HOW TO #DYOR FOR 7 YEAR OLDS 🌝
“DYOR” translated as “Do Your Own Research” is a common phrase you’ll be seeing under a lot of Crypto tweets but do you know what to Research on?
This thread explains all you need to know before you buy a Coin
Kindly Retweet 🚀📊
“DYOR” translated as “Do Your Own Research” is a common phrase you’ll be seeing under a lot of Crypto tweets but do you know what to Research on?
This thread explains all you need to know before you buy a Coin
Kindly Retweet 🚀📊
This Topic will come in 2 threads as it’s very length (Took me a whole day to write 🥴)
There are a number of things you need to take note of when buying a new coin, this form of research is what is termed Fundamental Analysis.
There are a number of things you need to take note of when buying a new coin, this form of research is what is termed Fundamental Analysis.
It involves taking a deep dive into the available information about a Coin.
For instance, you might look at its use cases, the amount of people using it, or the team behind the project. Your goal is to reach a conclusion on whether the asset is overvalued or undervalued.
For instance, you might look at its use cases, the amount of people using it, or the team behind the project. Your goal is to reach a conclusion on whether the asset is overvalued or undervalued.
Here are highlights of Fundamental Analysis I do before buying a Coin
1. White Paper - A white paper is a document that outlines what a cryptocurrency is created to do and how it will achieve it.
A few things you should look out for in the white paper are:
1. White Paper - A white paper is a document that outlines what a cryptocurrency is created to do and how it will achieve it.
A few things you should look out for in the white paper are:
•The Description of the Project and how it’s going to provide solution to a real and relevant problem.
•The use case(s) it aims to cater to
•The roadmap for upgrades and new features
•The supply and distribution scheme for coins or tokens
•The Team
•The use case(s) it aims to cater to
•The roadmap for upgrades and new features
•The supply and distribution scheme for coins or tokens
•The Team
2. Tokenomics
Tokenomics show you the total supply of the coin, how it is distributed among the creator and the team, and how much is available in circulation.
Also if there is any information to suggest that a large number of coins has been burned or rendered unusable.
Tokenomics show you the total supply of the coin, how it is distributed among the creator and the team, and how much is available in circulation.
Also if there is any information to suggest that a large number of coins has been burned or rendered unusable.
3. Initial Distribution
Another important factor to consider is how the funds were initially distributed. Was it via an ICO or IDO or Airdrops?
What percentage of tokens were set aside for the founders and the team.
Another important factor to consider is how the funds were initially distributed. Was it via an ICO or IDO or Airdrops?
What percentage of tokens were set aside for the founders and the team.
Paying attention to the distribution should give you an idea of any risk that exists.
For instance, if majority of the supply is owned by only few addresses, we might reach the conclusion that this is a risky investment, as those people could eventually manipulate the market.
For instance, if majority of the supply is owned by only few addresses, we might reach the conclusion that this is a risky investment, as those people could eventually manipulate the market.
4. Date of release (All time low) - The date of release in comparison with the current price can suggest if a Coin is Overvalued at the time. For example if a Coin released in less than 3 days has done 5x (500%) or more, then that’s a recipe for disaster.
The Coin is obviously moving with Pump and a few major withdrawals could send it to hell in minutes. If you got in earlier then it’s time to jump out, if you didn’t then stay away from it or wait for the Fall if you must buy in.
5. All time high (ATH) - This is the highest price a cryptocurrency has attained. The all time high in comparison with the current price can tell you if you have a chance of making profit Hodling for a little while or longer or have an increased chance of losing your money.
For example: $BNB hit $686 ATH but it’s current price is at $503 almost $200 less. The chances of me making profit from here is higher.
If the Current price is the ATH then buying in at that time is just FOMO, you might need to wait a while for a retrace.
If the Current price is the ATH then buying in at that time is just FOMO, you might need to wait a while for a retrace.
6. Current Price - Without being told, the current price is what you’d compare to everything else so it’s one of the most important things to look out for. For example, a lot of people won’t want to go for $BTC at $50k+, they’d rather buy a $Bake at $6 cos’ they’d get more units.
7. Market Cap - The Market Capitalization can let you predict how many more % higher the coin can go.
While you cannot accurately predict this, you can make a good guess using the MCap.
While you cannot accurately predict this, you can make a good guess using the MCap.
For Example: $AFEN has a MCap of just $25M, I could predict that it still has a chance of doing 5-10x from here because 10x will take the MCap to about $250M and that’s kinda realistic.
(Pls note that this example is not a financial advice, it’s only for educational purpose)
(Pls note that this example is not a financial advice, it’s only for educational purpose)
We’ll be stopping here for this Part.
Liquidity, Community, Trade Volumes, and more will be covered in the next part.
Keep Notifications on so you don’t miss a thing. Cheers 🥂 📊
Liquidity, Community, Trade Volumes, and more will be covered in the next part.
Keep Notifications on so you don’t miss a thing. Cheers 🥂 📊
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