NOTE: This post is a follow up to this article, which addresses the exploit of the deprecated USDAPY and WBTCAPY Sets. For more information regarding the exploit, please refer to it.

Background Information

In response to last month’s security breach, where an exploiter compromised a Set-owned hot wallet and gained control of the ETH USD Yield Farm (USDAPY) and ETH WBTC Yield Farm (WBTCAPY) Sets, we have developed a comprehensive recovery plan to assist legitimate holders in redeeming any remaining funds from these Sets.

This blog post outlines the steps necessary to facilitate the recovery process while ensuring the attacker can no longer claim rewards or exploit the Sets further.

Funds Rescue Overview

The rescue solution involves the deployment of a Recovery Contract that existing holders can transfer their Sets to, as well as a new SetTokenCreator that only re-enables Sets to support the withdrawal of funds.

After the Sets are transferred to the Recovery Contract, Set Labs will use the new SetTokenCreator to atomically re-enable Sets, redeem them, and finally disable them again. Once this is done, users will be able to claim their share of the recovered collateral from the Recovery Contract.

The rescue process entails several steps:

1. Users deposit their Sets into the Recovery Contract by performing the Pre-Rescue Steps [Deadline: May 31st, 2023]

2. Set Labs will call the smart contract function to enable withdrawals [June 1st, 2023]

3. Set Labs will inform users that withdrawals are enabled through its social media channels [June 2nd, 2023]

4. Users will be able to perform the Post-Rescue Steps and recover funds [June 2nd, 2023 onwards]

We want to stress that after June 1st, 2023, the Set Labs Multisig will lose its owner rights over Set Protocol V2 (as outlined in this post), rendering it incapable of executing Step 2 (enabling withdrawals) after that date.

Therefore, it is crucial that users adhere to the May 31st, 2023 deadline to perform Step 1 (Pre-Rescue), as that will be the only window of opportunity to deposit their Sets into the Recovery Contract. If these actions are not performed by this date, users will NOT be able to recover their funds after withdrawals are enabled.

For Step 4 (Post-Rescue), there is no deadline and users will be able to withdraw their funds at any time as long as they executed Step 1 (Pre-Rescue) before the deadline.

ETH USD Yield Farm Set (USDAPY) Recovery Instructions

Pre-Rescue

1. To recover your ETH USD Yield Farm Sets start by following this link to the Set’s Etherscan page. This should lead you to the “readContract” section that looks like this:

2. Next, get the amount of Sets your account owns by calling “balanceOf” and passing in your address:

3. Copy the resulting value (you will want to save this value somewhere since it will be used multiple times!) and navigate to the “Write Contract” section:

4. Connect your wallet by clicking on the “Connect to Web3” button at the top of the section. Follow the prompts to connect your wallet

5. Go to the approve function and input 0x240c9Eb94fda59BD0F7B0C6fe22cf1a22EE12A94 in the “spender” field, and the amount you copied in the previous step into the “amount” field

6. Submit the transaction

7. Once the transaction has been mined navigate to the APYRescue “Write Contract” page found here

8. Make sure your wallet is still connected. If not, reconnect it the same way you did in Step 4.

9. Now navigate to the “deposit” function and again input the amount from Step 3 into the “amount” field

10. Submit the transaction

This will transfer your ETH USD Yield Farm Sets into the Recovery Contract where they will stay until redemption is initiated. You can check that everything was executed correctly by calling the “shares” function on the Recovery Contract (in the “Read Contract” section) and passing in your address. This value should match the same value copied in Step 3.

Post-Rescue

1. Return to the “Write Contract” page of the Recovery Contract here
2. Connect your wallet like you did previously
3. Call “withdrawRecoveredFunds”. There are no inputs to this function!

4. Once the transaction has mined you should see an increase in your WBTC and WETH balances!

ETH BTC Yield Farm (WBTCAPY) Set Rescue Instructions

Pre-Rescue

1. To recover your ETH BTC Yield Farm Sets start by following this link to the Set’s Etherscan page. This should lead you to the “readContract” section that looks like this:

2. Next get the amount of Sets your account owns by calling “balanceOf” and passing in your address:

3. Copy the resulting value (you will want to save this value somewhere since it will be used multiple times!) and navigate to the “Write Contract” section:

4. Connect your wallet by clicking on the “Connect to Web3” button at the top of the section. Follow the prompts to connect your wallet.

5. Go to the approve function and input 0x28fC309101eE182eD9fdCE1Bb03b6a4525924728 in the “spender” field, and the amount you copied in the previous step into the “amount” field

6. Submit the transaction

7. Once the transaction has been mined navigate to the APYRescue “Write Contract” page found here

8. Make sure your wallet is still connected. If not, reconnect it the same way you did in Step 4.

9. Now navigate to the “deposit” function and again input the amount from Step 3 into the “amount” field

10. Submit the transaction

This will transfer your ETH BTC Yield Farm Sets into the Recovery Contract where they will stay until redemption is initiated. You can check that everything was executed correctly by calling the “shares” function on the Recovery Contract (in the “Read Contract” section) and passing in your address. This value should match the same value copied in Step 3.

