Set Protocol – the leading DeFi asset management platform – has introduced its upcoming V2 upgrade with a suite of notable features.
Since its launch in August 2019, Set Protocol has captured $24 million from TVL, making it a top contender for anyone looking to take advantage of automated trading strategies called TokenSets. We’ve expressed our support for Set and his innovative approach to portfolio management, but there’s no denying that the yield farming craze has distracted attention from the protocol in recent weeks.
Now Set Protocol is preparing to release a V2 upgrade – a combination of key features focused on providing a more holistic and versatile trading experience for Set traders and Social Set creators.
“With the explosion of new DeFi protocols, assets, and return opportunities, it’s impossible for a normal person to have the time and effort to keep up.” CEO Felix Feng says DeFi Rates “Set V2 opens up passive access to the normal user and will significantly reduce gas costs as executed strategy is pooled.”
While none of the features we’ll be diving into are live, the blueprint for V2 sets the stage for enjoying a new flurry of activity in the weeks to come.
What is there to know?
All sets are based on a composition of different ERC20 tokens. So far, Set Protocol only supported highly liquid tokens like ETH, stablecoins and, to a lesser extent, WBTC. Now, with their new TWAP rebalances, the floodgates can open for a more diverse range of assets, including popular DeFi tokens like LEND, KNC, and SNX.
This comes with underlying support for yield farming, meaning sets that integrate cTokens like cUSDC benefit from COMP rewards or those that leverage Balancer liquidity benefit from BAL. Outside of the more notable strategies, we expect this to extend to emerging farming opportunities like yearn’s mStable MTA and YFI to name a few.
Most importantly, Set V2 will introduce 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 speed bump for those looking to enter positions with minimal capital. While it’s unclear exactly how much gas will be reduced, we expect these entry costs to approach the $5 mark each time they roll out.
For Set Managers, V2 also introduces Set Portfolios which offer flexible index allocations across a variety of assets and TokenSets offered on the platform. This comes with new types of trade execution, including limit orders and margin trades for experienced and more risk-savvy managers.
Last but not least, V2 will likely bring lending support for more of DeFi’s major protocols, including Aave, Curve, and Compound, as well as derivatives and liquidity from Balancer and Synthetix, among others.
For Social Traders, the opportunity to adapt their trading knowledge has never been more timely. Set Protocol is sure to create a diverse market of competitive traders capturing alpha and sharing it with their holders. With their trading fee upgrades, managers can incentivize themselves to make the most of their pool of capital, as this directly benefits their performance.
Set it and forget it
The launch of V2 signals the main goal for DeFi traders to be able to enter a position and have it passively accumulate value in different market conditions. As DeFi gets more and more complex, the average user is in a better position to leave it at all levels, and Set is a great product to benefit from the expertise of others without having to emulate each of their movements.
In the coming months, it will be interesting to see how Set competes against other platforms offering liquidity mining incentives to capture market share. Although there have been rumors that Set could one day symbolize his protocol, it’s not something we expect to see in the short term, and with that the team will have to be particularly creative about how to channel liquidity to its best performing strategies.
For all things Set and their upcoming V2 updates, follow the project on Twitter or join the conversation on Discord.