Sommelier, a project based on Cosmos, is currently operating cross-chain DeFi vaults on Ethereum Layer 2 network Arbitrum One.
Interoperability protocol Axelar has made Sommelier, a yield optimization protocol on Cosmos, a cross-chain application by connecting it to the Ethereum Layer 2 network Arbitrum One.
The DeFi repositories of Sommelier enable users to optimize returns on their crypto assets through lending and trading services, as well as through the autonomous rotation of capital across various assets. These DeFi vaults previously only worked with Sommelier’s blockchain in the Cosmos ecosystem, but now they’ll also work with Arbitrum, a Layer 2 blockchain built by Offchain Labs.
Peter Haymond, senior partnership manager at Offchain Labs, stated, “We are thrilled to welcome high-quality protocols such as Sommelier on Arbitrum One. Sommelier is focused on finding innovative ways to increase capital efficiency in DeFi.”
Sommelier will utilize the General Message Passing (GMP) protocol developed by Axelar. This is a general-purpose communication protocol between the Cosmos ecosystem and Ethereum-based smart contract-supporting blockchains, such as Arbitrum.
“Sergey Gorbunov, a co-founder of Axelar, stated that Axelar GMP enables Sommelier to transmit strategy instructions to vaults on Arbitrum One, thereby unleashing the potential of Sommelier’s strategies.”
The communication protocol enables the transfer of data and assets between the two ecosystems, allowing cross-chain applications to function. Typically, interoperability protocols concentrate on enabling users to transmit assets between chains using mechanisms such as packaging; however, passing data can be difficult.
With its own computing environment, the Axelar Virtual Machine, Axelar enables more complex operations, such as the transmission of data and commands between smart contracts on two distinct chains.
Former main developer for Cosmos and Tendermint, Zaki Manian, raised $23 million for Sommelier in a Series A funding round sponsored by Polychain Capital in October 2021.
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