Post-Rescue

1. Return to the “Write Contract” page of the Recovery Contract here
2. Connect your wallet like you did previously
3. Call “withdrawRecoveredFunds”. There are no inputs to this function!

4. Once the transaction has mined you should see an increase in your WBTC balance!

Additional Support

As we work diligently to resolve this issue and support our users in redeeming their funds, we encourage you to reach out to our dedicated channels for assistance and updates throughout the process. Our team is committed to providing the necessary guidance and support to ensure a smooth recovery experience for all affected users. Please don’t hesitate to contact us with any questions or concerns you may have.

FAQ

Have you been able to recover any of the lost funds from the exploit?

No. We continue to work diligently and with third parties to recover these funds, but we have not been able to contact the exploiter to negotiate a return.

We’d like to remind the attacker that we are offering the following conditions if funds are returned:

• A 20% bounty over the totality of stolen funds
• The assurance that Set will not pursue any legal action if at least 80% of the funds are returned

Again, we urge the attacker to get in touch with us through any of the channels below to coordinate the return of the funds and avoid further escalation of this issue with law enforcement.

• Email: recovery@setprotocol.com
• Twitter: https://twitter.com/SetProtocol
• Discord: https://discord.com/invite/RurtmJApqm

Resources:

• Set Documentation

[ACTION REQUIRED] USDAPY and WBTCAPY Updates: Funds recovery instructions and next steps was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

We would like to address the recent incident that has affected two Sets that were built on Set Protocol and deprecated in 2020, and provide you with the necessary information and reassurances. We understand that this may be a concerning situation, and we are committed to maintaining transparency as we work towards recovering stolen user funds.

Incident Summary

An internal Set hot wallet, which managed the deprecated ETH USD Yield Farm (USDAPY) and ETH WBTC Yield Farm (WBTCAPY) Sets was compromised by an exploiter, resulting in a direct combined loss of approximately $49,000.

Through our investigation, we uncovered that the attacker had been slowly siphoning funds from the Sets by transferring ownership of the Sets, setting the maximum streaming fee, and periodically actualizing the fees.

As of writing, these Sets have:

• USDAPY: Total Value Locked approximately $78,000 belonging to 153 holders
• WBTCAPY: Total Value Locked of approximately $28,000 belonging to 74 holders

Actions To Date

Upon discovering the incident, we took immediate action to contain the situation and minimize the damage:

1. We froze operations of the affected Sets from Set Protocol V2, effectively preventing the hacker from extracting more value. However, this also means that users are currently unable to redeem funds contained in the Set. Please rest assured that the existing funds are safe.
2. We have confirmed that no other Sets have been, nor will be, compromised.
3. We have contacted law enforcement and are working closely with officials and centralized exchanges to ensure all funds are returned

Hack Bounty

In an effort to resolve the situation and encourage the return of the stolen funds, we are offering the following conditions to the attacker:

• A 20% bounty over the totality of stolen funds
• The assurance that Set will not pursue any legal action if at least 80% of the funds are returned

We urge the attacker to get in touch with us through any of the channels below to coordinate the return of the funds and avoid further escalation of this issue with law enforcement.

• Email: recovery@setprotocol.com
• Twitter: https://twitter.com/tokensets
• Discord: https://discord.com/invite/RurtmJApqm

Community Q&A

• I’m a holder of one of the above Sets; when will I be able to redeem remaining funds?

We are currently defining the best way to allow existing holders to withdraw any remaining funds without compromising their security. As part of our ongoing communication efforts, we will inform you of any advances in this regard.

• I’m an investor in other Sets; can any of my funds be compromised?

No. As mentioned, only the above two Sets were compromised due to the Set wallet exploit. Holders of other sets can rest assured that their funds are safe.

Next Steps

Going forward, we will continue to keep our community informed of new developments in a transparent and timely manner as we work towards recovering the stolen funds. We will continue to use our main channels (Medium, Discord and Twitter) for this.

We understand that this incident may have raised concerns and questions. As always, we’re here to help and provide any necessary support. If you have any queries or need assistance, please don’t hesitate to contact us through the above channels.

We appreciate your understanding and support as we work diligently to address this issue and ensure the ongoing security of our platform.

Addressing the USDAPY and WBTCAPY Sets Exploit was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

We’d like to inform the community that neither Set Protocol V2 nor the TokenSets user interface will continue to be under development by Set Labs, and that we will be taking certain measures to fully decentralize the protocol.

From the inception of Set Protocol V2 in 2020, our focus has been on creating a unified interface that allows anybody to build non-custodial and fully decentralized funds and structured products, while enabling thousands of investors to benefit from easy access to innovative DeFi products.

We’re proud to have made these tools accessible to DeFi users around the world, and are thankful to those who have supported us along the way. Although this was a hard decision, we ultimately believe that the following actions are in the best interest of the protocol and our community.

What measures will we be implementing?

Relinquishing Set Labs’ Multisig owner rights over Set Protocol V2

Firstly, we will transfer all owner rights from the Set Multisig owned by Set Labs to a 0 address. This means the Set Labs multisig will no longer be able to manage or make upgrades to the protocol, and that it will become fully decentralized.

