Portfolio Management Legos

Hey everyone! I’ve made a few posts over the last month talking about my team team at [ While I think what we’re building is really great and improves DeFi user’s lives, I won’t shill you on that. Instead, I wanted to talk about an emerging user behavior that yall might find interesting since we always talk about DeFI as money legos.

Sommelier is a platform for automated DeFi strategies. Our strategies are non-custodial and automated like Yearn vaults, but a bit more dynamic. Our platform only has 5 strategies at the moment, all with different assets, risk tolerances and investment horizons. What we’re observing is that users have started participating in multiple strategies at the same time, effectively creating their own meta strategy. As an example, one user split their portfolio 60/40 across two strategies that hold BTC and ETH. While both strategies are probably 85% similar, one is a bit less volatile so they allocated slightly more to that strategy to reduce their overall volatility.

I can see this further happening with different stablecoin strategies. You could have the majority of your funds in a stablecoin strategy that optimizes lending on Aave and then allocate 10% to a risk-mitigated USDC-ETH trading strategy for a little extra yield.

Anyways, I think yall get the idea. The punchline is that I expect this money lego / composability theme to continue across DeFi, especially with other projects that are doing things similar to us.

Happy degening!

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