If you’re unfamiliar with Set Protocol, it’s an innovative decentralized finance project worth putting on your radar.
Why? It powers the creation of Sets, “smart basket” portfolio tokens that can rebalance their underlying assets, e.g. tokens representing ether (ETH) and bitcoin (BTC), both automatically per a given trading strategy and on a rolling, trustless basis.
Alas, one reason these Sets are interesting is because they’re so-called “crypto natives” — new kinds of assets that wouldn’t be possible without a cryptocurrency and smart contracts platform like Ethereum powering them.
For their many possibilities then, these basketcoins have proven increasingly popular in the Ethereum ecosystem: Set Protocol is currently one of the 15 largest DeFi projects as expressed in the total equivalent USD value locked in its contracts, a sum that’s just north of $2.6 million right now.
The protocol may be set to climb even higher into DeFi’s ranks if its creators’ latest move, the launch of “Set Social Trading” proves fruitful, too.
On January 21st, the Set team officially rolled out its new Set Social Trading offering, which its makers hailed as “the first social trading platform” on Ethereum.
As Set Protocol’s product marketing manager Anthony Sassano said in the service’s introduction, it allows users to tokenize their trading strategies for profit or to profit off of the trading strategies of other traders:
“Set Social Trading is a marketplace and network that enables traders to create and manage their own Sets, giving the public instant exposure to their trading strategies. Users can follow along with these strategies by simply minting a Set … which copies every single action the trader enacts.”
For starters, the marketplace has launched with 13 traders putting their strategies to the test, with Sassano and other Ethereum community stakeholders and traders like David Hoffman and Richard Burton being among that lot.
For these first-comers and those that will arrive later, the incentive will be in being able to set their own fees, as Sassano later explained:
“Traders can set an entry fee between 0% and 5% for each of their Sets. These fees are paid to the trader in the form of their own Sets which means they’re automatically reinvested into the strategy.”
Toward New Kinds of Possibilities
What’s so interesting about Set Social Trading is that it hints at all kinds of future iterations and innovations.
For example, Spencer Noon, a crypto investor and editor of the Our Network newsletter, mused on the program’s launch that it could unlock “a new category of personal DAOs,” or decentralized autonomous organizations, if “additional features/membership benefits” and “governance rights” get layered onto a given social trading Set.
Step 1: use case-specific token (e.g. social trading by @SetProtocol)
Step 2: layer in additional features/membership benefits
Step 3: add governance rights
Congratulations you’ve just unlocked a new category of personal DAOs.
— Spencer Noon (@spencernoon) January 21, 2020
In other words, imagine a trader launches a Set and an associated DAO where its members could help steer the trajectory of the basketcoin. Such a dynamic could open up new kinds of communities altogether.
And that’s just a taste of what may come. The Set Social Trading system is also notable because of what it points to beyond itself.
Imagine similarly-inspired platforms coming in the future arriving to tap into the social dimension in such a direct way, e.g. a marketplace where traders could tokenize and track the profits of prolific crypto collectibles breeders in games like CryptoKitties and Axie Infinity.
That’s just one example of many possible ones, but it could be apt if the non-fungible token (NFT) space continues to grow.
In the mean time, we’ll have to see how the initial group of Set’s social traders fares. Even just a few of those traders performing well over the coming months could prove to be an early game changer for the project’s traction.