TokenSets website deprecation and deployment to IPFS

Additionally, we will deprecate the existing TokenSets website and redeploy it to IPFS, with an interface that will allow users to easily withdraw or redeem funds from any Sets in which they may hold funds.

Discord Community

Lastly, although our Discord community and other social media platforms will remain open, they will no longer be moderated or maintained by Set team members. This also means that no customer support will be offered to existing holders or managers of Sets.

Next Steps

In order to allow community members to take any necessary actions, the above measures will be executed on May 31st, 2023. In the meantime, please keep an eye on our main communication channels (Medium, Discord and Twitter) for any new announcements.

We realize that these changes may cause disruption for some of our users, and we’re committed to supporting you during this transition. We are here to answer any questions you may have or provide any necessary support during this time. Please don’t hesitate to contact us through the contact information provided below if you need assistance.

FAQ

What happens to existing Sets deployed on Set Protocol V2?

These will continue to function as usual, as Set Protocol V2 will continue to operate autonomously.

How can I sell my Sets or redeem the underlying assets?

Until the deprecation date, users can continue to use TokenSets to withdraw funds from existing Sets. Just visit www.tokensets.com, search the Set you want to withdraw from and choose “Sell” or “Redeem”.

Will I still be able to create Sets using Set Protocol V2 after the deprecation date?

Yes, as Set Protocol V2 will continue to function autonomously. Those who want create new Sets may still do so using the smart contracts. For more information, visit our documentation.

I think I may still have assets on Set Protocol V1. What’s its status and how can I recover any assets remaining in old V1 Sets?

Set Protocol V1 was deprecated on April 6th, 2021 (you can read our original announcement here).

If you have assets in any deprecated Sets that were launched on Set Protocol V1 and wish to redeem them, we recommend following the instructions contained in this article to manually redeem your Sets using Etherscan or MyEtherWallet.

Contact Info:

✉️ alejandro@setprotocol.com

Twitter | Website | Discord

Resources:

• Set Documentation

Announcing the deprecation of Set Protocol V2 and TokenSets was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

We would like to address the recent incident that has affected two Sets that were built on Set Protocol and deprecated in 2020, and provide you with the necessary information and reassurances. We understand that this may be a concerning situation, and we are committed to maintaining transparency as we work towards recovering stolen user funds.

Incident Summary

An internal Set hot wallet, which managed the deprecated ETH USD Yield Farm (USDAPY) and ETH WBTC Yield Farm (WBTCAPY) Sets was compromised by an exploiter, resulting in a direct combined loss of approximately $49,000.

Through our investigation, we uncovered that the attacker had been slowly siphoning funds from the Sets by transferring ownership of the Sets, setting the maximum streaming fee, and periodically actualizing the fees.

As of writing, these Sets have:

• USDAPY: Total Value Locked of approximately $78,000, belonging to 153 holders
• WBTCAPY: Total Value Locked of approximately $28,000, belonging to 74 holders

Actions To Date

Upon discovering the incident, we took immediate action to contain the situation and minimize the damage:

1. We froze operations of the affected Sets from Set Protocol V2, effectively preventing the hacker from extracting more value. However, this also means that users are currently unable to redeem funds contained in the Set. Please rest assured that the existing funds are safe.
2. We have confirmed that no other Sets have been, nor will be, compromised.
3. We have contacted law enforcement and are working closely with officials and centralized exchanges to ensure all funds are returned.

Hack Bounty

In an effort to resolve the situation and encourage the return of the stolen funds, we are offering the following conditions to the attacker:

• A 20% ($10K) bounty over the totality of stolen funds
• The assurance that Set will not pursue any legal action if at least 80% of the funds are returned

We urge the attacker to get in touch with us through any of the channels below to coordinate the return of the funds and avoid further escalation of this issue with law enforcement.

• Email: recovery@setprotocol.com
• Twitter: https://twitter.com/tokensets
• Discord: https://discord.com/invite/RurtmJApqm

Community Q&A

• I’m a holder of one of the above Sets; when will I be able to redeem remaining funds?

We are currently defining the best way to allow existing holders to withdraw any remaining funds without compromising their security. As part of our ongoing communication efforts, we will provide updates of any advances in this regard.

• I’m an investor in other Sets; can any of my funds be compromised?

No. As mentioned, only the above two Sets were compromised due to the Set wallet exploit. Holders of other sets can rest assured that their funds are safe.

Next Steps

Going forward, we will continue to keep our community informed of new developments in a transparent and timely manner as we work towards recovering the stolen funds. We will continue to use our main channels (Medium, Discord and Twitter) for this.

We understand that this incident may have raised concerns and questions. As always, we’re here to help and provide any necessary support. If you have any queries or need assistance, please don’t hesitate to contact us through the above channels.

We appreciate your understanding and support as we work diligently to address this issue and ensure the ongoing security of our platform.

