Product Rebalancing Handoff Plan

Authors: @asoong , @dalberto , @setoshi

Reviewers: @DocHabanero, @edwardk



This document describes the scope of services Set is transitioning to IndexCoop, the timeline for their decommissioning, and remediation steps.

The outcome of this document is to have IC choose its own transition plan, given the constraints and considerations outlined by the Set team. Questions and additional information to sharpen these views are welcome.


The impetus behind this change is multifaceted and has been in the making for some time.

First, as a technology provider, all of Set’s other customers manage and operate their own products. Transitioning these services will bring IC’s relationship with Set in alignment with the relationship it has with other asset managers.

Second, the shift is consistent with previously articulated points around IC operating and maintaining its products. It must be acknowledged that this represents a substantial amount of additional work for the IC product and engineering teams. This additional responsibility is directly related to the greater amount of control IC has over these products and their operation. While Set has historically performed this maintenance work, this is an opportunity for IC to invest in its talent, and infrastructure such that it can realize its ultimate vision.

Third, this transition will allow both parties to focus on their respective core competencies. Set’s engineering team has been hampered by the litany of maintenance work, and that has cannibalized core protocol and infrastructure innovation. On the other hand, IC has a diverse and large body of contributors that would be better positioned to maintain its products. The current allocation of resources amongst the two organizations is inappropriate given their respective strengths.

Scope & Timeline

As described in Bring Building Back:

  • Set will cease handling rebalances for simple indices (aka composite indices) on May 31st, 2022; Set will not perform the June rebalances.
  • Set will cease rebalances and leverage ratio management for leveraged products (FLIs) on May 27th, 2022.
  • The Basis Trading keeper will cease operation on June 15th, 2022.


Remediation steps for IC are dependent on the product category. It should be noted that any specific remediation can occur on a per-product basis and the overall transition plan may employ a combination of proposed remediation steps. For example, IC may choose to stop rebalancing some underperforming products altogether, but choose to implement rebalancing for marquee products. These remediation options are presented here so that IC proactively chooses what it believes is best, Set is only serving a consultative role.

Simple Indices

Stop rebalances altogether

For some products, IC may choose to stop rebalancing altogether, or alter the rebalancing frequency (e.g. transition from monthly rebalances to quarterly rebalances). This option requires minimal collaboration with Set, but likely incurs high coordination costs with methodologists. It would be IC’s responsibility to coordinate and negotiate with methodologists if this option is employed.

Adopt Set’s self-service roadmap

Set has a number of product initiatives designed to allow IC to manage indices in a self-service manner on TokenSets. This roadmap requires a mental shift in that rebalances become an operational task, rather than a technical maintenance task. As previously discussed, IC would have to marshal the appropriate resources to realize this vision. Broadly speaking, the roadmap consists of the following:

  1. Self service manager contracts. This allows the creation of simple/composite indices on TokenSets. IC would be able to delegate rebalancing trades to an “operator” role. After the completion of this project, trades can be executed serially, which is suboptimal for large indices but workable for smaller ones. This work is slated to be completed by April 15th, 2022.
  2. Manager Contract upgrades. This is a maintenance task that would upgrade the manager contracts on existing IC products to the new self-service manager contract subsystem, and would allow their management through TokenSets. Set would complete the engineering work for this process. The core changes and tradeoffs have been outlined and discussed. This is slated to be completed by April 15th, 2022.
  3. Batch Trading. This allows Sets managed by the new self-service manager contract subsystem to execute trades in batch, thus increasing the operational efficiency of self-managed Sets. This work is slated to be completed by the end of April 2022.
  4. Claim/Airdrop/Wrap. This scope of work would allow the management of intrinsically productive indices (within constraints around asset selection). This work is slated to be completed by May 2022.
  5. COMP Rewards Claim. This simply allows claiming COMP rewards on the existing FLIs, which IC can use as it wishes. This is slated to be completed by April 2022.

Given this process requires substantial development effort, Set requires feedback from IC on the suitability of this roadmap, to ensure a proper handoff. Specifically, IC needs to formulate an operational plan for how rebalances would be handled with this new system. If IC decides this plan is unsuitable or infeasible for its needs, Set would accordingly shift resources elsewhere to meet the transition goal.

Adapt/re-implement Set’s TWAP rebalancing infrastructure

Set is willing to provide the source code, documentation, and any other resources for its existing TWAP rebalancing infrastructure, which powers the simple indices rebalances. This infrastructure is tightly coupled to Set’s other systems, and it is unlikely that it makes sense to adopt it as-is. This option too would require a mental shift, as technical operations supporting this infrastructure will shift to EWG; it’s not strictly turn-key.

Leveraged Indices

Adapt/re-implement Set’s keeper infrastructure

As Set understands, this effort is already underway within the EWG. Essentially, Set has started a knowledge transfer process that consists of sharing its keeper source code, documentation and best practices with EWG to empower EWG to implement its own keepers based on the battle-tested experiences of Set.

Further develop IC’s OpenZeppelin

Adopt/develop decentralized keeper infrastructure

EWG may choose to pursue a completely decentralized solution like Gelato or Chainlink Keepers. However, these platforms have their own limitations and it may be infeasible to reach parity with the existing keeper infrastructure.

Do nothing / sunset product altogether

With leveraged indices this option is riskier, as lack of product maintenance might cause a liquidation. However, it may be worthwhile for IC to sunset smaller and less successful FLIs.

Basis Trading

The first basis trading has not launched yet, but its core functionality mirrors the leveraged index suite. As a result, the remediation options mirror the leveraged indices options, with the notable exception of decentralized keepers. As of this writing neither Gelato nor Chainlink Keepers support Optimism.


Hi @asoong and team.

Fully support the Set initiative to move rebalancing off to IC.

For most of our existing Simple products we’ll elect to take the ‘Adapt/re-implement Set’s TWAP rebalancing infrastructure’ option since it reduces human interaction for rebalances and intrinsically productive assets limit our ability to get listed on a CEX. We’re working to confirm this with all methodologist. This will require additional development time so we request that the timeline be pushed one month for these products. We will be engaging our methodologist to limit rebalances for the month of June to reduce impact to Set.

For leveraged indices we will take the ‘Adapt/re0implement Set’s keeper infrastructure’ option as this is already underway and something we can easily support.

Overall we see this as mutually beneficial for both parties since this will allow Set more time to produce cutting edge features that IC can utilize.