Why is it essential to坚持自主研究 in the crypto market?

If you are new to the cryptocurrency trading space, you may have heard a recurring term—DYOR. This is not a code for a specific coin, but an abbreviation for “Do Your Own Research,” which means “conduct your own research” in Chinese.

This principle may seem simple, but in an era where DeFi ecosystems frequently experience major incidents in 2023, it has become the first line of defense to protect your assets.

What exactly is DYOR? Why is it crucial?

DYOR embodies the core spirit of the crypto world—everyone should think independently rather than blindly follow the crowd. In traditional investing, institutional investors conduct in-depth analysis before every bet; crypto traders should adopt the same rigorous attitude.

Simply put, DYOR means that before buying, holding, or selling any coin, you must answer these key questions:

• Do I believe in the solutions proposed by this project?
• Does it have genuine competitive advantages in the market?
• What is the background and reputation of the founding team?
• Does the project comply with regulatory requirements in major regions like the US, EU, UK, etc.?

Why does the crypto market need DYOR more?

Crypto assets are far more volatile than traditional financial instruments. The value of a project can fluctuate dramatically due to technological progress, policy changes, or market sentiment. This creates opportunities but also attracts a large number of scammers.

2023 is a year of alarm bells. This year, the DeFi sector has suffered several major blows. The most notorious is the Fintoch incident—a DeFi platform conducted a massive rug pull in May, stealing $31.6 million from users. They claimed to have support from Morgan Stanley and promised a 1% daily return. Ironically, the company’s CEO turned out to be an actor hired for the role.

Meanwhile, on the Arbitrum chain, Jimbo Protocol also experienced a $7.5 million rug pull, and Deus Finance on BNB Chain lost over $6 million due to smart contract vulnerabilities. In May alone, these frauds resulted in total losses of $54 million.

What is the common pattern behind these cases? Exploiting FOMO (Fear of Missing Out). Scammers create a sense of urgency and scarcity, causing newcomers to invest without thinking. By the time they realize, the funds have already been transferred and vanished without a trace.

Key points you need to check

Read the project documentation

You don’t need a finance degree—just be able to understand whitepapers. Looking at documentation from established projects like Bitcoin, Ethereum, Solana can help you understand what a high-quality whitepaper should look like.

Understand market positioning

What problem does this project solve? What advantages does it have over competitors? Could existing technology make it obsolete?

Perceive market sentiment

Use forums, social media, CryptoPanic, CoinGecko, and other tools to gauge community mood. Check price history and candlestick charts to identify market trends and macro influences.

Verify team backgrounds

Check the founders and core team members on LinkedIn. Do they have blockchain or crypto experience? What is their reputation in the industry?

Check real adoption data

Is this asset genuinely used? What about user numbers, daily trading volume, community activity? Tools like Chainalysis can help trace real on-chain data.

Pay attention to regulatory developments

What is the policy stance on this coin in your region? Are there any ongoing restrictive regulations? Some areas may outright ban certain tokens.

The cost of not doing DYOR

Skipping these steps can lead to risks such as:

Trusting incorrect information sources and losing assets. Not all promotions are worth following—you must learn to discern. Many scams are difficult to identify even when operated by professionals. Even legitimate but weak projects may fail to deliver on promises, but scammers have no intention of fulfilling theirs.

Their weapon is so-called “shilling”—hype and aggressive promotion—aimed at triggering your emotions. When excitement overrides rationality, it becomes hard to consider the consequences.

This is why, in 2023, so many DeFi participants fell into rug pull traps—they skipped due diligence.

Final advice

DYOR is not optional; it is essential for survival. Especially when you start building your crypto portfolio, careful evaluation and risk management can not only help you avoid disasters but also help you grow into a more rational trader.

Remember: in the crypto market, proactive research and thoughtful analysis are your strongest defenses.