Addressing the USDAPY and WBTCAPY Sets Exploit was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

At TokenSets, we have always been committed to providing the best possible user experience for our users. Since the launch of Set Protocol V2 in 2020, we have worked to offer an all-in-one interface that allows asset managers to create non-custodial and fully decentralized funds and structured products while democratizing the access to complex invesment strategies to thousands of investors. However, as our platform has evolved, we have come to realize that simplifying the feature set in TokenSets UI will greatly benefit our users.

With this in mind, we have decided to focus TokenSets primarily as a Set explorer and will be discontinuing the Set creation and rebalancing features from the TokenSets UI. The last date in which Set creation will be enabled in the UI will be January 27th, 2023; meanwhile, rebalancing and trading of existing Sets will be discontinued by February 28th, 2023.

We want to highlight that these changes don’t affect the functioning of existing or future Sets in any way, as the Set Protocol V2 will continue to operate autonomously, allowing managers to create and trade sets directly using Etherscan or programmatically. Additionally, managers who do not rely on the TokenSets UI for rebalancing and Set creation are not affected.

Steps for Set Creation and Rebalancing using Etherscan

Set Creation

For new or existing managers that want to create a new Set, you will be able to do so using Etherscan and following a few simple steps outlined in the following guide.

Set Rebalancing

The rebalancing steps will differ depending on the date in which your Set was created:

• For Sets created before June 2022 using TokenSets UI and not migrated to the Batch Trading system, please refer to the Trading Guide.
• For Sets created after June 2022 using TokenSets UI, please use the Batch Trading Guide.

We understand that this may be a disruptive change for some of our users, and we want to help with this transition in any way we can. If you have any questions regarding these changes or need support, please do not hesitate to reach out to us through the contact information below for assistance.

We appreciate your continued support!

Contact Info:

✉️ alejandro@setprotocol.com

✉️ richard@setprotocol.com

Twitter | Website | Discord

Resources:

• Set Documentation

TokenSets UI updates: Set Creation and Rebalancing deprecation was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

We are excited to release our Perpetual Protocol V2 integration on Set Protocol! This follows our recent Optimism deployment and plans to enable innovative structured products on Layer 2 ecosystems.

In this article we will guide your understanding in:

• Knowing what Perpetual Protocol is
• Why we integrated with Perpetual Protocol and what it enables
• How you can take advantage of the integration today
• The first Perp-based featured product, live on TokenSets, showing casing a great use-case.

What is Perpetual Protocol

Perpetual Protocol is a decentralized exchange, live on Optimism, for decentralised perpetual contracts. Using perpetual contracts, users can open leveraged long or short trading positions for a variety of assets using USDC as collateral. By using optimism, trade execution is exceptionally fast and transaction fees are small finally making these DEXs viable alternatives.

Why we integrated with Perpetual Protocol and what it enables

Trading through perpetual contracts is undoubtedly one of the highest volume instruments used today to seek asymmetric returns on your investment through the delicate use of leverage and risk management. Layer 2 based decentralised exchanges that offer these products, including PERP, have been booming with activity as they alleviate one of the biggest pain points that traditionally affected on-chain leverage trading, trading fees, execution speeds and an effective liquidation engine to ensure protocol health.

Perpetual Protocol, since deploying on Optimism has seen an impressive uptick in utilisation, becoming the most used protocol on the network.

Today, with this new integration, asset managers can create Perpetual-based Sets to represent specific discretionary or strict methodologies and distribute them as fully composable, ERC-20 tokens. This means they can be, for example, traded, lent, borrowed, bridged and integrated any permitting DeFi protocol, unlocking a new frontier for Perpetual Protocol. One novel utility of this is that Perpetual-based Sets enable perpetual strategies to be executed on Optimism but distributed and held on all networks.

Finally, in line with our normal Set architecture, these perpetual-based Sets can include a streaming fee, creating a decentralised and lucrative revenue stream for the manager as TVL increases.

A dive into the integration

The integration is powered by a series of Set Protocol contracts that hold open positions with the Perpetual Protocol contracts and facilitate levering, delevering, issuing, and redemption. The PerpV2LeverageModule allows a SetToken to manage a Perp account as a positive external position that has a value equal to the net Perp account denominated in USDC. The external position unit uses lazy loading and is only updated during Perp account changes, such as trades/issuances/redemptions.

The SlippageIssuanceModule requires a transaction in order to replicate the Set. To ensure safety (preventing sandwich attacks) for users, we permit defining slippage thresholds to enforce USDC in/out expectations.

Other contracts released with this launch support the curation of new product strategies, exposing interfaces for keeper bots to rebalance Perpetual-based Sets based on methodology, and the aggregation of Perp account info for the Tokensets app to display.

More information on our individual modules can be found in our docs: docs.tokensets.com/developers/contracts/protocol/modules

How to create your first Perpetual-based Set

Right now, creating Perpetual-based Sets is available to asset managers and developers who are comfortable developing on Set Protocol infrastructure or experienced in Solidity based integrations. Eventually, we want to enable creating these new Sets natively through TokenSets, opening up the integration to everyone.

To get started, dive into our documentation below where you will gain an understanding of the architecture of Set strategies and importantly, how to create, configure, and maintain and perpetual-based Set.

