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Although I’m sharing how “i do my own research” steps in this guide, this is not an exhaustive list. But if you’re a beginner in cryptocurrency, it could help you as your own Basics.
Cryptocurrency has captured World’s attention in 2021, and professional scammers have taken notice too. With crypto and blockchain technology popularity growth, a lot of people will be exposed to an unprecedented cryptocurrency scams surge.
Do my own Research or DYOR Checklist.
1- The coin.
Is this coin useful? I do not invest in purposeless coins.
Will the coin be used for its intended purpose? There are many coins advertising their purpose but are not using it once released. In my opinion, a coin that is actually fulfilling its usefulness is more likely to stay in circulation.
On which blockchain is this coin launched ? I prefer reputable blockchains to hold it for long term investment.
Are there other coins with the same symbol? Some coins chose similar symbol than existing one. It makes it confusing for everyone.
Does the coin have liquidity? The liquidity you want depends on the chain and how new the coin is. Depending on the blockchain, there are good websites. I’m using Bogged.finance to check for liquidity.
What percentage of coins are being distributed? If only a small percentage of coins are distributed, that’s a red flag for me. I’m not saying its 100% a scam, but the likelihood is higher. Also pay attention about all details regarding the token’s distribution, Is it clear and well described enough ?
2- The team.
Are the founders and team clearly identified? If you can only find few details or none about the team members, that’s a red flag.
How about the Legal Structure of the Company? Make sure the company and is registered, not a shell company overseas.
How many coins do the founders and whales have? I’m looking for the more even distribution of coins.
What is the maximum number of coins? You can then calculate what the market cap would be at a higher price and see if that is an appropriate market cap for the coin ( Multiply price by max number of coins)
How is the White Paper? Another time-consuming step, but some white papers assume you’ll skip the middle section, and fill it with garbage.
3- Social media.
How are they doing on social media? Are they pump-and-dump style (red flag) or more established? Are they focused on making money from their coin (red flag) or on the actual product?
Can i find this coin on a crypto event calendar? I try to see if the coin is listed on an event calendar like CoinsCalendar or CoinMarketCal.
This list may be seen as too much work for some people, or not enough for others.
Has the coin passed all the above steps? Splendid! You may have found a gem. Do a little research before you get started.
Two other important things to keep in mind:
New coins take time to take off. It is very possible that your investment will vary a lot (For example: From $10 will drop to $5 or $3 in that time, rise to $30, and then drop back to $5). It may just sit there for a week or two. This is completely normal.
Keep an eye on what the team is doing during that time. If there are no updates for 2-3 days, sell and get out. A good team should update their hodlers multiple times a day through multiple channels (Discord, Telegram, Twitter, etc…). It’s fine if you only get 1 update per day, but less than that is a red flag.
Disclaimer: All details found on this post, and more generally on this website (neverfomoagain.com) are for informational purposes only. I don’t provide any financial advices. Please, Do your own research before undertaking to any investment/trading actions.