Introducing the LINK/ETH RSI Ratio Trading Set on TokenSets

The LINKETHRSI Set is now live on TokenSets

Introduction

Today, we’re excited to announce the launch of the LINK ETH/RSI Ratio Trading Set (LINKETHRSI) on TokenSets! The Set implements a crossover strategy on the LINK/ETH simple RSI. Learn more about the simple relative strength index and how it is calculated here.

Key Points

• You can now mint the LINKETHRSI on TokenSets
• This is the second LINK-based Set available on TokenSets (the first being LINKRSI)
• The RSI is currently above 55 and the Set is sitting in 100% LINK
• LINKETHRSI is powered by Chainlink’s LINK/USD and Maker’s ETH/USD oracles
• Join our Discord channel to chat with fellow traders

Why trade the LINK to ETH ratio?

Many crypto traders trade higher beta tokens and attempt to accumulate more ETH or BTC. LINK is one such cryptoasset with a high correlation to ETH with more volatile price movements. Trading the LINK/ETH ratio allows traders to stay 100% exposed to crypto while taking advantage of changes in LINK relative to ETH price whenever prices are not as correlated with each other.

The LINKETHRSI Set

The LINK/ETH RSI Ratio Trading Set implements a crossover strategy on the LINK/ETH simple RSI. Learn more about the relative strength index here.

At a high level, if the LINK to ETH ratio falls below support, LINKETHRSI rebalances 100% LINK into ETH with the expectation that ETH will continue outperforming LINK. Conversely, if the ratio rises above resistance, the Set rebalances into LINK expecting that LINK will continue to break out against ETH.

LINKETHRSI attempts to capture large oscillations in the LINK to ETH price to accumulate more ETH.

How is RSI calculated on TokenSets?

The LINK/ETH RSI is calculated using the on-chain ChainLink LINK price feed for the past 14 days at 8:00 pm UTC each day. Therefore, the RSI only updates once every 24 hours. Link to technical documentation of the RSI oracle here.

Note: The Set uses a simple RSI which is different from Wilder’s smoothed RSI used by TradingView and some crypto exchanges.

What are the additional criteria needed to trigger a rebalance?

The RSI updates once every 24 hours at 8:00pm UTC, so a rebalance is kicked off approximately the same time each day if conditions are satisfied. Rebalances for this Set take around 60 minutes to settle. There is no confirmation period unlike moving average Sets.

How the LINKRSI 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.

This chart below compares the hypothetical performance of holding the LINKETHRSI Set against holding 100% ETH over the last 2 years, assuming a slippage rate of 1% during each rebalance. The model shows the Set would have outperformed over the given historical time period and been subject to the volatility of LINK and ETH prices.

The chart below illustrates the ETH that would have been accumulated using the LINKETHRSI Set vs a buy and hold strategy following the same assumptions above. Note: Not pictured is LINK, which has outperformed both ETH and the LINKETHRSI over the time period.

It’s important to keep in mind the the charts above are based on a number of assumptions and are only meant for illustrative purposes. As always, past performance is not indicative of future performance.

These charts use generated ETH hourly data sourced from CoinGecko. In production, the LINKETHRSI Set rebalances based on MakerDAO’s ETH/USD and ChainLink’s LINK/USD price oracles. If you’d like to play around with the data yourself (and tweak the parameters), feel free to fork the spreadsheet here.

How to Purchase the LINKETHRSI Set

Purchasing the LINKETHRSI Set is easy — simply follow the steps below.

1. Head to the LINKETHRSI Set page
2. Click Buy
3. Select your trading pair token (ETH, DAI, USDC, LINK, WBTC, etc.). If you select LINK from the dropdown menu and the Set is weighted 100% in LINK, your LINK will simply be deposited, and you will incur no slippage.
4. Input how many Sets you’d like to buy (or hit the Max, 1/2, or 1/4 button)
5. Click Preview Buy
6. Review your order details to make sure everything is in order
7. Click Submit Buy and approve the transaction
8. Once the order is complete, the LINKETHRSI Set tokens will be issued to your Ethereum wallet

Conclusion

The LINKETHRSI Set is the second Set on TokenSets that offers a crypto-asset other than ETH or BTC and we’re excited to be using Chainlink’s decentralized LINK/USD oracle to power this Set.

Learn more about Chainlink by visiting the Chainlink website, Twitter or Reddit. If you’re a developer, visit the developer documentation or join the technical discussion on Discord.

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 Discord channel.

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