Developer Resources

📕 Pre-requisite: Strategies Overview

📗 Creating a Perpetual Leverage Token

📘 Configuring a Perpetual Leverage Token

📙 Rebalancing a Perpetual Leverage Token

📦 Set.js Library

Any questions? Let us give you the best chance of success in what you are trying to achieve by joining our Discord community and reaching out.

The SOLUNAVAX Index

A first in the Set Protocol ecosystem for creating a cross-chain strategy and utilising the new, innovative Perpetual Protocol V2 integration.

To showcase our new integration, Set ecosystem partners Galleon DAO & Beverage Finance have collaborated together to create the first perpetual-based featured Set on Optimism around the widely popular thematic investment involving Solana (SOL), Terra (LUNA) & Avalanche (AVAX). We are excited to showcase this product as both a great product for the Optimism ecosystem and also a case study to energise the imagination of Asset Managers to what could be built.

Where is the SOLUNAVAX Index available?

You can buy the SOLUNAVAX Index on Optimism through:

• Uniswap V3 SOLUNAVAX/WETH pool.
• TokenSets (for non-U.S. users) as the first featured Set on the platform.

You can learn more about the SOLUNAVAX Index by Galleon DAO & Beverage Finance and its specific methodology below.

The SOLUNAVAX Index is Live on Optimism

For more information on Set Protocol, visit:

Twitter | Website | Discord

Introducing the Perpetual Protocol V2, Set Protocol Integration on Optimism was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

Today, we are excited to announce the launch of the Set Protocol on Optimism as we continue to strive to enable and scale best-in-class decentralized asset management infrastructure to the most exciting network ecosystems.

Scaling DeFi Structured Products

Trends are clear, investors will go to where investment opportunities and communities present themselves and thrive, especially so on EVM compatible networks that let these network participants use familiar toolsets to bounce between networks with ease (Avalanche, BSC, Polygon, Arbitrum, Optimism). We are also seeing important strides in increasing onboarding support from wallets and centralized exchanges in addition to a flurry of cross-chain bridging routers, all of which leave 2022 primed for significant growth.

Recognizing this, we want to enable the ability for Asset Managers to create, manage and monetize investment products on scaling solutions early into the ecosystem so they can best capitalize on the growth trajectory. Today we are excited for that to be on Optimism, a network, team, and brand we have had to pleasure to work with and, alongside the rest of the crypto community, are very excited to see thrive in 2022 with us alongside them.

Why Optimism?

Optimism is an EVM-compatible scalability solution for Ethereum that allows us to further scale adoption of our leading decentralized asset management infrastructure at a fraction of the cost whilst maintaining the security and decentralization benefits of Ethereum.

The ecosystem already boasts an array of DeFi primitives including AMMs, synthetic derivatives, options trading, binary options, and more. Over $400m of assets have been bridged from the base layer and protocols like Uniswap, Synthetix, Lyra, Thales, dHedge, Aave V3 are already deployed with highly sought after projects like Curve and Olympus DAO planning to do so soon. In 2022 we expect a stream of projects onboarding onto Optimism to follow in the footsteps of others as volume and active users continue to increase which naturally creates a flywheel of activity.

With this in mind, as asset management infrastructure it’s one of Set’s missions to ensure we are unlocking Asset Managers in creating structured products during the early stages of a network's ecosystem so they can best capture and take advantage of any native assets, initiatives, or liquidity incentives that might arise. This is in addition to Optimism being a far more scalable environment for operations compared to Ethereum in terms of portfolio rebalancing and management.

“Set Protocol’s deployment on Optimism unlocks a rich new ecosystem for builders and investors to experiment and create value in a new environment that furthers our mission to make crypto investing simple, safe & accessible for all”

Cormac Daly, leader of Index Coop’s automated indices pod

What’s next on Optimism?

Whilst today in this early deployment you can create and invest into Sets natively on TokenSets utilizing the great transactional benefits of Optimism compared to Ethereum, the real focus and excitement lie with our roadmap and platform-native DeFi integrations to come.

• Enabling issuance via 0x for Sets on Optimism, unlocking liquidity for all Asset Managers small and large for their Set products.
• Enabling leverage strategies within Sets via a native Perpetuals Protocol V2 integration. Create and be at the forefront of an exciting Optimism exclusive integration within Sets that will allow methodologies and asset managers to execute advanced algorithmic or discretionary leveraged trading strategies using Perpetual products.
• Integrating Borrowing & Lending of assets within Sets to make held assets productive within Sets.
• TokenSets UI Improvements. We know not all Asset Managers have the technical resources to take advantage of all the Set Protocol smart contract capabilities available, in 2022 we want to ensure that everyone from the largest decentralized asset management DAOs (Index Coop) down to hobbyist methodologies have access to the power of what Set can provide.
• Staked assets, with tokens having an increasing amount of novel utilities to incentivize long-term holding and growth, enabling the ability to stake these assets is key for asset managers to unlock their potential.
• Best in class products, we anticipate DAO’s, especially leading forces in DeFi index products such as Index Coop to take full advantage of this new deployment in the future to bring us what we have come to expect from the quality of their product suite ($DPI, $MVI, $GMI, $ETH2X-FLI, $DATA).

