DYOR (Do Your Own Research)
The practice of thoroughly investigating a cryptocurrency project before investing, including analyzing its team, technology, tokenomics, competitive landscape, community, and potential risks. DYOR is both a personal responsibility mantra in crypto and a disclaimer often used by influencers to absolve themselves of liability for their recommendations.
“Before investing in a new token, DYOR by reading the whitepaper, checking the team's track record, reviewing smart contract audits, analyzing token distribution, and understanding what problem the project actually solves.”
Whitepaper
A detailed technical document published by a cryptocurrency project that outlines its purpose, technology, architecture, tokenomics, team, roadmap, and the problem it aims to solve. Whitepapers serve as the foundational reference for evaluating a project's legitimacy and vision. Bitcoin's original whitepaper by Satoshi Nakamoto ('Bitcoin: A Peer-to-Peer Electronic Cash System') pioneered the format.
Tokenomics
The economic model and design of a cryptocurrency token, encompassing its supply schedule, distribution plan, utility within the ecosystem, value accrual mechanisms, inflation/deflation dynamics, and incentive structures. Well-designed tokenomics align incentives between all stakeholders and sustain long-term value. Poorly designed tokenomics can lead to unsustainable inflation or wealth concentration.
Smart Contract Audit
A comprehensive security review of a smart contract's source code performed by specialized firms to identify vulnerabilities, bugs, logical errors, and potential attack vectors before or after deployment. Audits examine code quality, access controls, economic assumptions, and edge cases. While audits significantly reduce risk, they are not a guarantee of safety — exploits have occurred even in audited contracts.
Rug Pull
A type of crypto scam where project developers abruptly abandon the project and steal investor funds after attracting significant investment. Common methods include draining liquidity pools, exploiting hidden backdoors in smart contracts, selling a large pre-mined token allocation, or minting unlimited new tokens. Rug pulls are most common with new, unaudited tokens.