March 11, 2021: Days of Wine and Raises 🍇🍷

Sommelier Finance raises seed funding to build an Ethereum co-processor

Here are today’s trends to watch from Curve Market Cap:

The DeFi ecosystem got a bit juicier yesterday with the news of Sommelier Finance raising investment valued at about 61 BTC.

CoinDesk @CoinDesk

NEW: @zmanian's @sommfinance raised $3.5 million from Standard Crypto, Multicoin Capital and Alameda Research to solve a sore spot for smaller #DeFi investors. @wsfoxley reports

trib.alZaki Manian’s Sommelier Finance Raises $3.5M to Help DeFi Investors Avoid Impermanent Loss - CoinDeskSommelier raised $3.5 million from Standard Crypto, Multicoin Capital and Alameda Research in return for SOMM tokens.

The current release of Sommelier aims to help DeFi investors avoid impermanent loss. Of course, this is a problem that seldom impacts Curve users due to Egorov’s galaxy-brain invariant formula:

So why is it worth paying attention to Sommelier? Well, for starters, it’s the only company with a logo inspired by a licentious Calabi-Yau manifold:

But more importantly, Sommelier has a vision of building an Ethereum co-processor that solves some real tangible problems in the world of Ethereum development:

sommfinance @sommfinance

co·proc·es·sor /kōˈpräsesər/ noun: coprocessor; plural noun: coprocessors; noun: co-processor; plural noun: co-processors a microprocessor designed to supplement the capabilities of the primary processor.

This may sound like marketing fluff, but it’s a genuine pain point in blockchain development. Have you ever tried to schedule a cron job in Ethereum? It’s quite complicated.

Ethereum Alarm Clock tried to create a solution to this six years ago, but it wasn’t as decentralized as needed and the project appears to be abandoned. Chainlink has an alarm clock functionality on their testnet which will cost a $LINK token (~$30) per call. It’s possible to patch together a solution using Polkadot, but you might spend a lifetime deciphering their architecture when just you want one line in a crontab file.

Sommelier investor Kyle Samani lays out in detail the specific pain points this issue causes in the world of DeFi in a great thread:

Kyle Samani @KyleSamani

1/ There are lots of things you may want to do on Ethereum, but that you can't quite do *on Ethereum* Things like... Stop loss orders Moving out of LPing in Sushiswap when vol picks up Automatically topping up collateral based on price movements and a lot more

Kyle Samani @KyleSamani

2/ The core problem is that you need to be able to monitor the state of Ethereum in real time, and then 1) be able to construct and sign transactions 2) be in control of the assets to move Sommelier uses the Cosmos Stargate SDK to enable Ethereum defi users to do these things

Co-investor Alok Vasudev adds:

ALOK VASUDΞV @AlokVasudev

One example use case Sommelier can enable is dynamic management / automation of LP activity. Say you wanted to implement an automated stop-loss policy for providing AMM liquidity in a trustless way. Now you can.

It happens to be an exact problem we’re facing in scaling out Pool Party. We’ve proven it’s possible to efficiently get users into Curve Pools at minimal gas prices, as evidenced by our proof of concept Party Bus. But somebody has to drive the bus. For our proof of concept, we just left the keys sitting in the ignition so anybody can who likes can drive the bus when it’s full. But at scale we would need to automate bus trips, and a service like Sommelier is building could become that solution.

As we’ve seen, it’s a difficult problem to solve, but the internet seems excited by the fundraising news:

Peng Zhong ⚛️ @zcpeng

Congrats to @zmanian & co on the $3.5 million raise for Sommelier Finance. This will establish @cosmos proof-of-stake consensus as a super compelling benefit to the @ethereum DeFi community. Excited to see the project grow from here.

CoinDesk @CoinDesk

NEW: @zmanian's @sommfinance raised $3.5 million from Standard Crypto, Multicoin Capital and Alameda Research to solve a sore spot for smaller #DeFi investors. @wsfoxley reports https://t.co/6GnveU8V8T

Or maybe people are just excited at the prospect of stacking more tokens, since everybody in this space are drunken degenerates:

Alameda Rugsearch @AlamedaRSearch

Most interesting projects without a token (yet) on my watchlist: Sommelier Finance @getsomm_ Cloque Finance @CloqueFinance Potion Labs @PotionLabs Drops @dropsnft Charged Particles @DefiNft Tracer Finance @tracer_finance

At any rate, we can only assume their impressive team is working on a Curve solution, and we’ll keep everybody posted if and when they launch this.

In the meantime, the video launch AMA by founder and OG Zaki Manian is well worth a watch, with or without a beverage in hand:

Zaki Manian @zmanian

Our Vision is not replace Ethereum. But to make the Ethereum Brain more powerful.

Zaki Manian @zmanian

Sommelier AMA

pscp.tvZaki Manian @zmanianSommelier AMA

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