Set Protocol — the leading DeFi asset management platform — has unveiled its upcoming V2 upgrade with a number of notable features.
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Since its launch in August 2019, Set Protocol has raised $24 million worth of TVL, making it a leading contender for anyone looking to take advantage of automated trading strategies called TokenSets. We’ve been quite vocal in our support for Set and their innovative approach to portfolio management, but there’s no denying that the yield farming craze has drawn attention away from the protocol over the past few weeks.
Now, Set Protocol is preparing to release a V2 upgrade – a combination of key features focused on providing a more holistic, versatile trading experience for both set traders and social set creators.
“With the explosion of new DeFi protocols, assets, and revenue opportunities, it is impossible for the common man to put in the time and effort it takes to keep up.” CEO Felix Feng told DeFi Rate, “Set V2 opens up the normal Users have passive access and will drastically reduce gas costs as the strategy being executed will be pooled.”
While none of the features we’ll dive into are live, the V2 blueprint is preparing the log to see a renewed wave of activity in the coming weeks.
What to know
All sets are based on a compilation of different ERC20 tokens. Previously, Set Protocol only supported highly liquid tokens such as ETH, stablecoins and, to a lesser extent, WBTC. With their new TWAP rebalances, the floodgates can now open for a wider range of assets, including popular DeFi tokens like LEND, KNC, and SNX.
This comes with underlying support for yield farming, meaning that sets containing cTokens like cUSDC will benefit from COMP rewards, or those leveraging balancer liquidity will benefit from BAL. Aside from the more notable strategies, we expect this to expand to new farming opportunities like mStable MTA and yearn’s YFI to name a few.
Most importantly, Set V2 introduces gas optimization for entering and exiting different TokenSets. As any set trader knows, current sets face trading fees ranging from $15 to $50, a big boost for those looking to enter positions with minimal amounts of capital. While it’s unclear exactly how much gasoline will be reduced, we’d expect that entry-level cost to be closer to the $5 mark when it’s introduced.
Social Upgrades
For set managers, V2 also introduces set portfolios, offering flexible index allocations across a variety of assets and token sets offered on the platform. This goes hand in hand with new types of trade execution including limit orders and margin trading for the more risk-aware, experienced manager.
Last but not least, V2 is likely to bring lending to more of DeFi’s top protocols, including Aave, Curve and Compound, along with derivatives and liquidity from Balancer and Synthetix, among others.
For social traders, the opportunity to expand their trading knowledge has never been more affordable. Set Protocol is sure to create a diverse market of competitive traders who will capture and share alpha with their holders. Thanks to their trading fee upgrades, managers can incentivize themselves to do well with their capital pool as this will directly benefit their returns.
Set it and forget it
The launch of V2 signals the core goal for DeFi traders to be able to take a position and passively let it appreciate in value in various market conditions. As DeFi becomes more complex, the average user is better suited to take it to the fullest, and Set serves as a great product to capitalize on the expertise of others without having to mimic their every move.
In the coming months, it will be interesting to see how Set competes with other platforms that offer cash-draining incentives to gain market share. While rumors have swirled that Set may one day tokenize its protocol, that’s not expected in the near term, and as such the team needs to be extra creative in how to channel liquidity into its top-performing strategies.
For all things Set and the upcoming V2 upgrades, follow the project on Twitter or join the conversation on Discord.
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