As the market is getting flushed with new protocols, and products from the traditional finance world (derivatives, perps, leverage etc.) enter the DeFi ecosystem, the era of simple funds and basic strategies needs a turbocharged remake. The majority of existing platforms in the current market perform actions which were best suited to the past few years. For example, some invest in an index portfolio. Others simply invest users money into a specific pool, and then reinvest rewards over time. In this scenario, when the pool-specific strategy stops working and the users abandon the strategy like a deserted city, they move onto newer pool-specific strategies that work in the newer market conditions.
But, what if there was a way for us to create a dynamic strategy which could adjust its composition based on current market conditions or predetermined metrics? Moreover, what if there was an architecture that allows the metric calculations to be done off-chain while utilizing live data feeds to adjust your current positions, and only the newer instruction set needed to be sent to the strategy? We would be able to create more nimble, flexible, and most importantly, profitable and resilient strategies. Further, in traditional finance, we have come to rely on the power of off-chain computation using financial and data modeling techniques, because it allows your strategy to be proprietary and include the work of highly sophisticated quant and data science teams. Sommelier aims to do all of this but without the tradeoff of centralization that exists in traditional finance.
Welcome to the era of strategies that no longer have to recreate new vaults for newer conditions. Strategies now can monitor & predict volatility, volume, even profit percentage, and financial ratios that we are used to in traditional finance. These strategies can adjust the positions to achieve optimal outcomes. We have deliberately rethought every layer of execution to be able to provide one of the first mid-frequency strategy execution platforms on a highly secure validator set (and not a multisig wallet).
Sommelier runs on Cosmos with the use of one of the best performing ETH bridges. Further, we are currently expanding this bridge to allow access to other chains (like Polygon, Avalanche, etc) so strategies are not tied to just high gas ETH markets. All of this is built by a team who requires no introduction in the Cosmos ecosystem. We are building connections to new markets, and development is being focused on cross chain asset movements to leverage the best opportunities wherever the market takes us.
Traditional Finance has come to rely on the power of off-chain computation, since it allows their strategies to be proprietary and include the work of highly sophisticated data modeling, machine learning models which would be impossible to do On-chain. Sommelier aims to do all of this but without the tradeoff of centralization that exists in traditional finance thanks to its Validator Set.