Are you building on Optimism and can see an opportunity to collaborate? Get in touch, we’d love to hear from you.

✉️ alejandro@setprotocol.com

✉️ andrew@setprotocol.com

Getting Started on Optimism

Reference guide: docs.tokensets.com/alternate-networks/optimism

The easiest way to get started today in creating and managing your first structured product on Optimism is through our native dapp TokenSets. You will need ETH to facilitate transactions on TokenSets for creating a Set but also managing it going forward (rebalancing & accruing fees). The good news is that bridging to Optimism is very easy, below is a quick run-through of the native bridge over at gateway.optimism.io.

How can I bridge funds to Optimism?

Navigate to the Optimism Gateway, select the amount of ETH you would like to bridge over, and then click “Deposit.”.

You will then be prompted to confirm the deposit. Click “Deposit” and then confirm the transaction in your wallet. There will be a transaction fee associated with this, so try bridge when Ethereum network usage is low.

Once the transaction has been confirmed on Ethereum, it can take around 5–20 minutes for those funds to be accessible to use on Optimism. You are given the transaction links for both Ethereum and Optimism so you can track the progress.

Once your funds are available on Optimism, navigate over to TokenSets where you will find the ability to Explore Sets on Optimism from the dropdown menu at the top of the page. From here you can invest and create Optimism based Sets with your newly bridged ETH.

Now you are connected to TokenSets on Optimism, our documentation can guide you the rest of the way based on what your goals are. We can’t wait to see what you create!

For Investors

📕 Discovering Sets to invest in

📗 Buying & selling Sets using TokenSets / 📽 Video Guide

📘 Issuing and redeeming Sets using TokenSets

📙 Tracking the performance of my Sets

For Asset Managers

📕 Set creation using TokenSets / 🎥 Video Guide

📗 Set management using TokenSets

📘 Trading assets within a Set using TokenSets

📙 Customizing my Set icon and description

For Developers

📕 Guides & Tutorials

📗 Protocol Contracts

📘 GitHub

📙 Set.js Library

Any questions? Let us give you the best chance of success in what you are trying to achieve by joining our Discord community and reaching out.

For more information on Set Protocol, visit:

Twitter | Website

For more information on Optimism visit:

Twitter | Website | Discord

Set Protocol live on Optimism — Enabling Structured Products on Layer 2 was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

Sets are the bundling of crypto-assets into fully collateralized baskets, represented as investable ERC-20 tokens. Today, some of the most successful and diversified structured products are built on Set Protocol, such as the DeFi Pulse Index ($DPI), Metaverse Index ($MVI), and recently launched Bankless DeFi Innovation Index ($GMI).

These Set-based indices act as thematic investment vehicles that follow the manager’s methodology (investing strategy), allowing other investors to replicate an identical strategy by simply holding the Set in their wallet. Additionally, the underlying contracts enable management to access revenue through streaming fees and external integrations to other DeFi protocols such as Aave, which allows for on-chain leveraged trading strategies, fully managed and abstracted to the token holder.

The opportunities Set products provide traders & investors.

Sets being ERC-20 tokens means that they are fully compatible with wallets, exchanges, DeFi protocols, everything you would typically expect from tradeable tokens, so feel immediately familiar with holders. Why this is so appealing as a product is, for example, in the case of the newly released Bankless DeFi Innovation Index, a weighted basket of over ten separate high growth DeFi assets, you can access this diversified portfolio with one transaction as opposed to a tenfold more expensive process of buying the individual tokens and rebalancing to target weights, as well as the time investment necessary to replicate the methodology yourself.

In practice, Sets let traders and investors win by giving the most accessible access to diversified portfolio themes and complex leverage products whilst abstracting the costs and time away from them.

Where can I buy Sets?

Buying liquid Sets on decentralized or centralized exchanges is the same as the process you are probably familiar with; whether on Uniswap, Matcha, 1inch, Sushi, you can find where the sets are available for purchase using a platform such as CoinGecko. For example, in the case of the Bankless DeFi Innovation Index mentioned in this article, we can see a Uniswap market available to us and can directly navigate to the pool.

Trade $GMI on Uniswap 🦄

One final noteworthy feature of Sets: because they are 100% collateralized you can issue and redeem Sets such as $GMI, $DPI, or $MVI directly from the smart contract or via TokenSets, unlocking the ability for users to invest and divest into Sets irrespective of the Set’s market liquidity. This allows anyone to become an Asset Manager in the Set ecosystem, create novel products and distribute them in an entirely permissionless, decentralized manner.

Are you looking to create a unique product such as $GMI? Reach out to us and let’s see how we can best collaborate and set you up for success.

✉️ alejandro@setprotocol.com

✉️ andrew@setprotocol.com

Want to learn more? 📚

• Where can I see popular Sets today?
• How do I invest in a Set, such as GMI?
• What is Set Protocol? (Video)
• I’m a developer. Where can I see more?

Resources:

• Join our Discord community
• TokenSets

Why Buy a Set? A Short Overview was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

Set is excited to co-announce the Index Cooperative Polygon deployment of the industry-leading ETH 2x Flexible Leverage Index (FLI) product as their technology partner.

