One of the beautiful features of TokenSets is the ability to become an on-chain asset manager via a short 3 step creation wizard and one transaction. This frictionless design is what opens the protocol to all participants that want to manage money, whether you are are a institution wanting to offer high AUM prospect structured projects to customers, a project treasury wanting to ensure longevitiy and risk management in a transparent way or even a small group of friends that want to pool their capital and trade together in a completely trustless manner.
There are three steps associated with creating a Set, token selection, set metadata & publishing, seen below. In this guide we will go through each step in detail.
The first step in the process is selecting your starting assets for your Set and their respective allocation. So what assets can you include in your Set? Well here are a few rules to ascertain whether a token is eligible or not, please follow these guidelines:
Recognised on the CoinGecko Token List
Not a rebasing token
Not a token that enforces a transfer fee. This is where upon transaction, a portion of the sent amount of tokens is redirected to another wallet.
Must have liquidity against WETH on a DEX such as Uniswap or Sushi
It's worth noting that the vast majority of tokens are eligible to be included within a Set, however, If you are ever unsure on a particular token, please get in touch with the team on Discord and we will be happy to confirm eligibility.
You can search assets you would like to include using the provided search box. In the example below we have included WBTC (Wrapped Bitcoin), WETH (Wrapped ETH) & DPI (DeFi Pulse Index). Once you have the assets you want to include you can then configure the starting allocation of each token using the UI sliders, utilising the lock icons to fix an allocation in place whilst altering others. The max amount of tokens you can include within the starting allocation is 20, though once a Set is deployed you are free to trade the capital freely via the Set contract as if you were trading your personal wallet.
The next step on your journey will be personalising your Set with the following information:
The set name should be a memorable way for traders to identify and relate to your product. One strong example of Set naming can be found looking at the DeFi Pulse Index (DPI). The name gives the Investor information on who the creator of the index is (DeFi Pulse), the ecosystem that the index covers (DeFi), and finally, what type of product DPI is (an Index). Try think about the message you convey with your Set name as it will be at the forefront of Investors eyes.
The Set symbol is a very important aspect of Set creation, this is the ticker that will follow your Set across the ecosystem, whether it be trading on a DEX or looking at your portfolio on Zerion - the Set symbol is how Investors can identify your product from the rest, just like you would with other ERC-20 tokens.
The starting price of your set is an arbitrary number denominated in USD that your Set will start at. Performance of your Set will then be measured in comparison to this baseline figure. For example, if your Set starts at $100 and the assets within your Set (WBTC, WETH & DPI in this case) grow in USD value by 20%, your Set will be valued at $120. Inversely, if your underlying assets lose 20% in USD value, then you Set will be valued at $80.
A common question asked is, does the starting price matter? Not really. The starting price dictates the quantity of each underlying collateral asset is required to issue 1 of your Set token, but it does not impact how an investor interacts with your Set.
Here are some written example of how this looks in practice.
The final step associated with creating your own Set is publishing! Here you can confirm the details such as the Set name, symbol, allocations and start price.
After agreeing the Terms of Service, click the Publish button to preview and confirm the ethereum transaction on your wallet of choice (e.g. MetaMask). The operation to deploy a Set is gas intensive and may take a few minutes, though you can monitor and verify the progress of your transaction on Etherscan for peace of mind.
Congratulations if you have made it this far, once deployed your Set is on-chain and you are ready to start your asset management journey in the DeFi landscape. We will cover these specifics of Manager operations on Sets in the next guide, Set Management.