Buy & Sell Sets
Learn how to buy and sell Sets via TokenSets.com
In this guide, we will walk you through the avenues to how to buy and sell Sets as an Investor. It's important to remember that Sets are represented as normal, fully compliant ERC-20 standard tokens which means that ultimately, they have the freedom to be traded in the same manner as other Ethereum based Tokens - only liquidity is the determining factor.
Crypto Kai Community Guide
Single Asset TokenSet Issuances
To buy a Set via TokenSets you first need to navigate to the particular Sets details page. For the example of the DeFi Pulse Index that would be here. Once you're on the Set details page you then have access to the buy & sell buttons pictured below to show the overlay. The following user journey is for buying a Set, but the exact same UI is used for facilitating selling a Set too via the Sell button.
From the buy and sell overlay you have presented the option to input how many of a particular Set you would like to purchase, the amount of ETH required to facilitate the transaction, your current ETH balance associated with the wallet you have connected to TokenSets and finally, a button to preview the transaction for your approval. There are two options for buying on TokenSets, TokenSets Issuance & Direct Swap orders.
- TokenSet Issuances is the operation of using your single payment token in the transaction (e.g. ETH, USDC, DAI), exchanging it for all the required tokens through decentralized exchanges, and then issuing the Set.
- Direct Swap orders are only available when there is decentralized exchange liquidity for your Set on, for example, Uniswap or Sushi. Choosing this option allows you to swap your single asset for pre-issued Sets that already exist. Not all Sets have DEX liquidity as it can be quite capital intensive to facilitate issuing and providing liquidity for the Set.
TokenSets Buy Modal
Confirm Transaction Step
Click the Submit Buy button which will then, depending on the Wallet provider you are using, ask you to confirm your transaction as seen below. This is the final step of the purchasing process and will now exchange your $ETH for the quoted amount of $DPI, all verifiable on-chain.
In a similar fashion to when you pay a wire or ACH fee when transferring money out of your bank account, you must pay a fee (called a network fee or gas fee) in order to make a transaction or execute a smart contract on any EVM chain such as Ethereum or Polygon (PoS). Regardless of the wallet you use, you will always need to pay for gas when executing transactions. Similarly, the more complex the transaction on Ethereum, the higher the gas fee. When using TokenSets, please ensure you have sufficient funds in your wallet to pay for operations such as buying or selling Sets, a common oversight for new users transacting on-chain. This network fee does not go to TokenSets but to the miners of the network as an incentive for validating transactions and securing the network.
For TokenSets Issuance, because Sets are 100% collateralised by their underlying assets when you buy a Set you are sending your ETH to a smart contract that creates exchange orders for all the underlying assets required to mint the Set token and send it back to you. In the case of buying $DPI, you send your $ETH, the contract then buys the underlying DeFi tokens to mint $DPI tokens relative to the amount of ETH you paid and sends them to your wallet. For DEX Swap orders, we simply route your transaction to where the liquidity lies for the pre-issued Sets, conduct the swap and send you your Set in return.
Sets are fully compliant with the ERC-20 token standard, therefore they can be listed and traded easily on decentralised exchanges if liquidity permits. As market-making/liquidity-providing is a capital intensive task, this is predominately seen for the largest initiatives built on top of the protocol, such as the DeFi Pulse Index, Metaverse Index and the ETH 2x Flexible Leverage Index.
In this example, we'll be using Uniswap to purchase the DeFi Pulse Index, which has ample liquidity outside of TokenSets, though to clarify, anywhere ERC-20 token liquidity is supported, so are Sets!
- Navigate to the Set details page and scroll to the key information (https://www.tokensets.com/portfolio/dpi in this case). When navigated, click on the Copy Address text. This will copy the Sets contract address to your clipboard for later.
Set Key Information
Uniswap Exchange Interface
- Click 'Select a token' on the interface and paste in the Set contract we copied earlier. This is telling Uniswap what token we want to exchange our ETH for and in this case, it's the DeFi Pulse Index.
Token Selector Interface
- Click the token that appears from the pasted contract address and fill in the subsequent interface of how many you would like to buy. In this case, we are buying 1 DeFi Pulse Index Set for 0.19656 ETH. Once happy, click the Swap button to proceed.
Filled In Exchange Interface
- View the transaction preview to confirm the details of the swap and then press the Confirm Swap button to proceed with the transaction.
Uniswap Transaction Preview
- Follow the instructions on your connected wallet to confirm your transaction and complete your swap! In this example, we are using MetaMask to confirm our swap transaction.
Wallet Transaction Confirmation
Various projects within the Ethereum ecosystem have integrated Set support with more continuously coming. This is because Sets are simply ERC-20 tokens and therefore share the exact same properties and the ease of integrating as other Ethereum based tokens. Here are some examples of ecosystem projects that have connected with the protocol.