What is set protocol
Crypto for Advanced
Set Protocol is an Ethereum-based non-custodial protocol that enables the creation, maintenance, and trading of Sets, ERC20 tokens that represent a portfolio or basket of underlying assets. Each Set manages and rebalances its portfolio on a regular basis in accordance with a strategy specified into its smart contract. Set Protocol was unveiled in November 2017, and TokenSets, its first user-facing application, was released in April 2019. DAI, ETH, WBTC, USDC, cUSDC, and LINK are presently supported by TokenSets.
TokenSets provides two sorts of sets: social trading sets with human-traded methods and robo sets with hard-coded techniques such as trend trading, range-bound, and buy and hold sets. Each Set has its own criteria for rebalancing the weight of its asset portfolio. When the rebalancing conditions for a Set are satisfied, a grace period begins that allows holders to opt out prior to rebalancing. Following the grace period, transfer of the TokenSet is halted until the rebalancing is accomplished using a modified Dutch auction procedure.
Set Protocol is intended to let consumers obtain exposure to several tokenized assets through a single, easy vehicle while paying only one Ethereum transaction fee, eliminating the fees associated with acquiring multiple tokens individually. Set then offers a largely hands-off administration experience for a user's cryptocurrency portfolio. It is designed for individuals who do not want to continually follow cryptocurrency developments or worry about manually rebalancing their portfolio. Its basket technique also gives customers with piece of mind who might otherwise be concerned about lost chances — or price volatility — if they merely held individual tokens.
To begin, use the TokenSets web application to link your Ethereum wallet to Set Protocol and fund it with a compatible cryptocurrency such as ether (ETH). The funds you put into any particular Set will automatically implement that Set's portfolio plan. When you sell your Set, you'll get your original deposit back, plus or minus any profits or losses suffered by the entire Set of ERC-20 tokens that you picked initially. Sets make purchasing token baskets simple, and the process of forming a Set is as simple. TokenSets allows anybody to construct a Set in a matter of minutes. The Set builder can set the price of their Set token and a streaming fee – a yearly charge dependent on the overall market value of the Set — as an incentive to create a Set. Set Protocol, on the other hand, does not collect any fees. The Set author solely pays Ethereum network fees to cover the expenses of creating smart contracts required to publish the Set as an ERC-20 token.
Only tokens that meet DeFi Pulse’s stringent can be added. Some of the requirements are:
- Be accessible through the Ethereum blockchain
- Be linked to DeFi protocols or dApps
- Be at least 180 days old.
- Have a high use rate
- Have enough liquid assets
- At least 5% of the five-year supply should be in circulation
- Lack of staking locking mechanisms