Diogenes Casares, known for his successful endeavors in activist DAO investing, has embarked on a new venture with the launch of Stream Protocol. Stream Protocol marks Casares’ foray into decentralized trading platforms, with ambitious plans to evolve it into a decentralized perpetual swaps exchange.
Background and vision
Despite lacking a traditional startup founder background, Casares has made significant waves in crypto, notably through his hedge fund, Patagon Management. Specializing in activist DAO investing, Casares has strategically pushed underperforming startups towards returning funds to investors, amassing considerable wealth.
However, he aims to distance himself from the image of a corporate raider, expressing a desire to chart his course in the industry.
Stream protocol: A decentralized market maker
Casares’ latest venture, Stream Protocol, introduces a novel approach to decentralized trading. Described as a “decentralized market maker,” the platform aims to generate yield on users’ deposits while minimizing directional risk.
Drawing from Casares’ expertise in risk-free value (RFV) strategies, Stream Protocol targets tokens trading below their book value, leveraging opportunities in the market.
At the core of Stream Protocol’s trading mechanism lies a strategy that involves two distinct legs: one for generating yield and the other for hedging. Users participate in perpetual swaps exchanges to earn returns on one leg, typically through short positions, while simultaneously hedging their exposure through platforms like AAVE, borrowing to maintain a long position.
This setup allows Stream Protocol to capitalize on the discrepancy between the cost of hedging and the returns generated from perpetual swaps, resulting in passive returns for users without significant directional risk.
Casares’ strategic insights
Casares attributes Stream Protocol’s innovative design to his experiences navigating the intricacies of RFV strategies. Having honed his skills by identifying and capitalizing on opportunities in underperforming projects, he brings a wealth of strategic insights to the platform.
Stream Protocol represents a culmination of this knowledge, offering users a sophisticated yet accessible means of participating in decentralized trading.
As Stream Protocol begins its journey, Casares remains optimistic about its potential to disrupt the landscape of decentralized finance (DeFi). With plans to evolve the platform into a decentralized perpetual swaps exchange, Casares envisions a future where Stream Protocol plays a pivotal role in shaping the dynamics of the DeFi ecosystem.
As the platform gains traction and garners attention within the crypto community, all eyes will be on Casares and his team as they navigate the challenges and opportunities that lie ahead.
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