February 10th, 2022
Author: Alli (@sonofalli)
If you scroll through almost any corner of Crypto Twitter (CT) for long enough, it is almost inevitable that you come across those four words. The slogan of sorts, which gained popularity during the COVID-19 pandemic surrounding vaccines, masks, and more, has quickly become popular in the emerging ecosystem and rhetoric surrounding Crypto and Web3. Oftentimes it is used as a disclaimer– often paired with the other infamous CT phrase: “Not financial advice.” Yet, when advice to “DYOR” appears between content on how we are “so early” or every up and coming “Web3 101'' educational thread or resource attempting to resolve the steep learning curve of crypto, what emerges is a deep juxtaposition– how can we expect individuals to thoughtfully and effectively “do their own research” if they are still learning about or early to the space?
The Blockchain allows for public and permanent absolute truth or proof. This makes the notion of researching to find facts and answers seem practical. Oftentimes though, deciphering “truth” requires that one has the technical knowledge to understand “facts” or “forensics” where they often appear in crypto: at the smart contract or data level. It is more than likely that the average person surfing CT does not have this technical literacy or foundation, and as a result, experiences difficulty attempting to distill signals from noise. In this scenario, “DYOR” can easily become dangerous advice, simply because most people cannot or do not know how to “research.” Instead, “DYOR” becomes the equivalent of “check what your favorite Twitter anon or thought leader has to say about this coin/project/NFT and decide from there.” This sensation is alarmingly unsafe and uninformed. This article aims to address such perils of “Do Your Own Research,” how they were created and are perpetuated, and how one can attempt to actually and adequately DYOR. The Rise of “DYOR”
Prior to COVID-19, the phrase “DYOR” was largely reserved to conspiracy theorist groups, and various corners of QAnon or Reddit. As the globe shifted into the pandemic in late 2020, those four little words became increasingly prevalent on social media platforms, blogs, and forums across the world. As publicizing newfound, and oftentimes contrarian, “researched” opinions on wildly complex scientific topics got rewarded on social media with catchy headlines, the world was facing another epidemic of distrust and skepticism surrounding expert opinion. The problem with this “is that most people simply don’t know how to do their own research” (These four words are helping spread vaccine misinformation - CNN). In many cases, experts in a given field have spent years or the bulk of their lifetime developing a comprehensive, extensive understanding of their field. You might be deemed an expert in your own field or passion, and it likely took time to build up that knowledge: “in our own fields, we are aware of the full suite of data, of how those puzzle pieces fit together, and what the frontiers of our knowledge is. When laypersons espouse opinions on those matters, it’s immediately clear to us where the gaps in their understanding are and where they’ve misled themselves in their reasoning” (You Must Not 'Do Your Own Research' When It Comes To Science). In addition to this, oftentimes when individuals set out to “do their own research,” they might consciously or subconsciously be looking for information or content that supports their desired beliefs or opinions– falling victim to confirmation bias rather than embarking to do research in an unbiased, scientific way.
This phenomenon, where novices are misled in their embark to “do their own research,” can result in an antithetical outcome to what “DYOR” is meant to produce. In other words, individuals can become even more misinformed on a topic than they were before they embarked on such “research,” and further, may hold those misguided perspectives even more firmly given the initial “research” they have completed: “Consider what can happen when people begin to learn about a topic. They may start out appropriately humble, but they can quickly become unreasonably confident after just a small amount of exposure to the subject” (Opinion | Skeptics Say, 'Do Your Own Research.' It's Not That Simple. - The New York Times). In psychology, this “unreasonable confidence” alongside limited exposure to, or knowledge on a subject might be explained by the “Dunning-Kruger effect,” a cognitive bias in which individuals who have minimal proficiency or knowledge in a particular field or realm deeply overestimate said proficiency and knowledge relative to factual information and criteria, or the work and achievements of others. It is also referred to by some as the “beginner’s bubble.”
