Introducing the ETH 50 Day Moving Average Set
The ETH50SMACO Set is now live on TokenSets
Today, we’re introducing the second Set in the Trend Trading Strategy category on TokenSets — the ETH 50 Day Moving Average Crossover Set (ETH50SMACO).
- The ETH50SMACO Set is now live on TokenSets!
- The Set automatically rebalances based on a crossover between the price of ETH and the 50 Day Simple Moving Average (50 SMA) technical indicator.
- The smart contracts and meta-oracles that power the ETH50SMACO have been externally audited by ABDK and are open-sourced in our Github repo.
The ETH50SMACO Set
The ETH 50 Day Moving Average Set attempts to capitalize on medium to long term price trends in order to accumulate ETH. ETH50SMACO automatically triggers rebalances when the price of ETH crosses the 50 Day Simple Moving Average (50 SMA) indicating a trend reversal. If the price of ETH crosses below the 50 SMA, ETH50SMACO automatically rebalances all its ETH into USDC to reduce further losses in the downtrend. If the price of ETH crosses above the 50 SMA, ETH50SMACO rebalances its USDC into ETH to capture upside in the uptrend.
The Set rebalances on a stronger trend signal (50 SMA) and less frequently (resulting in less rebalance slippage) than the ETH20SMACO. The ETH50SMACO Set gives users another option to diversify exposure across multiple trend trading strategies. ETH50SMACO is currently below the 50 SMA and collateralized by USDC.
Similar to the ETH20SMACO, ETH50SMACO is configured to have a minimum rebalance interval of 4 days along with a 6–12 hour delay period for confirmation of a price trend. If the signal has not been confirmed after 12 hours then the rebalance signal is considered a false positive, and must be proposed again.
In addition, the ETH50SMACO Set is powered by the same Open Finance protocols used by the ETH20SMACO Set — USDC as a stable asset, and Set Protocol’s moving average meta-oracles derived from MakerDAO’s ETH price feed.
View the Set on TokenSets.
How the ETH50SMACO Set Performs
Disclaimer: The content below is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. The content below is provided for educational purposes only, and not indicative of future performance. None of the following should be interpreted as investment advice. The tools used below follow a predefined set of parameters and aren’t actively managed by Set Labs Inc.
ETH50SMACO typically outperforms in strong medium to longer term directional markets (bear or bull), and typically underperforms in choppy markets as moving averages are lagging indicators.
In the below chart you can compare the hypothetical performance of holding the ETH50SMACO Set against holding just ETH over the last 3 years assuming a rebalance slippage rate of 1%. You’ll notice that the ETH50SMACO Set would have outperformed ETH over the given historical time period. And during the period between February 2018 and January 2019, the Set was positioned almost entirely in USDC.
It’s important to keep in mind the the charts below are based on a number of assumptions and are only meant for illustrative purposes. As always, past performance is not indicative of future performance.
The ETH50SMACO Set is a medium to longer term ETH accumulation strategy compared to the ETH20SMACO. The chart below illustrates the hypothetical ETH you would have accumulated by holding an ETH50SMACO Set over the last 3 years.
These charts were generated by data that was sourced from Gemini’s ETH hourly rate. In production, the ETH50SMACO Set rebalances based on MakerDAO’s ETH price feed, which may output different results. If you’d like to play around with the data yourself (and tweak the parameters), feel free to fork our spreadsheet here.
Get started by minting a ETH50SMACO Set on TokenSets here!
This is just the beginning of a series of additional Trend Trading Set launches over the next few weeks and months, which will include many more technical indicators such as the EMA and RSI, and involving more assets such as WBTC and Compound cTokens.
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.