Introducing the LINK RSI Set on TokenSets

The first Set with LINK as a component is now live!

Anthony Sassano

Published in

Set Labs

5 min readFeb 24, 2020

Introduction

We’re excited to announce the launch of the LINK RSI Set (LINKRSI) on TokenSets!

Rebalances for this new Set is powered by our brand new integration with Chainlink’s LINK/USD oracle.

The LINKRSI Set is the first Set on TokenSets that contains a crypto-asset other than ETH or BTC.

Key Points

You can now mint the LINKRSI on TokenSets
LINK is the first crypto-asset other than ETH and BTC supported on TokenSets
LINKRSI uses ChainLink’s decentralized LINK/USD price oracle
Join our Discord channel to chat with fellow traders

What is Chainlink?

ChainLink is a decentralized open-source oracle network that gives smart contracts secure and reliable access to data providers, web APIs, enterprise systems, cloud providers, IoT devices, payment systems, other blockchains and much more.

We’re excited to be integrating ChainLink’s robust LINK/USD oracle to power the new LINKRSI Set.

Chainlink’s LINK/USD price oracle is backed by seven independent, security reviewed, and Sybil resistant nodes that each retrieve data from a different market-wide data aggregator. All the node’s individual responses are then aggregated together into a single data point and sent on-chain and as a new price update.

Chainlink’s decentralized price oracle ensures that rebalances for the LINKRSI Set are accurately triggered based on an aggregation of the top liquidity sources. This gives the LINKRSI Set exposure to price discovery happening throughout the greater cryptocurrency market, making it a much more reliable and secure DeFi product without a single point of failure or single source of truth.

The LINKRSI Set

The LINK RSI Set implements a crossover strategy on the ChainLink Relative Strength Index oscillator indicator. Learn more about RSI and other oscillators here.

On a high level, if the LINK daily RSI falls below support at 45 in an existing uptrend (price loses momentum), LINKRSI rebalances LINK into cash (USDC) and if the LINK RSI breaks above resistance at 55 in an existing downtrend (price regains momentum), LINKRSI rebalances back into ETH. LINKRSI uses the daily RSI which means there is no confirmation period for rebalance signals.

How is RSI calculated on TokenSets?

The 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.

What are the additional criteria needed to trigger a rebalance?

The RSI updates once every 24 hours, so a rebalance is kicked off approximately the same time each day if conditions are satisfied. Rebalances for this Set take ~40min to settle. There is no confirmation period unlike moving average Sets.

How long does the rebalance take to complete?

Rebalances for the LINKRSI take approximately 40 minutes to complete. Learn more about Set rebalances here.

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 LINKRSI Set against holding LINK over the last 3 years, assuming a slippage rate of 1% during each rebalance. The model shows LINKRSI would have outperformed over the given historical time period and underperformed in the LINK rally in mid 2019.

The chart below illustrates the ETH that would have been accumulated using the LINKRSI Set following the same assumptions above.

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 LINK daily data sourced from CoinGecko. In production, the LINKRSI Set rebalances based on ChainLink’s LINK 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 the spreadsheet here.

How to Purchase the LINKRSI Set

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

Head to the LINKRSI Set page
Click Buy
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.
Input how many Sets you’d like to buy (or hit the Max, 1/2, or 1/4 button)
Click Preview Buy
Review your order details to make sure everything is in order
Click Submit Buy and approve the transaction
Once the order is complete, the LINKRSI Set tokens will be issued to your Ethereum wallet

Conclusion

The LINKRSI Set is the first 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.

Learn more about Set and join our community