Bull Market Mastery: 4 Crucial Ways To Do Your Own Research (DYOR)
Over the years, the expression “do your own research” (DYOR) has permeated the crypto community. While valuable advice, it has regrettably been often reduced to a mere disclaimer, used by individuals to evade accountability when promoting their projects. This is not its intended purpose.
As we embark on a bullish market, it’s vital to understand that “DYOR” is not merely a catchphrase akin to a disclaimer – it’s a fundamental practice distinguishing knowledgeable crypto users from mere gamblers. When done diligently, DYOR serves to enlighten critical crypto decisions, mitigate risks, and capitalize on opportunities.
So, as the markets intensify, here are the four most crucial aspects to focus on.
Table of Contents
- 1. Onchain Data
- 2. Developer Activity
- 3. Community Activity
- 4. Investors and Project Teams
- DYOR Is Your Call to Action, Not a Disclaimer
1. On-chain Data Analysis
When strategizing your next significant move, it’s imperative to base your decisions on well-informed choices rooted in transparent data rather than relying solely on external opinions. This direct access ensures authenticity and transparency, empowering you to uncover insights that might otherwise be obscured. Despite the perceived technicality of data analysis, a new generation of on-chain data analytics tools has made it easier than ever to delve into the data yourself, whether you’re a seasoned crypto veteran or a newcomer.
On-chain analytics tools such as Flipside, Nansen, and Messari simplify access to crucial metrics like active user count, token distribution, and protocol interactions across the web3 space. For DeFi projects, essential data points to consider include Total Value Locked (TVL), trading volume, and liquidity pool dynamics. While most on-chain data analytics tools come with subscription fees, there are free resources available that enable you to explore the data without any financial commitment. For example, Flipside allows users to create custom queries using data from over 25 different blockchains and protocols and browse thousands of existing community-generated dashboards at no cost.
It’s important to note that no single metric provides a complete picture of a project’s traction and potential. Being open to examining the data personally will significantly contribute to your understanding of on-chain activities. While pre-configured and community-contributed dashboards can be helpful references, delving deeper into the data with your own custom queries is ideal for a more comprehensive analysis.
2. Developer Engagement
Developer engagement provides insights into a project’s technical progress and long-term sustainability. While industry reports like Electric Capital’s Developer Report offer a macro view of the web3 development landscape, delving into specific projects yields more actionable insights.
A useful starting point is examining the public documentation available on a project’s GitHub or GitLab. Although these platforms might seem daunting for non-developers, assessing project activity and gaining contextual information is still feasible. Notably, large language models (LLMs) like ChatGPT are increasingly adept at summarizing code repositories and elucidating their functionalities, aiding in discerning a project’s priorities and developments.
Furthermore, numerous projects actively seek to attract and support developers to contribute to their network. Therefore, exploring a project’s developer resources, such as their Gitbook or documentation pages, and investigating whether they offer ecosystem grants or other incentives for builders can provide valuable insights.
3. Community Engagement
Community serves as the lifeblood of any web3 project, but it’s also a realm where numerous distractions emerge. Ultimately, crypto influencers, analysts, and even regular community members or token holders have their own motives. If someone discovers a compelling market signal, it’s often in their best interest to act on it early rather than broadcasting it to the world. Therefore, all advice or optimistic sentiments should be approached with skepticism, even if they seem well-intentioned.
This doesn’t imply disregarding all signals across the crypto social scene; instead, it emphasizes the importance of filtering out noise, whether on platforms like X (formerly Twitter), Discord, Reddit, or any other popular channels. When evaluating a project’s community activity, focus on engagement metrics like the ratio of likes and comments to the project’s total follower count, along with the quality of third-party mentions.
Be vigilant for red flags such as accounts with high follower counts but low engagement, sudden spikes in followers without corresponding increases in engagement, and generic, repetitive social posts. These patterns might suggest a project’s reliance on bots or other manipulative tactics to inflate its community growth figures.
4. Investment Participants and Project Teams
The constitution of a project’s core team and its investors plays a crucial role in determining its credibility and potential for success. Projects boasting a team of accomplished founders and investors with proven, verifiable track records garner substantial validation, typically highlighting key members on their website. Delving into their respective LinkedIn profiles, social media accounts, and other personal channels provides additional insights.
It’s essential to recognize that less-known or even anonymous project teams do not inherently imply a negative outlook. However, very few subpar web3 projects manage to attract well-known team members with substantial experience in their respective fields. When scrutinizing these key players, pay attention to whether they publicly advocate for the project on their personal social channels. The manner in which these individuals communicate about the project in public can serve as an indicator of their actual involvement and enthusiasm (or lack thereof), and highly engaged team members and investors can signal a project’s strength.
DYOR Is Your Call to Action, Not a Statement of Absolution
In recent months, the crypto community has witnessed increasing optimism fueled by positive price trends and rumors of potential SEC-approved crypto funds on the horizon. However, the allure of money brings forth a surge of misinformation, scammers, and hackers during every bull market. These conditions make it challenging to distinguish high-quality projects worthy of time and resources from well-marketed vaporware. This is precisely why actively engaging in DYOR is crucial.
As we step into the next bull market, let’s embrace DYOR not as a mere catchphrase to deflect personal responsibility, but as a pragmatic process guiding our interactions in the dynamic and ever-evolving world of web3.
Jim Myers is an engineer, early-stage investor, and the CTO & Co-Founder of Flipside Crypto, a leading blockchain data analytics and business intelligence platform. Before co-founding Flipside, Jim contributed to developing core technology for companies like Mylestone, Pluralsight, and Smarterer, taking products from inception to realization. Jim’s venture into the crypto industry began in 2015, ultimately leading to the co-founding of Flipside Crypto in 2017, aimed at empowering crypto communities to generate and share data-driven insights on their preferred projects.
Jim’s dedication to building extends to the broader startup community through his developer event series, Stack Dive, and his role as an angel investor in various Boston-area startups, including AdHawk and LinkSquares. In a previous role, Jim developed advanced models to quantify risk and abnormal returns in the market for Financial Transmission Rights, a type of energy derivative.
Flipside Crypto is a leading on-chain data analytics and business intelligence platform empowering the web3 community to build with and leverage accurate, reliable data across 20+ blockchains. Their data, labeled with proprietary algorithms, enables developers and analysts to query, create, and build. The Flipside product suite offers flexibility for individuals to enterprises in accessing on-chain data. Founded in 2017, Flipside has grown to become one of the world’s foremost blockchain analytics providers, with over 50,000 analysts and key partnerships with L1 & L2 ecosystems, including Solana, NEAR, Flow, and Avalanche. Backed by leading investors such as Republic Capital, True Ventures, Galaxy Digital, M13, and more, Flipside continues to shape the landscape of blockchain analytics.
