Sommelier DeFi strategy vaults now live on Arbitrum

Arbitrum is the first multichain expansion destination for Real Yield ETH

article-image

Sommelier Finance & Adobe Stock modified by Blockworks

share

Retail investors, priced out of Ethereum mainnet by high gas fees and shifting their attention to layer-2 rollups, now have a 1-click yield vault option on Arbitrum, courtesy Sommelier Finance.

The first foray into Arbitrum One will be 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 technically already multichain.  Its initial vaults — called “cellars” — are on Ethereum mainnet, while managed via the native app-chain. Since launching in April 2023, Sommelier has attracted around $71 million in deposits across a growing list of vault offerings, data from DeFi Llama shows.

The planned expansion to Arbitrum was announced in May 2023 and caps two years of research and development work, according to Sommelier co-founder Zaki Manian, and the protocol is targeting more chains later this year.

“We’ve had to glue together, IBC, Axelar [general message passing], Chainlink [cross-chain interoperability protocol] all like working together in this machine,” Manian told Blockworks. “Ultimately, it will deliver this user experience where you can feel like you are being part of a native layer-2 experience, but it’s really getting you best-in-class yields from pretty much anywhere.”

Read more: DeFi Strategies Get a Multichain Boost From Sommelier and Axelar

The non-custodial vaults connect multiple DeFi protocols according to strategies designed by Seven Seas Capital, a team of 5 which spun out of Sommelier early in its development.

Seven Seas not only develops the vaults strategy but independently audits the protocols they select, in an effort to mitigate both financial and smart contract risks for end users, said CEO Sun Raghupathi.

“Arbitrum, from a DeFi economic risk perspective, it’s a little bit lower than doing things on other [layer-2s] because there’s more liquidity there,” Raghupathi told Blockworks.

The initial vault only uses ETH and Lido stETH, in Uniswap and Aave, which Raghupathi calls “as blue chip as you can get.”

“Obviously, there are riskier protocols on Arbitrum,” he said. “We are not touching those yet, but I think there is something to be said about the risk appetite being higher on L2s.”

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 the liquid stating ether and restaking using Eigenlayer.

When employing leverage, the team backtests strategies against the prior 6-12 month range of historical volatility and chooses parameters to keep the strategy safe. Through a combination of design and active management, they have successfully avoided losses during tumultuous periods such as the March 2023 USDC depeg and the July 2023 Curve exploit.

“I think it’s like been extremely validating for Sommelier as a system, because what we’ve been able to do as strategists is ingest, not just on-chain data, but even things like news events, sentiment from Twitter and stuff like that, and to get out from under these events before they happen,” Raghupathi said.

Manian thinks the infrastructure Sommelier has built is primed to expand the multichain future of Ethereum.

“We have this ability to have vaults that hold positions across multiple chains,” he said. “​​So what this ends up being is, we can now have these Arbitrum cellars, but they could hold positions on Base on Mantle, on kind of anywhere.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (19).png

Research

Suilend has grown into the top money market and liquid staking provider on Sui. STEAMM, Suilend’s Superfluid AMM, presents a compelling avenue for growing market share within Sui’s DEX landscape and revenue generation for the protocol. Suilend’s multi-product suite position it well for owning market share across key verticals. While current metrics across the Sui ecosystem are likely inflated due to Sui Foundation incentive programs, SEND trades at amongst the lowest multiples in the lend/borrow sector, suggesting that a bull case for continued growth in the ecosystem may be mispriced.

article-image

Silk Road founder Ulbricht made a triumphant return to the Bitcoin Conference, 10 years on from sentencing

article-image

A Blockworks Research report looked at who could take up some of the marketshare in the launchpad space

article-image

Business-to-business stablecoin payments are on the rise, per a report from Artemis, Dragonfly and Castle Island

article-image

Crypto continues to do its thing: incentivizing behavior

article-image

Kraken will soon offer Backed ‘xStocks’ as Solana tokens

article-image

In a unanimous decision, the US Court of International Trade has ruled that Trump’s IEEPA tariffs are unlawful