A conceptual high-level due diligence checklist. Elements to consider when Doing Your Own Research—through the lens of wood, and water.
The concept of the five elements, rooted in ancient Chinese philosophy, includes wood, fire, earth, metal, and water. These elements are fundamental components of the universe and are associated with various aspects of life, from nature to human physiology. They represent dynamic interplay, each influencing and balancing the others, shaping the world on multiple levels and serving as a foundation for understanding the complexities of existence and the harmony between different aspects of life.
"Do your own research" underscores the need for due diligence and critical thinking, enabling individual crypto investors at all levels to navigate the market wisely, making informed decisions based on their fully owned understanding and analysis.
Do Your Own Research (DYOR) is a fundamental principle in the cryptocurrency and NFT world. It encourages individuals to independently investigate and evaluate cryptocurrencies and projects in a meticulous way before making investment decisions. We never outgrow the need to practice this wise habit of self-preservation. When people say "Do your own research" in crypto, we emphasize the importance of:
Relying on your own judgment and analysis rather than following the crowd or what another person says. This means not blindly trusting others' opinions or advice—no matter who they seem to be. Make sure you understand what the fuck people are talking about. Don't be afraid to ask questions. Let your utmost concern be your own successful journey; don't allow yourself to be offended or put off—turning away from an opportunity, ignoring an otherwise perhaps welcoming community because of one or a few of the many odd personalities you may encounter in the cryptocurrency space; you don't have to be friends with people you genuinely do not like, in fact doing so will invariably lead to your demise. Practice sovereignty in all your decisions.
Understanding the Project
Gaining in-depth knowledge about the cryptocurrency, its technology, use cases, team, and official community though the most direct official channels possible.
Making informed investment choices and reducing the risk of falling for scams or unsustainable projects. Select a few markers of a project's tokenomics that you understand well and can follow to get started.
Examine the utility of the project's token within its ecosystem. Tokens with clear use cases are more likely to have long-term value.
Community and Developer Activity
Evaluate the level of activity in the project's community and the engagement of its developers. Active communities and regular updates indicate a healthy project.
Audited Smart Contracts
Look for projects that have had their smart contracts audited by reputable third-party firms. Audited contracts reduce the risk of vulnerabilities and exploits.
Check if the project provides comprehensive information about its goals, team, and technology. Projects with hidden or anonymous teams are often riskier. Has the project received a grant? That's an auspicious signal that the project has merit and is thoughtfully documented.
Listen in on conversations from reputable sources that analyze a project's historical performance, including its price trends, trading volume, and market capitalization. Consistent growth or stability can be a positive sign.
Taking ownership of your investments and outcomes rather than blaming external sources for losses. To blame is to assign power away from one's self. Paying attention to your investment or setting alerts to notify you when your investments are moving up or down is your responsibility; done properly to suit your lifestyle, staying ahead of the news is easy and a pleasure and rewarding on many levels. Don't play on the fringes. Put your eyes where your money can see.
Position yourself for long-term success in the emerging technology sectors by following decentralized and open-source projects where you see utility coupled with auspicious tokenomics for healthy growth that also align with your personal principles.
For My Crypto Mystics
The wise sage moves through the altcoin forest with interest, enticed by curiosity, sustained by abundance, taking the greatest care to be observant with each step—avoiding fallen and hanging branches, harvesting ripe mushroom fruits in the shade of the deep green healthy trees, stowing fluidity in cold storage to thrive in relative comfort during cozy crypto winters.
The Source as the Root (Wood Element)
Unearthing Wisdom: Evaluating the Source
In the crypto jungle, the first rule is as old as the trees themselves: consider the source. Just as sturdy trees stand tall, reliable sources are the roots of knowledge.
Much like the growth of a mighty tree, the foundation of your knowledge is rooted in the source. The tree's wisdom thrives when nourished by the river's wisdom. So too does your understanding of crypto flourish when you delve deep into credible and reliable sources. But beware, for misinformation is like a tree without roots, falling surrounding trees with unrealized potential in the high winds of the crypto world.
Patience Like the Cycle of Water in the Crypto Market
In the world of cryptocurrencies, patience is not just a virtue; it's a strategy deeply rooted in the cyclical nature of both water and the crypto market. Just as water flows through its cycles, the crypto market experiences its own highs and lows. To understand the principles of assessments to consistently make decisions most likely to achieve long-term success, one must master the art of becoming water.
Understanding the Water's Course:
Much like water's journey from the source to the sea, the crypto market's volume surges and its community sentiment intensifies as its networks gain power with twists and turns. Understanding the market's cyclical nature, akin to the various flows of water, is paramount. Just as glacial water moves in dynamic velocities depending upon conditions, the crypto market oscillates between bull and bear cycles. This is as natural as a waterfall giving way to a gentle lagoon before cascading down a series of tidepools into a stream emptying to the ocean. Your mission, should you choose to accept it, is to educate yourself on how to navigate with skill in all cycles. Learning is fun when it's within a community whose interactions we genuinely enjoy.
In nature, water is stored glaciers and in reservoirs, waiting for the right time to be released. Similarly, in the crypto world, your Tangem or Ledger cold storage wallet acts as a reservoir of resilience. It allows you to hold onto your investments, even in turbulent times, until the market conditions thaw and liquidity best aligns with your long-term goals. Make sure your crypto is future-proof by choosing a cryptocurrency that is decentralized, widely accepted, and has global use cases like $ETH.
Weathering the Storms:
Water, as it flows into the crevices revealed by earthquakes beneath the ocean floor, can become storms; as destructive as it may seem, once you understand the mechanics you know that it could never be any other way. There are often signals to storms. The crypto market is similar, with its share of patterns and auspicious conditions. Learn to recognize patterns that relate to your interests.
Embracing the Long-Term Vision:
Just as water persists in its journey to the sea, crypto investors who stay connected to official channels can foster the tenacity to achieve their long-term vision of overall success by making timely informed decisions, not out of any sense of loyalty to any community or future promise of a coin, but by staying informed and having an exit strategy in place. The wise investor, at all levels, understands that enduring the market's fluctuations can lead to substantial gains in the end.
It’s important to note that the most gains are typically the coins that present the highest risk but that’s not necessarily bad and by doing due diligence in researching a project you’ll have the opportunity to participate in shaping the future that you want to see.
In the crypto world, as in nature, comfort belongs to those who understand auspicious cyclical patterns, and store their wealth in cold storage so that during crypto winter they can weather the inevitable storms in a position to turn insights to advantage.
Like the glacial water's journey to the sea, the path to success in emerging technologies is a continuous cycle of surges, waterfalls, lagoons, and streams. By filtering projects through these philosophical checkpoints before buying into any investment, we benefit by cultivating our understanding the current cycle of the market. In an organized way, we can review and assess worthwhile branches of potential to consider to mitigate unnecessary losses.
I hope you continue enjoy this narrative and continually recognize its wisdom as your worthwhile companion to our favorite destination: financial freedom.