Axelar, a protocol for interoperability, has enabled Sommelier, a protocol for yield optimization on Cosmos, to become a cross-chain application.
Axelar, an interoperability protocol, has helped Sommelier, a yield optimization protocol on Cosmos, become a cross-chain application. Sommelier’s DeFi vaults can now access Arbitrum One, a Layer 2 network on Ethereum that offers lower fees and faster transactions.
DeFi vaults are smart contracts that shift capital automatically between various assets and platforms to maximize user returns. With Axelar’s support, Sommelier’s DeFi vaults can now operate on the Arbitrum blockchain and the Cosmos and Ethereum blockchains.
“Offchain Labs is excited to welcome Sommelier, an innovative protocol for capital efficiency in DeFi, to Arbitrum One,” stated Peter Haymond, senior partnership manager at Offchain Labs, the developer of Arbitrum.
Sommelier leverages Axelar’s General Message Passing (GMP) protocol to communicate with Arbitrum
This protocol enables the exchange of data and commands between the Cosmos ecosystem and blockchains, such as Arbitrum that support Ethereum-compatible smart contracts.
Axelar co-founder Sergey Gorbunov said that their protocol could transfer data and logic, not just assets, between smart contracts on different chains using their own Axelar Virtual Machine, which allows Sommelier to send instructions to its vaults on Arbitrum One and unlock the potential of its strategies.
Axelar, co-founded by former Cosmos lead developers Zaki Manian and Sergey Gorbunov, enables Sommelier to send instructions to its vaults on Arbitrum One and unlock the potential of its strategies using its GMP protocol, which supports a diverse and interconnected landscape of blockchains.
The DeFi vaults of Sommelier will have access to unique applications on Arbitrum One, such as the decentralized exchange GMX, which offers leveraged trading and perpetual contracts. In comparison to Ethereum, Sommelier’s vaults can also benefit from the lower fees and faster transaction speeds of Arbitrum One.
Sommelier and Axelar intend to expand their integration to other Layer-2 blockchains, thereby establishing a multichain DeFi ecosystem that takes advantage of the best of both worlds: the creativity and scalability of Cosmos and the liquidity and composability of Ethereum.
