DYOR is a principle that saves your crypto portfolio from ruin

DYOR — short for Do Your Own Research, meaning conduct your own investigation. Behind this brief abbreviation lies the philosophy of the cryptocurrency world: every investor is personally responsible for their decisions. Forget blind faith in internet advice — in this article, we’ll show you how to turn DYOR from a vague concept into a concrete action plan.

Why DYOR is not a luxury but a necessity

The cryptocurrency market differs dramatically from traditional finance. While stocks and bonds yield interest, Bitcoin’s price can jump or drop by tens of percent in a single day. This volatility creates huge opportunities — and at the same time opens the door for scams.

Crypto scams develop at lightning speed. Fraudsters exploit two main investor weaknesses: haste and fear. They promise 1% daily returns, distribute fake recommendations from reputable firms like Morgan Stanley, hire actors to pose as CEOs. When social media buzz begins — FOMO (fear of missing out) takes over common sense. Investors open positions without questions, and money disappears.

The principle of DYOR is your shield against such developments. When you do your own research, you:

• Notice red flags: absence of a white paper, hidden founders, impossible to find info about the team
• Understand the project’s real potential, rather than believing loud promises
• Protect your portfolio from rug pulls and smart contract hacks
• Grow as a trader through accumulated knowledge

How to conduct your own research: a practical checklist

First of all, answer these basic questions:

1. What does this project actually do?
Read the whitepaper — the official document of the project. If the authors can’t clearly explain the problem and solution, that’s a bad sign. For comparison, study the whitepapers of Bitcoin, Ethereum, or Solana — these are industry quality standards.

2. Does it occupy a unique position in the market?
Understand how the project differs from competitors. Does it have a technological advantage, or is it just copying existing solutions? Is its technology outdated compared to newer alternatives?

3. Who is behind it?
Research the team on LinkedIn, check the founders’ track records. Do they have experience in the crypto space? What’s their reputation? People who have already built successful projects tend to be more trustworthy.

4. How is the project developing in reality?
Look at active user numbers, transaction volume, community engagement. Tools like Chainalysis can track actual blockchain activity. If no one is using the project, that’s not a good sign.

5. What does the law say?
Check the legal status of the cryptocurrency in your country or region. Are new regulations being prepared? In some places, certain assets are outright banned. This can seriously affect liquidity.

Tools for analysis: your researcher’s arsenal

You don’t need to be a finance genius. Use ready-made tools:

• CryptoPanic — follow news and community sentiment in real time
• CoinGecko — gather project data, charts, and metrics
• Chainalysis — analyze blockchain activity directly
• Twitter/X and forums — engage with the community, listen to expert opinions

The key is to verify information from multiple sources. One blogger might be mistaken, but if three independent analysts say the same thing — that’s a picture.

When investors forget about DYOR: real stories

Story 1: Fintoch in May 2023
Platform promised 1% daily income and supposedly had Morgan Stanley support. Turns out, that was a lie. The CEO was an actor. $31.6 million was stolen.

Story 2: Jimbo Protocol on Arbitrum
A rug pull where developers simply ran off with $7.5 million. In May 2023, this project entered the top 10 financial disasters.

Story 3: Deus Finance on BNB
$6 million disappeared due to a smart contract vulnerability exploited by hackers. This was part of a wave of hacks in 2023.

All three stories are similar: no one did DYOR. Everyone believed promises instead of checking facts.

Advice for beginners: balancing caution and opportunity

DYOR doesn’t mean obsessively analyzing every project for months. It means spending 15–30 minutes on reasonable checks before investing. Read the documentation, review the team, check community activity.

Remember: if something sounds too good to be true — it probably is. Nobody gives away 1% daily returns for free.

The crypto market is full of opportunities, but also full of traps. DYOR is not advice — it’s your insurance. Invest only in projects you understand and have verified. That way, you’ll not only protect your capital but also become a more experienced trader with each purchase.