DYOR

Do Your Own Research (DYOR) is a widely used acronym in the digital asset space, urging investors to independently verify information before committing funds to any project or token.

What is DYOR?

DYOR emerged as a critical mantra in the digital asset community around 2016-2018, during the initial coin offering (ICO) boom when over 80% of projects were later identified as scams or failures, leading to billions in investor losses. For instance, high-profile frauds like OneCoin, which raised over $4 billion without a functional blockchain, highlighted the dangers of relying on unverified hype from promoters or influencers. Today, DYOR serves as both a reminder of personal responsibility and a legal disclaimer in social media posts, where users promote tokens but explicitly state that their views are not financial advice, as seen on platforms like X (formerly Twitter) and Reddit.

In practice, DYOR involves concrete steps to evaluate a digital asset’s viability, such as reviewing the project’s whitepaper for technical details, auditing smart contract code via tools like Etherscan or Solana Explorer, and analyzing on-chain metrics including token supply (e.g., circulating vs. total), liquidity on exchanges like Uniswap, and transaction volume. Investors should also scrutinize the development team’s credentials—such as GitHub activity or past projects—and monitor for red flags like anonymous founders or unrealistic yield promises, as exemplified by the 2022 Terra Luna collapse, where algorithmic stablecoin UST depegged from $1, wiping out $40 billion in value due to unaddressed risks in its collateral mechanism. Resources like CoinMarketCap or Messari provide verifiable data on market cap and tokenomics to support this process.

Ultimately, while DYOR cannot eliminate market volatility—digital assets remain high-risk with average annual returns varying widely (e.g., Bitcoin’s 230% in 2020 vs. -65% in 2022)—it empowers informed decisions, reducing exposure to rug pulls where developers drain liquidity pools, which affected over 1,300 projects in 2023 alone according to Chainalysis reports.