Introducing New Assets and Trader Incentive Upgrades to Set Social Trading on TokenSets
cToken & LINK support and a new fee structure now live on Set Social Trading on TokenSets
We launched Set Social Trading just over 2 months ago with 18 Sets from 13 unique traders. Since then, we’ve added 6 additional traders and 8 more Sets to TokenSets and traders have had hundreds of thousands of dollars worth of inflows into their Sets.
The cToken and LINK support gives Social Traders more assets to choose from when creating their Sets and the all-new incentive structure gives traders increased flexibility in how they set their fees.
- Set Social Trading now supports Compound Tokens (cTokens) and LINK
- Social Traders now have 2 new fee options that align incentives with users on TokenSets — performance based and streaming fees
- 6 brand new Social Trading Sets with unique strategies are launching today
- 15 of the existing Social Trading Sets have been upgraded
Set Social Traders can now create Social Trading Sets using Compound Tokens (cTokens) such as the popular cDAI and cUSDC. This new capability supercharges existing Social Sets allowing users to earn interest when they are sitting in cash. Additionally, Social Traders are now able to create Sets that contain LINK tokens.
In order to properly align incentives between Social Set holders and traders, we’re introducing a new fee system for Social Trading Sets. Social Traders are now able to set three different fee types — entry fees, streaming fees, and performance/profit fees.
This fee is paid only once when buying into a Set and is included in the total purchase price. Entry fees can range from 0% to a maximum of 5%.
The streaming fees are fees that are paid out to traders over time based on the entire market cap of the Set (e.g. 2% of market cap over 1 year). This incentivizes traders 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.
Performance fees are fees paid out to traders for making good trades. It aligns incentives between traders and users, rewarding traders who make good trades for their users, and not allowing any fee accrual for traders who don’t perform well.
Performance fees are paid after streaming fees are accounted for. The Set is then compared to its chosen benchmark (ETH, BTC, USD etc) and the performance fee is calculated accordingly. To prevent duplication of fee payments, a high-water mark is enforced — in which profit fees are only extracted if the ETH price has exceeded the watermark.
New Fee Structure Example
Alice has a Set that is initially valued at 1 ETH, where her trading strategy is benchmarked against ETH’s performance. She sets her annual streaming fee to 2%, her profit fee to 20%, and her fee frequency to 6 months. She is able to garner 100 ETH into her Set, making her Set’s market cap 100 ETH.
After 6 months, she turned her user’s 1 ETH per Set into 2 ETH per Set, and she actualizes the performance fees. Her total fees are calculated as follows:
In total, Alice has collected 21.03 ETH in fees after a period of 6 months.
Most of the upgraded and new Social Sets launching today have an entry fee of 0%, meaning that a trader will only earn fees based on performance and streaming fees. If the trader performs well against their chosen benchmark asset by making profitable trades, then they will be rewarded with fees. Conversely, if the trader performs poorly and does not make profitable trades, then they will not earn any fees. As explained above, the streaming fees are a percentage of the Sets total market cap so the more capital in a traders Set, the more streaming fees they will earn.
It’s good to keep in mind that Set holders are able to sell their Set at any time. This means if a trader is performing poorly, a Set holder does not have to wait for any specific redemption date and can exit freely.
Social Sets That Are Changing
Many of the current Social Traders on TokenSets have opted to upgrade their existing Sets or deploy brand new ones to take advantage of the new fee options and cToken/LINK support. You can find the full detailed list of new and upgraded Sets per trader here.
Old and discontinued Social Trading Sets have been moved to a new Legacy Sets tab on the Set Explore page. Social Trader Aaron Kruger is disabling his BTC Moonshot Set and BTC Moonshot X Set while Shawn is disabling his MoFlux — Safety Net Set. This means that these Sets will no longer be maintained so holders should opt to sell these Sets at their earliest convenience.
It’s important to note that none of the Robo Sets will be changing — these changes only apply to the Social Trading Sets.
Since Set Labs cannot move user’s funds on their behalf, holders of the legacy Social Trading Set tokens will need to sell these tokens and buy into the new Social Trading Sets. To make this a painless process, we’ve detailed the quickest way to do this below.
Buying legacy Social Trading Sets on TokenSets are now disabled, but current holders can still sell these legacy Sets at any time. In addition, some Social Traders will continue to maintain their legacy Sets to allow enough time for their users to convert to their new Set.
Convert Your Existing Social Trading Set
First, go to your TokenSets Account Page to view your current Sets. Click through to the one that you wish to convert (this will take you to that Sets page).
Hit the Sell button on the Set page and choose which asset you want to sell your Set for (TokenSets currently supports ETH, WBTC, DAI, USDC and LINK).
If you’d like to avoid any trading fees or slippage, simply take note of which asset the Set is currently positioned in and select that asset to receive when selling your Set.
Once you’re ready to sell your Set, click the Preview Sell button and follow the rest of the sell process. Once the transaction is complete, you can head to the new Set page and purchase it which effectively completes the conversion.
The new Social Sets have traded out regular DAI or USDC for their cToken counterparts. Using our recently released cToken trading feature, you can purchase a Set that is positioned in cDAI or cUSDC by using ETH, DAI, USDC, WBTC, and LINK. Whichever asset you purchase the new Set with will be automatically converted into the relevant cToken and you will then be issued the Set tokens to your Ethereum wallet.
We’re excited to launch these new and improved features for Set Social Trading. We’ll be rapidly onboarding more traders over the next few weeks who will be offering more unique Sets on TokenSets.
If you’re interested in being onboarded as a Social Trader on TokenSets, please fill out this form.