2024: Sommelier Unleashed
Sommelier launched with a clear mission — to simplify and democratize DeFi. With a modest TVL of $1 million, we embarked on a series of audacious vaults that merged the liquidity of blue-chip protocols with the brightest minds in DeFi. The result? Thousands of new users and a soaring TVL quickly approaching $100 million.
Building a Strong Foundation
To achieve our vision, we understood that a robust foundation was essential.
- Cutting-Edge Smart Contracts: Ecosystem contributor Seven Seas, meticulously developed smart contract adaptors providing access to 11 blue-chip protocols, unlocking over $14 billion in DeFi liquidity. From Aave to Balancer, Compound to Curve, Sommelier connected to the heart of DeFi.
- Improved Affordability: Accessibility was our priority. We worked with Seven Seas to streamline deposit gas costs to ensure a user-friendly DeFi experience. Simultaneously, we improved the Sommelier Dapp to offer users a seamless journey.
- Strategic Partnerships: No journey is taken alone. Collaborations with Aave DAO, Lido, ether.fi, Swell, Stader, Kelp, Renzo, and Diva broadened our horizons and introduced our best-in-class vaults to a broader audience. These partnerships laid the foundation for mutual growth.
- Chain Expansion: Recently, Sommelier seamlessly integrated with Arbitrum and other EVM chains, making use of Axelar General Message Passing (“GMP”) to extend our reach across 50 chains. The future of DeFi is now at our fingertips.
- Sustainable Ecosystem: Moreover, we introduced a mechanism to convert accrued vault fees into non-inflationary staking rewards (currently ~20% staking yield) for SOMM token holders, steering the protocol toward sustainability.
Now, with this significant infrastructure work behind us, we’re accelerating our execution of the Sommelier vision.
The Death of Yield Aggregators & The Rise of Decentralized Asset Management Protocols
While initially groundbreaking, yield aggregators have fallen by the wayside as the complexity of DeFi has outpaced their capabilities. As a result, most yield aggregators are pure auto-compounders. When they go beyond auto-compounding, they package a few simple strategies together to deliver a mediocre yield product. This offering has limited appeal to the yield-hungry crypto-natives that comprise most of the on-chain userbase.
Instead, what is needed is a product that can not only satisfy crypto-natives, but is also more broadly positioned for a future where a majority of the world’s assets and transactions are on-chain. In this world, the product needs the following characteristics:
- Simple Experience: Deposit your assets to automatically earn for you in DeFi.
- Be Secure: Prevents hacks and other malicious behavior resulting in loss of user funds.
- Go Anywhere: Use any chain, protocol, or asset.
- Do Anything: Find the perfect strategy for you, whether it’s for trading, maximizing yield, farming airdrops, or a multi-strategy approach.
- Adapt to the Market: Stay ahead of the curve to maximize the potential of your assets.
Enter Sommelier and the era of decentralized digital asset management protocols.
A Vision Unfolds
Sommelier is perfectly positioned to become the largest decentralized digital asset management protocol in DeFi. Our flagship vault, Real Yield ETH, offers that familiar TradFi experience of deposit your capital and it starts earning for you. Since launching last April, the vault has adapted to changing market conditions, just as you would expect with your capital in TradFi, and outperformed regular stETH holders by 2.25x. Over the last 90 days, the results have been even more impressive, as Real Yield ETH users have outperformed stETH users by 3.25x (chart below). Because of this, we believe Real Yield ETH is the most secure and efficient place to stack your ETH. As more users and capital come on-chain, they’ll immediately seek out the highest risk-adjusted returns on ETH, and Real Yield ETH will be the natural choice.
Beyond just being a place to grow your ETH, we envision Real Yield ETH, and other Sommelier vaults as the new standard in yield baring collateral. Our best-in-class yields combined with the DeFi composability that comes from building on the ERC-4626 standard, has been extremely attractive to emerging money markets looking to integrate innovative high-yielding assets. A prime example of this is Sturdy’s integration of Real Yield ETH, Turbo stETH and Turbo swETH as collateral to borrow ETH. This is just one of a growing list of DeFi integrations for Sommelier vault tokens.
In delivering strong products like Real Yield ETH, Sommelier has also become one of the most influential protocols in DeFi. In terms of protocols, Sommelier is the largest leveraged staker in DeFi with approximately $800 million of stETH exposure. In terms of trading volume, it is also the largest on-chain LP for wstETH, having done in excess of $10 billion of volume. These aspects have made Sommelier a highly desired partner to DEXs and money markets as well as L2s looking to bootstrap efficient liquidity in their ecosystem.
We also plan to evolve our product set and distribution channels to capture the growth in DeFi’s most promising sectors including Liquid Staking Tokens (LSTs), Liquid Restaking Tokens (LRTs) and Real World Assets (RWAs).
Join the Revolution
Ready to be part of the future of DeFi? Here’s how you can join the Sommelier community:
- Explore Sommelier Vaults: Visit our platform to explore the simplicity of optimizing assets within DeFi.
- Follow Us: Stay updated on the latest developments and innovations by following our official social media channels.
- Share Your Ideas: Your input matters. Share your ideas and feedback with us to be part of the conversation.
- Spread the Word: Help us democratize finance by spreading the word about Sommelier and our mission.
Join us on this extraordinary journey. Sommelier is not just worth building; it’s worth embracing as a vision for a brighter future for all.
About Sommelier
Sommelier is an innovative decentralized digital asset management protocol. Our advanced technology built on the Cosmos SDK, enables intelligent vaults that can optimize portfolios through dynamic trading and yield strategies. All vaults are enabled by audited smart contracts and controlled by protocol governance, ensuring transparency and security.
