DYOR

The cryptocurrency industry has historically been highly speculative and fraught with risk. Price surges of 1,000% or more are not unheard of, nor are crashes of 90%. Some sectors of the market have been driven largely by marketing hype and word-of-mouth promotion, while regulation and investor protections have traditionally been limited; crypto users often have little recourse in the case of scams or catastrophic losses.

DYOR is a reminder for individuals to conduct their own due diligence before investing in any cryptocurrency — shorthand for taking responsibility for your own investment decisions. It is one of the most repeated phrases in crypto, and one of the most ignored.

This research process, if conducted correctly, should cover both the financials and fundamentals of a project. The latter involves looking at a project’s documentation, roadmap, audits, community, team and any concrete deliverables it has produced. Analysing the tokenomics of a project means checking its valuation, supply dynamics and distribution.

Both avenues of inquiry will typically reveal red flags where fraudulent or fundamentally weak projects are concerned. These can include anonymous teams, substantial token allocations to insiders, vague technical claims, or communities that ban users asking difficult questions. Any one of these in isolation warrants caution; several together are a strong indication to steer clear.