For example, in a 2018 study by Dunning and Sanchez, participants were tasked with medically diagnosing hypothetical patients based on relatively limited information about the patients’ symptoms. The diseases for potential diagnosis were all fictitious and the information provided on symptoms was intentionally limited— both of these factors were meant to contribute to a base layer of uncertainty for the participants in making their assessments. During initial trials, participants portrayed low confidence when making diagnoses, but after a few correct assessments, their confidence was drastically increased to levels far above what their actual accuracy rate might entail. This study indicated that “people place far too much credence in the initial bits of information they encounter when learning something.” Further, studies have shown that with such overconfidence, beginning learners or researchers often assert knowledge or familiarity surrounding made-up terms, places, and tools (Opinion | Skeptics Say, 'Do Your Own Research.' It's Not That Simple. - The New York Times). So, with increasing evidence that doing your own research could lead to more harm and confusion than knowledge for informed decision making, why do we continue to perpetuate the notion of “DYOR?” This is not an attempt to condemn the sentiment behind encouraging individuals to stay informed and make their own decisions, but rather, to suggest that we think critically about how we encourage such information seeking and how we can better provide the tools and resources that might allow individuals to more sufficiently “DYOR” in web3. "DYOR” in Web3
The steep learning curve associated with web3 and the required technical knowledge to distill facts from where they exist at a smart contract or data level already create an environment where most people cannot “DYOR.” In the case that individuals attempt to do so, they often turn to three main references– what Station’s co-founder Tina He refers to as “TIE”: team, investors, and ecosystem. In regard to a project or coin’s “team,” one often notes whether or not members of the team have developed legitimacy in crypto– have they worked on other projects/initiatives before? Do they have an established “reputation” in the web3 ecosystem? (Think Consensys mafia, MakerDAO mafia, early Ethereum community members, etc.) If the team does not have this “reputation” or if they are anonymous/pseudonymous, this can be seen by some as a red flag. The next stakeholders for reference are investors. When it comes to investors, individuals doing their own research might observe what prominent investors or influencers are following/talking about a project, a project’s team members, etc. and make an assessment or judgment of risk from there: are these investors who have a history of engaging with prominent projects or people in web3? Again if they are not deemed “the top” investors or influencers, some can see this as a bad sign. Finally, E for ecosystem. Here, one frequently looks at things like number of twitter followers, discord members, how many people are participating in the discord, or engaging with and promoting the project, etc. Here the points of alert could be things like extremely small communities, unengaged communities, and more.
The question that then arises from each of these assessment points is, as Tina put it, “is this a new way of bottoms-up primary research? Or is this current approach to “DYOR” overly reductionist– i.e. does it completely overlook the fundamentals of business/value creation?” The reality of the situation is that many projects or products in the ecosystem could have “green flags” based on the above criteria (TIE) without having product market fit. This makes the current references for “DYOR” Tina says “the joke of the industry is that ‘building a product’ isn’t even a consideration anymore to check the above three boxes (TIE). Is this simply a reflection of the current state of the market, or will reality collapse without infrastructural substance?” In addition to this, within the TIE criteria outline, it is possible that some of the perceived “green flags” for some might be perceived as “red flags” for others depending on who is doing the “research,” their opinions of anons/investors, etc. This leads to the question of whether or not this type of assessment is truly an effective way of doing your own research. And if not, how do we build the infrastructure to aid individuals in doing so? How do we make “DYOR” a realistic endeavor in web3? Actionable Items: what do we need to actually “DYOR?”
Given what we know about the education gap and learning curve in crypto, the Dunning-Kruger effect or beginner bubble, and the current state of “research” in web3, it is evident that “doing your own research” in the realm of crypto is inaccessible to say the least. A possible takeaway from this article could be that the concept of “DYOR” in its current state is a lost cause– that we should not encourage people to do their own research because the end result will likely be more damaging than advantageous. This is not necessarily the conclusion we are aiming to come to in this piece, nor are we trying to give the impression that one must always default to the supremacy of experts in a given realm. Rather, this article aims to empower readers and builders in the web3 ecosystem to gain awareness of the perils of “DYOR” and make informed and holistic choices on what and whose perspectives they are engaging with– to “DYOR” on “DYOR” if you will. Maybe this creates a reframing of the term “DYOR” to something more along the lines of “do your due diligence” or “ensure this project/coin is not a scam.” It is critical that those participating in web3 examine and consume a range of materials from diverse and differing perspectives or opinions across the ecosystem. Ensuring this also requires that we have diverse actors and in web3. Yes, crypto is a new and highly technical industry, but that doesn’t render the expertise of non-technical, or “web2” contributors irrelevant. Rather, we need a multitude of “expert” opinions, critiques, and knowledge in the space– these perspectives are often lacking, and they can be a gift.
It is also crucial that we start building or producing more truly objective, peer reviewed traditional research surrounding important projects and topics. While some research reports or forums have emerged, they tend to air on the side of being subjective, opinionated resources rather than less biased, informational works. At the same time– and perhaps conjointly with the increased production of such resources– we need more accessible tools, educational experiences and communities, and holistic research initiatives or guides to allow for increasingly digestible insights; the Blockchain allows for public, permanent truth or proof, but most people cannot understand it in its highly technical and overwhelmingly noisy state. If we work to change this, the notion of “DYOR” might become more practical for the average user. Ultimately, web3 imagines a world in which users can have ownership over their data, assets, work, and more. To make this a reality, there are philosophies and learnings that need to be internalized as much as the technical skills being acquired. If we envision this truly decentralized, autonomous future, we must work to provide people with the resources and mediums that will allow them to become truly self-reliant—to be able to successfully “DYOR” if they so choose– free from perils and “red flags” alike.
Special thanks to Michael, Caryn, and Kristen for contributing to the edits.