9 June 2025
How to Do Your Own Research (DYOR) in Cryptocurrency: A Step-by-Step Guide
The Important Bits
Doing Your Own Research (DYOR) is essential in cryptocurrency investing to avoid scams and misinformation, similar to "buyer beware" in traditional consumerism.
Crypto users should understand cryptocurrency fundamentals like blockchain, consensus mechanisms, and tokenomics, and evaluate the project’s whitepaper, team, and roadmap.
To avoid biased or misleading information, use multiple high-quality sources, such as whitepapers, reputable news sites, and community feedback.
Analyze market, regulatory, and technological risks to make informed decisions and avoid high-risk projects.
DYOR is a continuous process; staying informed on regulatory changes, market trends, and technology advancements can prevent losses and ensure smarter investments.
Intro to DYOR
When it comes to cryptocurrency, doing your own research (DYOR) is critical. With the prevalence of scams and failed projects, many have learned the hard way that skipping research can lead to costly mistakes. DYOR has become a common cautionary principle, much like "buyer beware."
However, DYOR is more than just being cautious. It involves a structured approach to gathering and analyzing information. This article covers what DYOR means, how to conduct effective research, what to look for, red flags to avoid, and the risks involved.
What does DYOR mean?
The expression DYOR or “do your own research” implies that listening only to others can be misleading. It’s common for people to try to hype up their own crypto projects or those they’re invested in, while others create fear, uncertainty, and doubt (FUD) about competing projects. Even worse, someone could be promoting an outright scam. Stories abound of people facing heavy losses due to trusting a single person or source with their investment decisions. Doing your own research can help to prevent such pitfalls.
How to Do Your Own Research
Not sure how to DYOR? There are many potential ways to do your own research, some of which come down to personal preference. Two important broad-scope ideas involve learning the basics of crypto and evaluating a specific project.
Learn the fundamentals of cryptocurrency
Doing your own research starts with understanding the fundamental principles of cryptocurrency and blockchain. It will be difficult to DYOR without knowing what you’re looking for.
Begin with the basics of blockchain, and get familiar with topics like:
What is distributed ledger technology?
What is a consensus mechanism, and what are some examples?
What are private keys and public keys and how do they work?
What is tokenomics?
Answering these questions may seem daunting, you don’t have to be a computer programmer to get the gist of them. Being familiar with the technological concepts on a surface level is fine in most cases.
Evaluate the project
A crucial step in DYOR is evaluating the project itself. Start by reading and analyzing the whitepaper, which should outline the project's goals, technology, and use cases. Focus on whether the whitepaper clearly explains how the project will achieve its objectives.
Next, assess the development team and partnerships. A strong team with a track record of success and reputable partnerships adds credibility. Look for transparent information about their experience and role in the project.
Finally, examine the roadmap. A clear, realistic plan with achievable milestones indicates progress. Understand the use cases—does the project solve a genuine problem, and is there a demand for its solution?
Diversifying your information sources
Relying on a single source of information can lead to distorted views of reality. Part of doing your own research involves checking who is behind a source as well as diversifying sources. In other words, look for potential biases in every source and don’t limit yourself to using the same source all the time. For example, if someone relies exclusively on social media content, they’re unlikely to get a full picture of the project.
Here are some examples of where to find potentially high-quality sources:
The official white paper of a project
Reputable news sites
Community feedback from real users
Social media content from unbiased accounts
Remember, any person or group with a vested interest in the outcome of a project is more prone to have a biased opinion on it. Those who were early investors in a particular cryptocurrency, for example, could be more likely to paint a positive picture of that project.
Another advantage of using multiple sources to DYOR is that you can cross-reference things to ensure accuracy. When two or more independent, credible, high-quality sources corroborate the same story, it is more likely the story is more credible. However, it is still possible that news sites or social media accounts could still mislead investors, so be careful.
Conducting risk assessment
All investments carry risk, and crypto investments can be among the riskiest. To understand the risks associated with a crypto investment requires conducting a risk assessment: evaluating the magnitude of various risks that may be present.
Types of Risks in Crypto Investments
In every crypto project, there are risks to assess. The most common types of risks include:
Market risks
Crypto prices can swing wildly due to market demand, competition, or economic events. Coins with a smaller market cap tend to be the most volatile, as their lack of liquidity can result in massive moves over short timeframes.
Regulatory risks
Government regulations or legal restrictions can impact a project's ability to operate. Consider whether or not a project’s use cases and jurisdiction may affect its future potential.
Technological risks
Bugs, hacks, or failed technology can cause a project to collapse. This may be the most obvious risk but also the most difficult to assess. Doing so requires an understanding of the basics of blockchain mentioned earlier, reading white papers, and sometimes even looking at smart contract code.
By identifying these and other risks early, you can make more informed decisions. Keep in mind, however, that the risk landscape can change over time. Projects once considered technologically sound and very secure, for example, have been hacked after operating as intended for some time.
Tools and resources for effective DYOR
To make smart investment decisions in the crypto space, it’s important to use the right tools and resources. Here are some helpful ones:
Sentiment analysis platforms
Tools like Lunar Crush analyze how people feel about a specific crypto project. It scans social media, news, and forums to gauge public opinion. If most people are excited or optimistic, it could mean the project has strong potential. However, be cautious—sentiment can change quickly and isn’t always an accurate indicator.
Data aggregators
Platforms like CoinMarketCap or CoinGecko collect all the key information about various cryptocurrencies in one place. You can check market performance, trading volume, and price changes over time. These tools can be used to spot trends or see if a project has strong backing from investors.
Project trackers
These sites monitor the development and progress of crypto projects. They provide updates on a project's roadmap, team performance, and milestones. Keeping an eye on how well a project meets its goals can give you insights into its long-term potential.
When researching a project, don’t rely on just one tool. Use a combination of sentiment analysis, data aggregators, and project trackers to get a full picture.
Ongoing research and staying updated
Doing your own research (DYOR) is not a one-time task but an ongoing process. Market conditions, regulatory landscapes, and technological advancements change rapidly, making it essential to stay informed.
Regularly monitoring regulatory changes, developer roadmaps, and industry news will help you make better decisions. Regulatory updates can impact mining profitability and operational strategies. Join industry forums, follow trusted news sources, and use analytics tools to track market data. Staying proactive with your research can keep you up to date with the information you need to make decisions.
Note: All information herein is for educational purposes only, and shouldn't be interpreted as legal, tax, financial, investment or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement or offer to invest, buy, or sell any coins, tokens or other crypto assets. BitPay is not liable for any errors, omissions or inaccuracies. For legal, tax, investment or financial guidance, a professional should be consulted.