Set Documentation
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Protocol
V1 Protocol
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Overview
Welcome to Set's Developer Documentation. The pages contain resources and guides for the Set Protocol V2 system.
Introduction
Set Protocol is an EVM-based asset management platform that leverages existing Decentralized Finance protocols to provide financial infrastructure to everyone. The primary use case on Set Protocol is the bundling of crypto-assets into fully collateralized baskets, represented as ERC20 tokens on the native blockchain. These Set tokens act as structured products that follow the manager's strategy, allowing others to replicate an identical strategy by simply holding the Set.
The underlying contract that enables management of the Set supports external integrations with exchanges, lending platforms, automated market makers and asset protocols, and also invites more advanced strategies such as yield farming and margin trading.
Today, some of the largest structured products by AUM (assets under management) have been built using the Set Protocol, including the DeFi Pulse Index ($DPI) and ETH 2x Flexible Leverage Index.
DPI
User Roles
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Investors
Investors allocate capital, receiving the Set tokens that represent their share in the portfolio or structured product. Investors retain full custody of assets as funds are inaccessible to managers outside of managing the Set via the underlying smart contract.
Managers
Managers maintain and rebalance structured products in the form of Sets to satisfy their asset management needs. Managers can offer their products to many different customer profiles: whether they manage Sets as investment opportunities for individual or organizational investors, or they manage DAO treasuries in need of an on-chain, transparent instrument. Managers can use streaming fees to monetize their products to achieve profitability as their products grow.
Developers
Developers build the next generation of financial applications using the Set Protocol layer as their base and achieve their objectives faster. Whether you are running an algorithmically rebalanced cryptocurrency index or a long-only large investment portfolio that caters to an existing customer base - the Set Protocol has limitless opportunities on what innovative projects can be built, with TokenSets being a core example.
Example Use Cases
Structured Products
Institutions or entities can create structured products for customers with a refined methodology behind them that fills a market need or niche. The largest crypto indices today are built on top of the Set Protocol infrastructure
Social Trading
Anyone can become a social trader using our V2 Portfolio Sets that give the Set manager the ability to replicate their trading strategy on-chain, build assets under management and monetise their clients.
TokenSets gives a user-friendly experience to Set managers to perform these actions, but also a frictionless experience for clients to invest into your Set too.
Treasury Management
Ethereum ecosystem projects are trusting Set Protocol to manage project treasuries in a trustless, decentralised manner. One example of this is YamHOUSE, which is an actively managed portfolio by Yam.Finance DAO with the aim to achieve long term capital appreciation to support the growth and development of the Yam.
Protocol Fee Structure
As a Manager, there are currently no fees for utilizing the Set Protocol directly for your business products outside of standard Ethereum network gas fees. If interacting with Set Protocol via the TokenSets UI the only fee currently invoked is a 0.10% fee on trades executed through the trade module on the UI.
As an Investor, in addition to the standard Ethereum network fees, you might encounter a 'streaming fee' on Sets, which is the manager's way of monetizing their product.
Streaming Fees
The streaming fees are fees that are paid out to Set managers over time based on the entire market cap of the Set (e.g. 2% of market cap over 1 year). This incentivizes managers to increase the value of their Sets over time for their users.
The streaming fee is calculated linearly over the lifespan of the Set. For example, if a Set has a 2% streaming fee and 6 months has passed, 1% of streaming fees would have been collected.
Last modified 24d ago