Sommelier raises $3.5m seed round to build a new co-processor for Ethereum's world computer
Sommelier, a decentralized finance (DeFi) blockchain protocol and Ethereum bridge that acts as a co-processor to the Ethereum world computer, announced a $3.5 million series seed investment led by Standard Crypto and with participation from Multicoin Capital, Alameda Ventures, Proper Cygni and Power Planet Holdings. The money will be used to fund the development of Sommelier's multichain protocol and its flagship decentralized finance (DeFi) applications, which are expected to launch in Q1 2021.
Sommelier consists of the Cosmos Stargate SDK, its Tendermint-based consensus layer and a decentralized, bi-directional Ethereum bridge, managed by a global network of validators. Liquidity Providers (LPs) will be able to use Sommelier to author and execute complex, 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 centralized finance (CeFi), but that are not currently available in DeFi.
Zaki Marian, Co-founder, Sommelier: "Sommelier's protocol unlocks the ability to augment Ethereum transaction computation and execution as a co-processor works to help the main CPU in a computer. Sommelier programmatically routes DeFi liquidity around the entire Ethereum network in ways that massively improve the experience for developers and liquidity providers. With Sommelier, LPs can detect and automatically significantly reduce the risk of impermanent loss and more effectively capture returns across any Ethereum DeFi exchange or application. Without Sommelier, LPs are simply unable to monitor and execute effectively in such a massive surface area. While Sommelier was designed and future-proofed as a multichain ready at mainnet, I am particularly excited about Ethereum's DeFi ecosystem and plan to bring our platform to market here first."
With over $39 Billion now locked in decentralized finance applications, a robust ecosystem of Automated Market Makers (AMM), decentralized exchanges, and lending markets has emerged. Uniswap, a decentralized trading protocol, alone boasts over $50 Billion in cumulative trading volume and over 60,000 unique Liquidity Providers. As trading volume has increased and venues have fragmented and creating sound, risk-adjusted returns has become far more challenging. Liquidity Providers need more computational power and speed to effectively manage their positions across exchanges, farms, and insurance products. The Sommelier protocol provides those tools to make it possible to scale the impossible task of paying attention and acting in a timely manner to the entire market.
Kyle Samani, Managing Partner, Multicoin Capital: "Zaki is one of the most capable engineers and operators in all of crypto. It's no coincidence that he timed his second project after Cosmos with the cambrian explosion that's happening in DeFi. Sommelier helps liquidity providers scale their ability to analyze and execute real-time transactions against all possible Ethereum yield-stabilizing or yield-maximizing strategies, simultaneously reducing risk and growing returns."
Alok Vasudev, Managing Partner, Standard Crypto: "We are thrilled to partner with Sommelier to advance the state of the art in DeFi infrastructure. Sommelier lets Ethereum users perform sophisticated financial operations far beyond what's currently possible, yet in a way that is fully compatible with the existing ecosystem. Sommelier is an acknowledgement of Ethereum's importance in DeFi as well as the opportunity to augment its feature set. Zaki and the team he's assembled have a rare combination of world-class technical prowess, profound product insight, and valuable experience from leading multi-billion-dollar crypto-networks."
The team behind the Sommelier protocol are some of the leading engineering minds from the Cosmos and Ethereum blockchain ecosystems. Notably, Zaki Manian, a key developer of Cosmos, Tendermint and co-founder of Iqlusion is leading the project with Jack Zampolin, the former product lead at Cosmos AIB and Akash networks; Federico Kunze, Senior Software Engineer at Interchain, Core Engineer of the IBC Protocol and Cosmos SDK framework; Justin Kilpatrick, CTO of Althea and former Red Hat engineer; Jehan Tremback, and Deborah Simpier, also co-founders of Althea; Kevin Kennis, former API lead at Bitmex; and Tony Arcieri Cofounder of Iqlusion and well known cryptography engineer.
While still in alpha, Sommelier is launching its first DApp today on the Ethereum Blockchain that will allow users to identify and add liquidity to the best performing Uniswap pools and remove liquidity from risk of impermanent loss. The full protocol is expected to launch into general availity on mainnet in late Q1 2021.