Introducing cTokens on TokenSets

The first cToken-enabled Set — ETHRSIAPY— is now live on TokenSets!

Published in

Set Labs

4 min readDec 12, 2019

Today, we’re excited to announce the integration of Compound Tokens (cTokens) and the launch of the first cToken enabled Set — the ETH RSI 60/40 Yield Set! The main benefit of cToken integration is that users can now earn interest while the Set is positioned in the stable-asset (in this case, cUSDC).

We’re starting with an RSI Set first because it rebalances the least frequently and sits in cUSDC— meaning that it takes advantage of an interest-bearing stablecoin more than any other one of our current Sets.

Each Set that contains a cToken will have a unique logo to differentiate it from the non-cToken Sets. Users will be able to buy and sell the ETHRSIAPY Set using ETH, USDC or DAI when the Set is positioned in ETH, and by using cUSDC when it’s positioned in cUSDC.

You can follow the guide in this blog post to learn more about how the buy and sell process differs from other Sets.

Key Points:

cUSDC integration is now live within Set Protocol
You can now mint the ETHRSIAPY Set on TokenSets
Support for additional cTokens will go live in the near future

cTokens Explained

Each market on Compound has its own Supply interest rate (APR). Interest isn’t distributed; instead, simply by holding cTokens, users earn interest.

cTokens accumulates interest through their respective exchange rate and, over time, each cToken becomes convertible into an increasing amount of its underlying asset, even while the number of cTokens in your wallet stays the same.

For example, let’s say you supply 1000 USDC to Compound. In return for supplying the USDC to the protocol, you are issued cUSDC tokens to your Ethereum wallet which act as a claim on your share of the underlying USDC in the Compound protocol. This cUSDC is essentially an interest-earning ERC20 token that can be used like any other token on the Ethereum network.

When you are ready to close out your position with Compound, you simply pay back the cUSDC tokens to the protocol to unlock your USDC.

How cTokens Supercharge Sets

Existing Trend Trading Sets like the ETH RSI 60/40 Crossover Set are positioned in either 100% ETH (the crypto-asset) or 100% USDC (the stable asset). This means that when the Set is sitting in USDC, it is not generating any yield.

With the introduction of cTokens, the ETH RSI 60/40 Yield Set now gives you exposure to an interest-bearing asset when it’s positioned in cUSDC.

You can get started by minting the ETHRSIAPY Set on TokenSets here by using either ETH or cUSDC!

Converting to the ETHRSIAPY Set

Holders of the ETHRSI6040 Set can now convert to ETHRSIAPY by following the steps below. Do keep in mind that in doing so you are taking on additional smart contract risk due to cTokens being a product of the Compound protocol.

If ETHRSIAPY is currently positioned in cUSDC

Note: if you already have cUSDC, you can simply sell your existing ETHRSI6040 Set and then immediately purchase the ETHRSIAPY Set using your cUSDC.

Head to the ETHRSI6040 page on TokenSets
Hit the Sell button and select USDC from the Get dropdown menu
Hit the Preview Sell button and then hit Submit Sell
Once the sale has completed, head to the Compound USDC portal
Follow the Compound process to supply USDC to the protocol
Once you have cUSDC in your Ethereum wallet, you can head to the ETHRSIAPY page on TokenSets and go through the normal buying process

If ETHRSIAPY is currently positioned in ETH

Follow Steps 1 to 3 above
Make sure that you have ETH in your wallet
Head to the ETHRSIAPY page, hit the Buy button and follow the process
Done

Conclusion

cToken integration is a major improvement to the Set Protocol system and we’re excited to continue releasing Sets that contain cUSDC and eventually other cTokens. You can get started today by minting the new ETHRSIAPY Set on TokenSets.

If you have an idea for a strategy that you’d like to see on TokenSets, please don’t hesitate to reach out to us.

Developers interested in working with us can also reach out to our friendly team by emailing us at hello@setprotocol.com or by joining our Telegram chat.

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