Crypto Glossary

TokenSets (Set Protocol)

TokenSets is a Set Protocol-based decentralized platform for crypto portfolio management.

What Is TokenSets?

TokenSets is a new smart contract platform from Set Protocol that allows for the creation and trading of baskets in the form of tokenized assets without having to write any code. It’s a decentralized protocol that enables automated portfolio management of multiple crypto assets. TokenSets was built to be easy to use for anyone, including those who are new to crypto and DeFi

How to Create a Portfolio on TokenSets?

There’s a three-step process on portfolio creation on TokenSets’ website. After creating your portfolio, you can use a variety of options including rebalancing, managing, selling, etc.

It’s fairly easy to use with just a few things to be selected by you. TokenSets does the work on your part and you don’t have to be involved with the platform as is the case with many other applications. Users set parameters for a Set, and the Set will then automatically trade, rebalance, and execute strategies to meet the goals set by the user. 

TokenSets provides traders with a simplified way to invest in sophisticated trading strategies, like buying and selling based on the price of an asset reaching certain levels. Users can simply specify their investment amount and get exposure to a strategy.

TokenSets works by allowing users to invest ETH or ERC-20 tokens into Set Tokens. These Set Tokens are ERC-20 tokens that represent a user's share in an underlying basket of assets owned by TokenSets. The user's share depends on the value of the underlying basket of assets.

Sets are digital assets that represent a diversified portfolio. They can contain one or more digital assets, and may also contain other Sets. The value of a Set is dependent on the values of the underlying assets it contains, weighted in accordance with their weightings. Its price is dynamically calculated at each block based on the prices of its underlying assets.

Sets allow users to obtain exposure to a basket of assets in one transaction, without having to manage and rebalance the portfolio themselves. Similar to ETFs, such as QQQ, DIA, or SPY, Sets provide investors with broad exposure to an asset class by investing in a single token (rather than buying many individual assets).

Here’s a summary of the benefits of Sets:

  • Exposure to a basket of tokens without owning each token.

  • Automatic portfolio rebalancing to maintain your desired allocation with every trade.

  • Add or remove liquidity to earn fees in exchange for providing liquidity to traders. 

  • You can create your own Sets, which allows you to easily create and share your own token portfolios with others.

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