DYOR

Across the internet everywhere in the crypto space you will see DYOR (Do Your Own Research) and NFA (Not Financial Advice) usually after some meme or some comment saying to the moon or something similar.

Whether you’re new to crypto or not, here are some resources for how you can research crypto projects. This is not a complete list of all resources or even everything you should check. These are risks to investing in crypto not mentioned on this page and tools not yet mentioned on this page (send us an email at [email protected]) or post a comment to this page with your ideas, suggestions, thoughts, and feedback.

Check With Advisors:

1. Financial Advisor: Can you afford to take this risk financially?

2. Attorney: You might also want to check with your attorney as certain local governments, states, and countries have different rules as to what is legal or not in your jurisdiction, you might want to see if the coins, tokens, NFTs, crypto, etc… is legal.

3. Accountant: How can this mess up your taxes? On the one hand if you get REKT and lose money in crypto, those losses might help your tax situation. If you trade a bunch and not make much profit, you’ll have a few extra things to fill out/file when it comes to tax time and maybe a few extra dollars you owe your accountant or you need to pay for a more upgraded version of your tax prep software to fill in the extra paperwork. If you have massive gains, congratulations but prepare ahead of time for the large tax bill on all that profit.

Why are you investing?

While incredible gains are possible in crypto, they are not guaranteed and not probable. Also, keep in mind however careful you are, for one reason or another, whatever you invest in crypto, you might lose 100% of your investment. If you are ok with that, continue reading.

There are multiple incentives for investing in crypto.

1. Diversification

   This is if you want to diversify your investment portfolio and add crypto projects to your portfolio to hold long term.

2. Rewards
   You can stake crypto to earn more crypto back as a reward through some projects where you secure the network with your crypto or provide liquidity others borrow against or you place your crypto in a liquidity pool on a decentralized exchange.

3. In Search Of Massive Gains
   This is if you’re looking to turn a few dollars into many more and you’re looking for the next meme coin like SHIB.

4. Education
   You’re looking to learn more about crypto and be able to discuss NFTs, dApps, DeFi, and more with others. You might not invest much in crypto itself and are looking for returns outside of crypto either by getting a new job, a promotion at work, or impressing your friends/clients.

5. Start Your Own Project
   You’re looking to learn more about crypto to start your own project most likely to provide a secondary market for a membership you sell to your organization so people who buy membership passes you sell can then resell them to others.

If you think of other incentives, email us at [email protected] and let us know.

Keep your purpose in mind when you evaluate projects and decide whether to invest in them and/or how much or little you invest in them.

Being an early investor in a crypto project can sometimes lead to large gains. For example from March - May 15, 2021, here’s the graph of the meme token SHIB.

However, being an early investor in a crypto project can also lead to risks and potential for 100% loss of your investment.

Before investing in crypto, verify everything.

You can purchase crypto on a centralized exchange or a decentralized exchange. If you use a centralized exchange, you sign up for an account on a site like CoinBase and you are limited to purchasing the crypto they offer on their platform. The centralized exchange holds your crypto and lets you buy and sell it on their platform. Sometimes on a coin by coin basis, a centralized exchange lets you send crypto to another crypto address outside of their exchange. Keep in mind if you want to buy crypto on a centralized exchange and then send it off exchange, sometimes they won’t let you for about a week after you purchase as they wait for your deposit from your bank account or credit card to clear.

If you want more options as to the crypto tokens you could buy, the ability to stake crypto in liquidity pools, and the ability to hold, own and control your own crypto assets, you might be interested in getting your own crypto wallet. There are hardware wallets like Ledger where you have to click buttons on a device you plug into your computer to make transactions, and there are software wallets like MetaMask which is a web browser extension and crypto wallet. If you’re thinking you need to sign up for an account on a centralized exchange just to buy crypto with a credit card/debit card/etc…, you can buy crypto with a credit card/debit card/other payment methods with MetaMask.

If you’re using a centralized exchange, there are fewer risks as centralized exchanges like CoinBase vet projects before adding them to their platform, however as we’ve seen with projects like Terra Luna, even vetted widely marketed projects can fail.

From the official project website, official social media channels (watch out for fake project websites and fake social media accounts), you can find the contract address for the project if it’s so new it is only available on decentralized exchanges.

