In 2017 cryptocurrencies reached stratospheric prices, inspiring interest even among users who didn’t know what these digital assets were. For this reason millions of people decided to invest in this niche market, realizing from the beginning that the choice would be difficult due to the thousands of cryptocurrencies on the market. To simplify investments, new asset management protocols emerged such as Set Protocol. What is Set Protocol and what is TokenSets? Today we are going to introduce this DeFi project in order to understand how to invest in an intelligent way without getting lost amidst the various tokens and without wasting part of your investment in Useless Fees!
What is TokenSets?
TokenSets is the first online service that uses Set Protocol to provide a crypto portfolio management service, similar to the many services of the traditional stock exchange. Set Protocol is a DeFi project, so a protocol based on the Ethereum network that, in a trustless way, allows the creation of SETs, a single token able to offer its users the creation, management and redeem of portfolios composed of different ERC 20 tokens.
More simply put: a SET is an ERC20 token that represents a fully collateralized portfolio of other assets, including bitcoin (WBTC), Ethereum (WETH) and stablecoins (DAI). All simplified as if you were buying an ERC20 token from an exchange. These features are usually used to create index or ETF-type portfolios, although its uses can be manifold.
Getting started with TokenSets
To start creating SETs, simply register on TokenSets.com! To register and login, you can use a phone number or an Ethereum wallet of your choice, such as MetaMask, Ledger or Coinbase Wallet. Once logged in just deposit some ether to choose a SET and the amount and then create your first crypto portfolio. At the moment there are no official fees for this awesome service (something that will surely change in the future when mass adoption will arrive). If the numbers don’t seem right we suggest reading this article from their official helpdesk. Usually, they discuss very small changes that are barely noticeable.
Once the SET is created and confirmed, it becomes an ERC 20 token and can be handled as such. What does it mean for end-users? In a nutshell, it means you can transfer this SET of yours to other Ethereum wallets if you don’t want to keep it on the official TokenSets wallet. Therefore the funds are usually always yours and the TokenSets team will never have access to them. You will have to be very careful because if you lose access to the wallet where the SET is stored there will be no way to recover the lost funds. Obviously, this warning is valid for all Ethereum wallets and that’s why we always remind users to create backups of private keys.
The Net Asset Value (NAV) can be calculated in an extremely simple way: just calculate the value of all the underlying tokens using a price comparison site like CryptoCompare. Each SET is in fact 100% collateralized by its underlying assets. TokenSets, besides CryptoCompare, also uses MakerDAO‘s oracles for on-chain prices used in smart contracts.
Robo Sets and Social Trading Sets
There are two varieties of SETs available: Robo Sets and Social Trading Sets. The first ones are SETs created through complex codes and executed by smart contracts, while the Social Trading ones are SETs created and executed by human beings. Among the Social Sets, we have SETs issued by leading figures in the Ethereum world and they are all visible on the homepage of the website. Personally, I trust more experienced traders and I prefer Social Trading Sets instead of Robo Sets but everyone is free to choose which SET to use for their investments.
One of the best features of TokenSets is the ability to follow the trends of the various SETs from the homepage, dividing the stats into USD-SET, ETH-SET and BTC-SET. Then below we find their performance from the beginning until today, as well as the market cap and also the daily, weekly and monthly trends. To find the SETs of your favourite traders follow this link. For further questions and answers please follow the link to the help desk section of the website where you will find both answers and guides. Below you will also find a video that briefly explains how TokenSets works. Good luck with your investment!