Set Protocol wants to make yield farming cheaper

Set Protocol plans to introduce yield farming as part of the automated trading strategies offered in its TokenSets platform.

Set will deploy yield farming strategies designed by Set Labs team and by the community. Yield farming has taken DeFi by storm with traders pouring over hundreds of millions of dollars worth of digital assets into these platforms in exchange for token rewards. But these strategies can take many steps to execute and skyrocketing Ethereum gas costs make it prohibitively expensive for those investing smaller amounts.

While TokenSets had previously supported Compound’s interest-earning cTokens in V1, users can now benefit from yield farming by earning and distributing governance tokens like COMP, BAL, CRV and more from various strategies which use underlying DeFi protocols.

Lower Cost, Fewer Steps

Users will only need to pay for Ethereum gas fees when entering or exiting a strategy, which is bound to reduce skyrocketing gas costs. The platform also aims to reduce the complexity of these trades, which often require interacting with multiple protocols.

1/ Today, we’re excited to reveal Set V2, a new protocol built to give users and portfolio managers access to all of the exciting opportunities available to them in DeFi!https://t.co/7gCQEpkiuJ pic.twitter.com/K86FIHnnmA

— Set (@SetProtocol) August 5, 2020

Set Protocol has grown to $24M in assets locked in its smart contracts from $500k in just over a year, according to a blog post published Tuesday by the team.

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More V2 Upgrades

The move is part of a wider upgrade. Set Protocol’s V2 will also include support for a larger array of ERC20 tokens. Only ETH, WBTC, LINK, and a couple of stablecoins were supported in V1. Set is also pledging to “significantly” reduce gas costs. To provide some context, V1 averaged anywhere from $15-50 to buy and sell a Set in the current gas climate.

V2 also aims to increase flexibility for Set managers to create portfolios and includes more sophisticated investment features like margin trading, limit orders, and DEX trading. Set Protocol will also be integrating popular primitives and assets offered by Aave, Balancer, Curve, and Synthetix on top of their underlying liquidity mining opportunities.

In the midst of the yield farming craziness, demand for Set’s “Set it and forget it” asset management platform has slightly slumped. These upgrades may help give the platform a boost.

—By Cooper Turley

[This story was written and edited by our friends at The Defiant, and also appeared in its daily email. The content platform focuses on decentralized finance and the open economy and is sharing stories we think will interest our readers. You can subscribe to it here.]