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Mid Level Reading
22 Aug, 2023

TokenSets (Set Protocol)

TokenSets is a decentralized platform based on the Set Protocol that enables users to create and manage crypto portfolios. It offers various strategies and investment options to optimize portfolio performance and automate trading strategies.

What Is TokenSets?

TokenSets is a decentralized smart contract platform developed by Set Protocol that enables the creation and trading of tokenized asset baskets without requiring users to write code.

It serves as a platform for the automated portfolio management of multiple cryptocurrencies. It is designed to be user-friendly, even for those new to the crypto and decentralized finance (DeFi) space.

How to Create a Portfolio on TokenSets?

Creating a portfolio on TokenSets involves three steps, which can be quickly completed on the TokenSets website.

Once your portfolio is created, various options are available, including rebalancing, managing, and selling.

The platform is designed to simplify the user experience, with TokenSets handling the technical aspects.

Users set parameters for a Set, and the Set automatically executes trading, rebalancing, and other strategies based on the user’s predefined goals.

Simplified Strategy Investing

TokenSets offers traders an accessible way to invest in sophisticated trading strategies, such as buying and selling based on asset prices reaching certain levels.

Users can specify their desired investment amount and gain exposure to the chosen strategy.

TokenSets allows users to invest ETH or ERC-20 tokens into Set Tokens.

These Set Tokens are ERC-20 tokens representing a user’s share in a basket of assets owned by TokenSets.

The user’s share value is determined by the underlying assets in the basket.

Diversification Made Simple

Sets are digital assets that represent diversified portfolios.

They can include one or more digital assets, including other Sets.

The value of a Set is calculated based on the values of its underlying assets and their weightings.

The price of a Set is dynamically calculated in each block based on the prices of its underlying assets.

Sets enable users to gain exposure to a basket of assets in a single transaction without needing to manage and rebalance the portfolio themselves actively.

Similar to ETFs (Exchange-Traded Funds) such as QQQ, DIA, or SPY, Sets provide investors with broad exposure to an asset class by investing in a single token instead of purchasing individual assets.

Summary of the benefits of Sets:

  • Exposure to a basket of tokens without owning each token
  • Automatic portfolio rebalancing to maintain the desired allocation with each trade
  • Earning fees by providing liquidity to traders through adding or removing liquidity
  • The ability to create and share your token portfolios with others by creating custom Sets

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