Summary
TLDR: Retail investors priced out of Ethereum mainnet due to high gas fees are turning to layer-2 rollups like Arbitrum for yield vault options offered by Sommelier Finance. Sommelier’s Real Yield ETH vault on Arbitrum generates yield by providing liquidity and taking leveraged positions on staked ether. The DeFi protocol has attracted $71 million in deposits and plans to expand to more chains. Seven Seas Capital, a team spun out of Sommelier, develops vault strategies and audits protocols to mitigate risks. The team backtests strategies to avoid losses during volatile periods and aims to attract TVL by specializing in liquid staking ether and restaking using Eigenlayer. Manian believes Sommelier is well-positioned for the multichain future of Ethereum.
Key Points
1. Retail investors are turning to layer-2 rollups on Arbitrum due to high gas fees on Ethereum mainnet, with Sommelier Finance offering a 1-click yield vault option.
2. Sommelier’s Real Yield ETH vault on Arbitrum generates yield by providing liquidity and taking leveraged positions on staked ether, attracting around $71 million in deposits since launching in April 2023.
3. Seven Seas Capital, a team spun out of Sommelier, designs strategies for non-custodial vaults on Arbitrum, focusing on protocols with lower economic risk and utilizing data science, financial modeling, and smart contract development expertise for risk mitigation.