For example SHIB is the name of a crypto, and the contract address for SHIB is 0x95aD61b0a150d79219dCF64E1E6Cc01f0B64C4cE on the Ethereum blockchain.

If you are able to find the project on https://coinmarketcap.com/ from the name and contract address of the project (watch out for projects with different contract addresses but the same name), you can look to the left side of the page and see:

• Under Contracts:
  Which blockchains support the token (here it says Ethereum)
  The contract address
  Links to copy the contract address, add the coin to Trust Wallet, or add the coin to MetaMask

• Under Official links:
  See links to the project’s official website and whitepaper

• Under Socials:
  See their social media links

• Under Audits:
  See which audits were performed on the code behind the crypto token

• Under Network information:
  See if you hover over supported wallets, a few wallets that can hold the crypto token. This is not a complete list of all crypto wallets that can hold the token, just a few that are known to support the crypto token.

How new of a project are you looking for?
If you are looking for a new project, you can look at the steps a project goes through as its being released.

The newer the project, and the less steps that project has gone through the higher the risk the project is a scam, will go nowhere and will likely be worthless.

Some potential risks to check for include:
To check for the following risks you can use https://tokensniffer.com/

• Honeypot
  A honeypot token lets you buy it but you can’t sell or transfer the token to anyone else so the value keeps going up but no one (but the original creator of the token) can sell it.

• High Buy Fee/Sell Fee
  Some projects charge a high percentage of the token when you go to buy or sell the token. Sometimes the extra tokens get redistributed to all the other holders or they get sent to a wallet owned by no one (burning the tokens and reducing total token supply).

• Unverified Contract
  If a project hasn’t verified their project on a site like etherscan or bscscan, maybe it’s very new or if it’s be in existence for awhile, it’s less likely to be legitimate.

• Contract Not Renounced
  There can be legitimate reasons why a project has not renounced its contract. It just adds more risk as the contract could be modified to disable selling, change buy/sell fees, or mint new tokens.

• High Percentage of Tokens Held By Contract Creator
  If the creator of the token holds quite a few of them, they can sell a bunch and cause the price to tank. To analyze holders and links between token holders you can use https://bubblemaps.io/

• Does a Liquidity Pool Exist?
  If it does not exist, it makes trading the token incredibly difficult.

You can run additional checks at: https://gopluslabs.io/token-security/
First select the blockchain the token is on, then enter the token address and click Check.

You can run additional checks and see recent buys/sells of the token at:
https://www.geckoterminal.com/

Projects go through a few stages during their release:

Website Creation:
Legitimate crypto tokens usually have websites discussing the project and posting their whitepaper/roadmap demonstrating their future plans for the project and the utility/purpose of the project.

Twitter, Discord, or Telegram Creation:
Legitimate crypto tokens usually create at least one social media profile and post from them.

Contract Verification:
Usually legitimate contracts submit their contract for verification. Not all of these tokens are legitimate. You can look for the last 500 contracts verified at: https://etherscan.io/contractsVerified

Liquidity Pool Creation:
Usually legitimate contracts create liquidity pools on a decentralized exchange. Not all of these tokens are legitimate. You can look for new pools being created at: https://listingspy.net/dashboard

CoinMarketCap and CoinGecko Listings:
New tokens usually try to get listings on CoinMarketCap https://coinmarketcap.com/new/ and CoinGecko https://www.coingecko.com/en/new-cryptocurrencies

Central Exchange Listings:
Then tokens try to get listed on centralized exchanges. One of the first exchanges they get listed on is BitMart. You can look for new listings on BitMart at: https://support.bitmart.com/hc/en-us/sections/360000908874-New-Listings

Sometimes by buying/selling on a central exchange, the buy/sell fee might be less than what it would cost to buy/sell on a decentralized exchange. Also, the centralized exchange would look some into the contract so it’s less likely a scam. However, pre centralized exchange listings are very often less expensive because you’re buying in earlier.

CoinMarketCal:
Rumors get added to CoinMarketCal so look at the rumors and the sources cited and make your own judgment as to what crypto may be added to which centralized exchanges or which announcements are upcoming.
https://coinmarketcal.com/en/