Axelar's General Message Passing (GMP), an interoperability protocol, enables the communication between the Cosmos and Arbitrum networks, and has enabled the yield optimization protocol, Sommelier, to become a cross-chain application. The addition of Sommelier's DeFi vaults to Arbitrum makes possible the rotation of capital across different assets and the optimisation of yields on crypto assets through lending and trading services on both the Sommelier blockchain as well as Ethereum's. This major development was given a huge boost with a $23 million Series A funding round, which was led by Polychain Capital and held in October 2021.
The GMP protocol allows for data and assets to be moved between the two blockchains, thus creating opportunities for cross-chain applications to operate. This allows for more intricate activity than wrapping, which is traditionally used when interoperability protocols impose the exchange of digital assets between chains. Axelar has a distinct advantage over its competitors as it has its own virtual machine to facilitate complex operations, such as transmitting data and instructions between different smart contracts held on two different blockchains.
The news of the GMP protocol and addition of Sommelier to Arbitrum was met with great enthusiasm by Offchain Labs, whose Senior Partnership Manager, Peter Haymon, stated that they were "delighted to welcome high-caliber protocols such as Sommelier who focus on finding innovative ways to improve capital efficiency in DeFi on Arbitrum One". Similarly, Axelar's Co-Founder Sergey Gorbunov pointed out that Sommelier's strategies had great potential, which had been "unlocked" by the GMP protocol, enabling these strategies to be executed on the Arbitrum network.
In conclusion, the addition of Sommelier to the Arbitrum network is an exciting advancement for the DeFi space, as users can now take advantage of the opportunity to optimise their crypto-assets yields through various lending and trading services, whilst also enjoying the benefits that come with the extended cross-chain compatibility made possible by Axelar's GMP protocol.
Leo Price
- 2023-05-02
Axelar's GMP Enables Sommelier to Join Arbitrum Network
Axelar's General Message Passing (GMP) interoperability protocol has enabled Sommelier to join the Arbitrum network, providing users with the opportunity to optimize their yields on crypto assets.
