Sommelier Upgrades Cellar Architecture to Enable the Most Powerful DeFi Strategies in the Market

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Sommelier Upgrades Cellar Architecture to Enable the Most Powerful DeFi Strategies in the Market

After over a year of building, Sommelier’s new Cellar architecture is live. Strategists and DeFi builders now have access to the most powerful and flexible vault smart contract for executing DeFi strategies ever created. What we call Cellars V2 allows strategists to leverage any DeFi protocol which makes for an incredibly wide ranging design space. Additionally, it allows DeFi builders to incorporate automated and active portfolio management into their protocols to enhance yields and deliver streamlined user experiences.

Realizing the Sommelier Vision

Sommelier is its own sovereign blockchain built on the Cosmos SDK. The reason we built our own blockchain is because existing decentralized asset management protocols felt incomplete. The automation brought by auto-compounders was helpful, but they weren’t the set and forget solution that users needed them to be. As capital flowed into these vaults, yields would naturally compress, market dynamics would change, incentive rates would move and new opportunities arise. In short, strategies would make sense at the time they were deployed, but not 3 months, 6 months or a year later. The strategies were too passive and weren’t anticipating or responding to changes in the market.

As a result, other protocols tried to meet this active management need. They enabled strategies that could be run by a person (the strategist). However, this required them to make sacrifices to empower an individual or small group of individuals to have power over funds. What if they behaved maliciously? Do you want really want to trust a multi-sig with your funds?

Sommelier stands alone in terms of its active management capabilities over a decentralized architecture.

With nothing perfect in market, we decided to build it. The launch of Cellars V2 marks Sommelier fully realizing its initial vision of asset management that can predict and quickly respond to DeFi conditions using a fully decentralized architecture.

Cellars V2

At the heart of Cellars V2 is the adapter architecture. With adapters, strategies running on Sommelier can execute on DeFi protocols for which an adapter is developed. Additionally, it allows for multiple DeFi protocols to be used within the same strategy. The team at Seven Seas, for instance, is leveraging audited adapters for Aave, Compound, and Uniswap V3 in their Real Yield USD strategy to simultaneously manage lending and LP positions across all three DeFi applications to optimize for the best stablecoin yields.

Real Yield USD combines our dedicated app chain with the state-of-the-art smart contract architecture to deliver a groundbreaking stablecoin yield product.

The Real Yield USD strategy is just one example of what can be accomplished using Cellars V2. For instance, asset trading strategies now have the ability to go long or short, including with leverage, using adapters with lending protocols. Furthermore, to support strategists, the Sommelier team is developing additional adapters for other blue chip protocols, each of which will be fully audited, providing strategists access to the best of DeFi. Similarly, we’re also making it easy for other DeFi projects to build their own adapters.

Overall, the launch of Cellars V2 marks the next in what we’re sure will be many major breakthroughs for Sommelier building the ultimate protocol for decentralized asset management.

About Sommelier

Sommelier is an asset management protocol, built on the Cosmos SDK, that enables actively managed DeFi vaults on Ethereum. Vaults can do portfolio management, trade long-short, borrow-lend, or even farm. Additionally, Sommelier’s architecture allows independent strategists to leverage the power of off-chain computation by bringing algorithmically managed strategies on-chain. In doing so, Sommelier vaults can dynamically adapt to market conditions which provides enhanced earnings opportunities and risk mitigation to vault users whether they be individuals, institutions, protocols or DAOs . All vaults are enabled by audited smart contracts and controlled by protocol governance.

Sommelier was cofounded in 2020 by a prolific team of Ethereum and Cosmos developers including Zaki Manian and Kristi Poldsam. The protocol is currently in mainnet and actively seeks new contributors and community members.

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