ETH2x-FLI-P is a structured product in ERC20 format that enables traders to automate a target leveraged exposure to ETH in a completely decentralized manner by utilizing the Set Protocol Aave Leverage Module. Being deployed on Polygon means that both investors and Asset Managers can take advantage of significantly cheaper and faster transactions.

If you would like to learn more about this great product now available on Polygon, navigate over to the Index Coop press release below. This article will show a little more about the underlying infrastructure being used.

defipulse.com/blog/flis-are-coming-to-polygon

Introducing the Aave Leverage Module (ALM)

The ALM is a Set Protocol smart contract module, available on both Polygon & Ethereum, enabling leverage trading within Sets using Aave as the lending protocol. Paired with this module is a Debt Issuance Module that will call functions on the ALM to keep interest accrual and liquidation state updated.

The Index Cooperative uses this module to power the FLI mechanism, which automatically levers and delevers the product depending on specific thresholds and parameters, ultimately ensuring a zero liquidation and fully managed product to investors.

Why use the ALM?

The ALM allows Asset Managers, such as the Index Cooperative, to create leveraged strategies and products fully collateralized and compliant with the ERC-20 token standard. In addition, by utilizing Set Protocol infrastructure and the ALM, you are unlocking the full composability of your products out of the box, which enables integration into the broader ecosystem of services to broaden use-cases.

At the time of writing, the ETH2X-FLI deployed on Ethereum has $180M+ TVL less than a year after being released, validating the product-market fit of decentralized, non-custodial, decentralized leverage products.

How does the module work?

The ALM has a series of functions that allow Asset Managers to initialize, lever and delever any Set assets listed on Aave easily. In addition, the module completely abstracts the aToken management and collateral swaps on DEX’s so you can focus on developing the product itself and, most importantly, is available to be utilized today by Asset Managers.

Dive into our documentation below and get in touch with any questions.

AaveLeverageModule

Interested in creating your own products?

The ALM lets you build custom leverage strategies such as long/short pair strategies to create unique ratio based sets (e.g. ETH/BTC pair) or larger, more diversified leveraged indices to perhaps capture sectoral moves with more weight (DeFi, BTC).

If you have a product idea utilizing the ALM on Ethereum or Polygon or simply want to use Set Protocol to create your next passive index, then reach out today and let’s help you understand how you can leverage decentralized infrastructure to create the structured products of the future.

Alternatively, if you want to try the protocol features out, you can always self-serve via TokenSets, our community and documentation linked below.

TokenSets, Discord & Documentation

Growth: andrew@setprotocol.com

Business Development: alejandro@setprotocol.com

Where do you want to see leveraged products next?

Avalanche? Arbitrum? Optimism? Fantom?

Let us know! We want Asset Managers, like the Index Cooperative, to create and get their products into as many community members hands as possible in the future. We will be taking temperature checks over Twitter & Discord today via polls, so please take the time to tell us!

Frequently Asked Questions

• How can I create and manage a Set?
• How do I invest in a Set, such as ETH-FLI?
• What is Set Protocol? (Video)
• How do I connect to TokenSets on Polygon?
• I’m a developer. Where can I see more?

Resources

For more information on Set & Index Cooperative,

• Join the Set community on Discord
• Create a Set or invest at TokenSets
• Follow Set on Index Coop on Twitter
• Explore the products built by the Index Cooperative
• Learn more about Set Protocol through our documentation

Enabling Innovative Leverage Products on Polygon with Aave & Index Coop was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.

We’re excited to announce the launch of the Set Protocol on Polygon, lowering the barrier of entry significantly and bringing us one step closer to enabling asset management and strategy creation for the masses.

Set’s Mission to Accelerate the Adoption of DeFi Asset Management

In an internet-first world, we believe in the inevitability of an internet-native financial system that is global, 24/7, permissionless, and transparent. This new system will have all the elements of the existing financial system including trading, borrowing / lending, derivatives, insurance and enable new use cases we can’t imagine today. In this new paradigm, Set’s mission is to accelerate the adoption of DeFi asset management.

What’s Next

Alongside this launch, Set has also developed a framework for rapidly expanding into the multi-chain ecosystem with the goal of enabling any strategy with any asset. More on this to come.

Getting Started

The easiest way to get started today is through our native dapp TokenSets. We will continue to drive as many new protocol and chain integrations through TokenSets over time.

TokenSets - Asset Management Simplified

New integrations will always be available on the network layer first before coming to the UI. To keep up to date, join us in our Discord and follow along with our Documentation.

In this rest of this article, we will briefly cover the following to give you a quick primer on why we are excited about Polygon and how you can get started today using TokenSets.

Overview

Polygon is an EVM-compatible scalability solution for Ethereum that allows us to further enable users access to the world of decentralized asset management at a fraction of the cost. Whether you are a beginner just wanting to dip your toes into TokenSets or an experienced portfolio manager that frequently trades, we heard you and listened. Our Polygon deployment will allow you to deliver in a more efficient way by lowering the barrier to entry for all participants by significantly cheaper transaction fees and transaction times than L1.

