Set Protocol provides access to sophisticated trading strategies by purchasing ERC20 tokens. Whereas other trading strategy platforms would require traders to execute trades on secondary exchanges, Set Protocol allows users to hold unique tokens which are automatically rebalanced relative to their intended strategy.
Set Protocol used native tokens called Sets which contain different parameters, assets and rebalancing strategies. By providing a marketplace, Tokensets, for Sets to be bought and sold, non-technical traders can enter and exit sophisticated trading strategies in a few clicks.
Set Protocol also offers Social Trading – an area for sophisticated traders to tokenize their own strategies – and earn rewards when their Sets are traded by the community at large.
Set Protocol was founded in 2018 and launched on Ethereum mainnet in April of 2019. The SF based company – Set Labs – consists of a robust team of developer and product strategists, including Anthony Sassano – cofounder of EthHub. Led by Felix Fang, the team brings years of experience to the table with CPO Inje Yeo and CTO Alex Soong having worked at successful startups like 21.com (aka Earn.com) GoDaddy, Square, Apple and AirBnb just to name a few. Set Labs hosted a $2M Seed Round lead by Craft Ventures in December of 2018.
Why Set Protocol?
Set Protocol offers a variety of trading strategies, ultimately providing investors of different appetites with Sets that suit their appetite. These strategies, pictured below, are intended to capture different trading conditions using indicators like Relative Stength Index (RSI) or Moving Averages (MAs), all of which feature unique assets such as ETH, DAI, cUSD, wBTC and more.
Sets have been known to outperform the market during bearish climates, ultimately playing into the project’s mission of allowing Set token holders to earn ETH during negative market swings through passive holdings.
With the introduction of Compound cTokens, certain Sets now rebalance into an interest-earning asset, effectively allowing the token holder to earn passive income whenever the Set is in a stable period.
Now that Set Protocol has laid a foundation with over 20 unique Sets and counting, it’s like that 2020 will begin to introduce more niche Ethereum-based assets, thus allowing the protocol to expand to a wider range of use cases.
How Does it Work?
To get started, visit tokensets.com. Like most DeFi products, users connect a web3 wallet like MetaMask to start trading.
When navigating to the “Explore Sets” tab, user can select from a variety of Sets, all with a unique value. Each Set has it’s own value with a dedicated page describing which conditions the trading strategy favors. Every description also has a “learn more” page to provide more insight on what situations a given Set favors.
To purchase a Set, simply press “Buy” and enter the number of tokens desired. This will prompt a transaction in the web3 wallet which must be approved.
Once acquired, all existing Sets can be seen under the User Profile on the top right under “Account”. Sets are rebalanced automatically, meaning there is no action required on the users end to obtain the new balanced assets of the underlying token.
For more sophisticated traders, Set Protocol allows users to participate in Rebalancing Auctions, effectively allowing traders to capture rebalanced assets at a discount to market price if timed properly.
How to Get Involved?
To keep up with all things Set Protocol has to offer, follow them on Twitter. The project is also very thorough in their blog posts, regularly conducting interviews with top traders creating Social Sets.
As for more day to day discussion, the Set Telegram group has a suite of moderators well versed in answering any quick questions users might have.
We expect Set Protocol to be a leading DeFi asset exchange in the coming year and hope this review has been helpful in understanding the core tenants behind the project.