When it comes to accessing sophisticated trading strategies, many Ethereum trades have turned to Set Protocol as the leading platform to leverage technical indicators in a passive manner.
The San-Fransisco based company has deployed over 50 unique combinations – called Sets – to date, including the recent launch of Social Trader – a way for experienced traders to share their knowledge with the rest of the ecosystem.
Here’s a quick overview of how it works:
“If the LINK daily RSI falls below support at 45 in an existing uptrend (price loses momentum), LINKRSI rebalances LINK into cash (USDC) and if the LINK RSI breaks above resistance at 55 in an existing downtrend (price regains momentum), LINKRSI rebalances back into ETH. LINKRSI uses the daily RSI which means there is no confirmation period for rebalance signals.”
Why Does This Matter?
In particular, the Set team has been very cautious about which assets they choose to support, as to ensure they are staying within regulatory guidelines as a US-based corporation.
Seeing as LINK has long-served as a token with one of the most dedicated communities, it should come as no surprise that this was the first ERC20 to be integrated into Robo Sets on the platform.
Over the next few weeks, we expect LINK to make it’s way into a number of Social Sets, further increasing the competition for traders to capitalize on short-term price swings in an attempt to stack more LINK.
Taking this a step further, we can view this as the gradual unveiling of more sophisticated Sets, meaning more obscure assets such BAT, ZRX or REP may be added in the near future. With this, it’s entirely possible to consider Sets which contain a basket of assets like a “DeFi Set” which rebalances relatively to niche indicators like Total Value Locked (TVL).
For those unfamiliar with LINK, it’s worth providing a quick overview on the ChainLink ecosystem.
As an industry-leading oracle provider, ChainLink oracles provide readable data points for web3 services – namely USD-based price feeds for popular assets like BTC and ETH along with fiat currencies like AUD and GBP.
Without going into too much detail, oracles like ChainLink allow smart contracts to relay data and make decisions based on that data (such as price) – a crucial component to many aspects of the larger DeFi ecosystem.
ChainLink’s native token – LINK – is used to compensate oracle providers for relaying accurate data, with the expectation for users to be able to stake LINK in the future to act as an oracle provider in a permissionless fashion.
As it relates to Set Protocol, ChainLink is providing a LINK/USD oracle which aides in the rebalancing of LINK-specific Sets.
With the recent launch of a new onboarding guide, it’s evident that 2020 is shaping up to be a big year for Set Protocol.
As the project continues to roll out more educational material, it’s likely that many new users will look to Set Protocol as an entry point for one of DeFi’s many exciting opportunities.
If the introduction of LINK-based Sets has you excited as us, we encourage you to check out the latest Set Ambassador Program for your chance to be featured by the Set brand.
In the meantime, we’ll be keeping a close eye on all things Set via their official Twitter.
Cooper is the Editor of DeFi Rate. He is an ambassador of Set Protocol and an active contributor to MetaCartel where he seeks to find emerging consumer-facing applications that propel the Ethereum ecosystem. He often works with projects as the Director of Fitzner Blockchain Consulting where he coauthors the weekly publication Token Tuesdays.
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