With how easy it is to deploy to Polygons PoS Chain, why only now if lowering the protocol fees was the goal? Liquidity! An asset management protocol such as Set requires ample amounts of liquidity and asset choice to make deploying a viable proposition. This is important because Sets are 100% collateralized and hold all the underlying tokens required within their own deployed contracts, so when a user invests in a particular Set, there has to be on-chain liquidity to facilitate the acquiring of the underlying assets required to issue the Set token and send to the investor. Who solved the pre-requisite for us? Our friends at 0x for efficient order routing & Sushi for liquidity, who have both shared previous success stories with their respective Polygon launches.

How do I access TokenSets on Polygon?

To help you along the way, we will cover the essential onboarding information:

• How to move tokens from Ethereum to Polygon using Polygon Bridge.
• How to access TokenSets on Polygon.

Moving tokens from Ethereum to Polygon

The first method to move your tokens over to the Polygon network is direct via Polygon Bridge

The Matic Bridge to convert the assets in the wallet between Ethereum and Polygon (Matic) network.

Connect your MetaMask wallet on Polygon Bridge.

Input the amount you’d like to move to Polygon, click “Transfer” and then “Continue”. Below we are bridging ETH to the Polygon network so that we can invest in Sets on the TokenSets platform.

Once the transaction is sent, you will see the balance updated in around 10 minutes. This means that your tokens have been successfully transferred to the same wallet address under the Polygon network.

You should now see your bridged assets within your wallet such as MetaMask, there are also portfolio trackers that support Polygon assets such as Zerion & Zapper. Additionally, you should receive a small quantity of MATIC tokens provided by the Polygon team to support your first transactions on the Polygon network.

How to explore Polygon Sets on TokenSets

Currently, we only support Metamask to access TokenSets on Polygon. To connect your MetaMask wallet, use the Sign In button at the top-right of the home page and unlock your wallet.

Switch the network you are connected to on MetaMask by clicking the network switch at the top of the extension window and selecting Polygon (Mainnet) from the dropdown list.

On TokenSets, click the network switch button on the navigation bar and select Explore on Polygon to show Sets currently available on the Polygon Network.

You are now connected to Polygon on TokenSets! ✅

In the next section, we’ll cover how investors, managers, and developers are using the protocol today and essential resources for you to join them.

How can you use TokenSets today?

Today some of the largest, most successful indices by AUM and reputation in the cryptocurrency ecosystem are built using Set Protocol, such as the popular DeFi Pulse Index, ETH Flexible Leverage Index, or Metaverse Index.

Below is a comprehensive role map that will help you identify what type of user you are and the resources that will best guide you going forward on the platform. Remember, the community and team would love to help you on your journey, don’t hesitate to join our Discord server and get in touch with any questions!

— Investors

Investors allocate capital, receiving the Set tokens that represent their share in the portfolio of structured products. Investors retain full custody of assets as funds are inaccessible to managers outside of managing the Set via the underlying smart contract.

Want to invest in the diverse array of Sets available today? Here are some guides that will help you understand the actions you can take on TokenSets.

📕 Discovering Sets to invest in

📗 Buying & selling Sets using TokenSets / 📽 Video Guide

📘 Issuing and redeeming Sets using TokenSets

📙 Tracking the performance of my Sets

— Managers

Managers create and maintain structured products in the form of Sets to cater to their use-case, whether they intend to offer their Sets as an investment opportunity for investors as an individual or organization, or a DAO with a treasury needing an investment opportunity on-chain, transparent method of management. Managers can use streaming fees to monetize their products and build lucrative avenues of income through their products as they grow.

Want to manage your own Set? Our guides below will take you through the entire process so you can get going in minutes!

📕 Set creation using TokenSets / 🎥 Video Guide

📗 Set management using TokenSets

📘 Trading assets within a Set using TokenSets

📙 Customizing my Set icon and description

— Developers

Developers build the next generation of financial applications using the Set Protocol layer as their base and achieve their objectives faster. Whether you are running an algorithmically rebalanced cryptocurrency index or a long-only large investment portfolio that caters to an existing customer base — the Set Protocol has limitless opportunities on what innovative projects can be built, with TokenSets being a core example.

Got a brainwave of how you can programmatically interact with the protocol for your own project? Here’s what you need to know.

📕 Guides & Tutorials

📗 Protocol Contracts

📘 GitHub

Additional Guides

Visual learner? Say no more, we’ve got you too. Check out these video guides below to get your basics down on how to use TokenSets.

🎥 Buying & Selling On TokenSets | DeFi Asset Management

🎥 How To Create A Set On TokenSets | DeFi Asset Management

Resources

If you experience issues that are not covered in this guide, please reach out to the Set team directly via Discord and we’ll be happy to help.

• Discord
• TokenSets
• Documentation
• Twitter
• GitHub
• We’re hiring!
• Business Enquires

Pushing boundaries in Asset Management — TokenSets <> Polygon was originally published in Set Labs on Medium, where people are continuing the conversation by highlighting and responding to this story.