First-of-its-kind decentralized and automated portfolio manager software leverages data streams from liquidity pools to identify investment opportunities and reallocate capital for maximum yield
SAN FRANCISCO, Oct. 20, 2021 /PRNewswire/ -- Sommelier, the first-of-its-kind decentralized and automated DeFi portfolio manager software, today announced it has raised $23 million in Series A funding. The round was led by Polychain Capital with participation from existing investor Alameda Ventures and with new participation from Zola Ventures, Byzantine Ventures, Tendermint Ventures, Secure Ventures, D1 Ventures, and Ferngrove Ventures.
Sommelier's software acts as a co-processor to the Ethereum Virtual Machine (EVM) and gives DeFi Liquidity Providers (LPs) unprecedentedly powerful tools for authoring and automating complex liquidity management transactions without the need of a trusted intermediary. This round of funding comes as the Sommelier network starts its mainnet powered by a decentralized network of leading blockchain validators. The financing will enable the team to upgrade the Sommelier network software to launch Sommelier Cellars, a layer of liquidity management software targeting the top Ethereum and Ethereum Virtual Machine compliant blockchains as well as the rapidly growing Layer 2 liquidity pools.
"Sommelier is bringing the promise of the Cosmos blockchain and Tendermint consensus to power a new approach to financial engineering and portfolio management," said Zaki Manian, Co-Founder of Sommelier. "Over the past decade, we've seen incredible decentralized foundations built as a number of blockchain platforms have emerged with numerous use cases, and we're excited to use this funding to tap the potential of blockchains to create automated portfolio management tools that surpass even what's possible in traditional, centralized finance."
The nature of portfolio management is ripe for crypto disruption. DeFi trading platforms like Uniswap, Curve, and Sushiswap have given LPs a glimpse of the possibilities of DeFi, but anyone familiar with traditional finance can see that portfolio managers do not have a way to develop, test, and deploy capital allocation strategies that can run securely in a decentralized and automated manner. Sommelier's software changes that by giving crypto portfolio managers the ability to publish portfolio strategies on a public blockchain that will automate its execution across chains and wherever liquidity moves. This unlocks a whole new dimension for DeFi, including the ability to rebalance portfolios, set limit or batched orders, execute cross chain transactions, as well as a host of other features that portfolio managers have come to expect from Traditional Finance (TradFi), but that are not currently available in DeFi.
"Sommelier is revolutionizing traditional portfolio management by empowering Liquidity Providers with decentralized execution automation," said Olaf Carlson-Wee, Founder and CEO of Polychain Capital. "Zaki and Sommelier's world-class team is bringing the right product to market at exactly the right time as more and more individuals and institutions make DeFi part of their investing strategies and we are proud to play a role in their growth through this important funding round."
Already, Liquidity Providers can use Sommelier's Pairings to automatically optimize the placement and concentration of their capital across Uniswap v3 liquidity pools. This makes providing liquidity a far simpler and more attractive opportunity for LPs with large amounts of capital, who have previously had to closely monitor the volume, spread (slippage), and volatility across a large number of pools in which they allocated capital.
Sommelier has experienced exponential growth as LPs have caught on to this value proposition. In the first six months since the launch of its Pairings Uniswap v3 liquidity manager application, Sommelier has helped LPs place over $10 million in liquidity on Uniswap V3, which successfully generated over $2 million in fees for portfolio owners. The Sommelier community will next vote to approve and deploy community-governed Cellars, which are programs that will fully automate Liquidity Management via the Sommelier blockchain. This will accelerate the pace and new development of Sommelier's blockchain software and expand the Sommelier ecosystem and community of Liquidity Providers.
Sommelier is the most powerful coprocessor yet for DeFi traders and Liquidity Providers (LPs). It consists of the Cosmos Stargate SDK, its Tendermint-based consensus layer and a decentralized, bi-directional Ethereum bridge, managed by a global network of validator computers. Liquidity Providers will be able to use the Sommelier to author and execute complex, and automated financial transactions, such as portfolio rebalancing, limit orders, as well as a host of other features that token holders have come to expect from CeFi, but that are not currently available in DeFi.
Sommelier was founded in 2020 by Zaki Manian, a lead developer on the Cosmos protocol and Tendermint, and a prolific team of Ethereum and Cosmos developers. Sommelier is currently in mainnet and actively seeks new contributors and community members.
To learn more about Sommelier, please visit https://sommelier.finance/
To use Sommelier, try the Pairings App at https://app.sommelier.finance/
To participate in the community, please join the Telegram group https://t.me/getsomm
To follow the project on Github, please star the project https://github.com/PeggyJV/sommelier
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