24 Apr Promoting the DYOR (Do Your Own Research) culture for crypto investing
Doing your own research (a.k.a. “DYOR”) is a common mantra that’s used frequently across the cryptocurrency and blockchain communities; and for good reason.
There’s been a serious trend in the crypto world for projects to drive hype due to large partnership announcements, and in some cases, even announcements about upcoming partnership announcements.
The award for the most notable case of the crypto announcement about an announcement goes to Justin Sun, CEO of TRON (TRX), who has been known to use this as a tactic to market his project on Twitter.
It’s safe to say that this tactic will likely have diminishing returns in the long-run, and each subsequent announcement will probably be taken less seriously; especially with memes like this floating around.
In any case, the announcements often result in serious upticks in the trading price of the corresponding cryptocurrencies.
If you question the validity of these sorts of announcements and hyped partnerships, you can be sure someone will accuse you of “FUDDING” (a.k.a. spreading fear, uncertainty, and doubt about the project). This is where the concept of DYOR (Do Your Own Research) comes in.
Promoting the DYOR culture
People on both ends of the hype for specific crypto projects tend to urge others to DYOR, which is good advice for all us of. The irony is that both sides who urge others to DYOR believe that doing so will lead others to the same corresponding conclusions.
With that said, there can be no harm done in encouraging proper due diligence, and promoting this DYOR culture will only lead to more informed investors and therefore, more value added to the overall community.
Reflecting on “ICO-mania” and the newer partnership announcements trend
As we look back on 2017 and the mania that swept the crypto community with ICO’s for hundreds of new projects within months, we can gain an insight into why 2018 may very well be the year of partnership announcements.
The connection here is that, although ICO’s will undoubtedly continue to launch in 2018 and beyond, these hundreds of young projects will all be vying for investors’ attention. They will be competing for dominance and out-right survival in what may already be characterized as a saturated market for utility tokens.
Smaller projects will use partnership announcements with big partners as one of the most powerful weapons in their battle chests to drive their token prices and gain relevance in the crypto community.
This is a negative phenomenon for two reasons:
- It taints the overall crypto market’s reputation, making projects seem untrustworthy and driven mainly by hype.
- The project teams promoting hype around their announcements will often lose credibility.
The pressure for constant updates and announcements
As the investor communities for projects wait for the launches of the projects they funded, they are constantly monitoring their investments for updates. If nothing happens for too long, the price of the tokens begins to tank.
This pressure to show constant progress weighs heavy on the shoulders of project teams and it explains why they feel the need to inform investors about anything that furthers the course of their projects. Announcement-worthy updates include things like testnets, alpha versions of platforms and wallets, rebrands, partnerships, and of course announcements.
DYOR is a continuous process for all of us
Whenever you consider investing in a cryptocurrency project, it’s important to thoroughly understand the use case behind it, the technology and execution plan, and other details such as the token economics and background of the development teams.
Furthermore, the monitoring and examination of cryptocurrency projects is not a one-time deal for investors. It’s an on-going process and investors need to stay informed about things like project milestones, changes or additions to development teams, announcements, and external threats from competing projects or changes in the regulatory environment.
Don’t use “DYOR” to defend against skepticism
Although promoting DYOR does no harm, it’s often used as a lazy “out” to the scrutiny of skeptics. I have often seen calls to “DYOR” thrown out on message boards and chat rooms as a response to critics’ questions about why certain projects are good investments. This is not very helpful.
Perhaps these people are trying to avoid giving out what can be considered “investment advice” and save themselves from possible trouble from regulators down the line with the “DYOR” response, but in my opinion that would be both lazy and majorly paranoid.
Do And Share Your Own Research (DASYOR)
If you’re going to invest the time and energy into proper due diligence for cryptocurrency projects, you should take it one step further beyond DYOR and also share your knowledge with others.
In the same way that the open source code and transparency of blockchain technology are strengths for the decentralized cryptocurrency community, so can a movement to more openly sharing our knowledge (both good and bad) about cryptocurrency projects.
Opening up more dialogue and diverse views and opinions will enrich the crypto community and work to the benefit of both investors and project teams.
In conclusion, and as a call to action, always remember to DYOR, but please also keep in mind why you should DASYOR when addressing skeptics and critics.
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