrency usage and trading. The idea behind this term is to reduce the number of uninformed users and encourage users not to blindly trust others. Any area of ​​interest or new project should undergo considerable research before the user considers participating in it.

Users can analyze several essential areas when researching a project. For example, some areas worth studying first are the team members, their history and experience, the project roadmap, past successes and failures, as well as community engagement. It is good practice to cross-check relevant details from several reputable sources. Thorough research helps evaluate the validity and potential of a project before participating, so let's look at some key criteria for evaluating cryptocurrency projects.

It is important to note that even the most rigorous research is not the solution to all ills. Due to the volatility of cryptocurrency markets, doing your own research does not eliminate the risk of making a bad purchase; It can only help assess the likelihood of a project's success and better understand the levels of risk involved.

Why do you need to do your own research?
The main reason to do research is to practice responsible trading and disciplined thinking to minimize risk. Investing a lot of money in a product without knowing anything about it would be like gambling. Let's look at some of the main reasons why users are advised to do their own research.

Research vs. risk
DYOR allows people to mitigate the risks of making irrational decisions when purchasing cryptocurrencies. Market sentiment, for example, can cause users to invest in an asset out of FOMO (fear of missing out). When the market rises, some users may get carried away by the hype and buy out of fear of missing out. Without thorough research, users are more likely to suffer financial losses after purchasing assets at high prices.

Similarly, when there is FUD (fear, uncertainty and doubt), users may panic sell, influenced by commentators and other users on social media. The so-called “ weak hands ” tend to panic when the market starts to go down and community negativity increases. Without proper research, users are more likely to sell their assets and suffer losses by being influenced by negative market sentiment.

Additionally, some tactics used by cybercriminals in the cryptocurrency sector are designed to take advantage of inexperienced users, or those who have not conducted disciplined research.
               


Sibylline attacks
A sibylline attack is an attempt by cybercriminals to gain influence over a network through a wave of fake identities. This type of attack can apply to some areas of cryptocurrency, but in this example we will focus on how it could influence user decisions.

Scammers may create multiple social media accounts to talk about a project or asset, and attempt to hype that project by creating an illusion of community engagement and starting conversations with real users on social media. The discussion is then reinforced by the additional network of social media accounts under the cybercriminal's control. This can create a false impression that many people are excited about the project. If a potential user has not done extensive research on the fundamental project being promoted in this way, they could be influenced to purchase an asset with little real value.

Promotion
To publicize the product, give it hype and talk about it, some projects resort to various techniques to promote their digital assets. Various people are incentivized to hype the project or promote it through social media and community channels. Projects or assets looking to promote themselves can sometimes hire prominent Internet commentators and influencers to use their platform and promote it to their audience. Susceptible users might be drawn in by the hype, especially since that promotion is often presented as a genuine recommendation from someone they follow. It doesn't usually appear as advertising or promotion, so it can be quite subtle. For example, that promotion can be inserted as part of a debate or a product review. Users who rely on the influencer's opinion and not their own research could be convinced to buy a dubious asset.