Welcome to our Deep Dive into DeFi, and in this article we focus on study of TokenSets.
- TokenSets is a platform which provides a user-friendly interface to buy Strategy Enabled Tokens (Set tokens). All functions embedded in Set token like creation, issuance, redemption and rebalancing are supported by Set Protocol;
- Set tokens are ERC20 tokens and each Set token is a representation of a crypto portfolio. The underlying strategy is called “set” which is a basket of cryptocurrencies;
- Rebalancing Token is a wrapper of Set token that enables Set to perform rebalance to align with the previous determined strategy;
- The Set protocol proposed a modified Dutch Auction for bidder to bid the over-collateral tokens in the rebalancing phase. The auction price is predefined as a function of time which the price will increase with different manners based on 3 different stages;
- Liquidity providers are incentivized to provide capital for price spread or slippage during Set rebalancing. Liquidity provider is open to all participants which means that the general user can also get profit by taking part in Set rebalancing auction
Read the full PDF version of the TokenSets Report here.