According to Blockworks, retail investors now have a 1-click yield vault option on Arbitrum, thanks to Sommelier Finance. The first venture into Arbitrum One is Sommelier's Real Yield ETH vault, which generates yield by providing liquidity and taking leveraged positions on staked ether (ETH). The DeFi protocol, built as a Cosmos app-chain, was already technically multichain, as its initial vaults, called 'cellars,' are on the Ethereum mainnet, while managed via the native app-chain. Since its launch in April 2023, Sommelier has attracted around $71 million in deposits across a growing list of vault offerings, according to data from DeFi Llama. The expansion to Arbitrum was announced in May 2023 and follows two years of research and development work, said Sommelier co-founder Zaki Manian.
The non-custodial vaults connect multiple DeFi protocols based on strategies designed by Seven Seas Capital, a team of five that spun out of Sommelier early in its development. Seven Seas not only develops the vaults strategy but also independently audits the protocols they select to mitigate both financial and smart contract risks for end users, said CEO Sun Raghupathi. The initial vault only uses ETH and Lido stETH, in Uniswap and Aave, which Raghupathi calls 'as blue chip as you can get.' Seven Seas' team background is in data science, financial modeling, and smart contract development, and its vaults have appealed to DeFi protocols looking to attract TVL, particularly those specializing in liquid stating ether and restaking using Eigenlayer. The team backtests strategies against the prior 6-12 month range of historical volatility and chooses parameters to keep the strategy safe.
