Diogenes Casares doesn't have the kind of background that suggests he's a startup founder. The New York University student has a track record of bringing crypto companies down, not building them up.

Over the last year or two, Casares has run one of the only hedge funds in crypto that specializes in activist DAO investing, Patagon Management. In that time he's made millions of dollars by pushing underperforming startups to return money to their investors, most recently crypto governance project Aragon.

But Casares, the son of crypto bank Xapo's founder Wences Casares, told CoinDesk he doesn't want to be known as the crypto world's Carl Icahn – the Wall Street corporate raider who's been in the spotlight since the 1980s – buying up tokens to wield power over other people's projects.

Casares now has his own company: a trading platform called Stream Protocol that he plans to turn into a decentralized perpetual swaps exchange. For now, it's what he's calling a "decentralized market maker" that generates yield on users' deposits without exposing them to directional risk.

His project's design is informed by Casares' experiences in the world of RFV, short for risk-free value. Generally speaking, it's a highly profitable trading strategy that targets tokens trading below their so-called book value – essentially a project's net worth. "Risk free" is a bit of a misnomer; the strategy depends on its practitioners successfully closing the discount gap.

Casares has found plenty of success in RFV by going after projects that failed. "We've kind of learned the products that don't work," he said.

He explained how Stream's trading will work: "You have basically two legs, the one you get paid on (generally short) and the one you are hedging on (generally long). To get paid you need to be on a perp DEX, we take out say 2x-3x leverage. We then do the exact same thing on AAVE, and borrow to be long the same amount. Because our cost to hedge is less than what we are getting paid by the perpetuals exchange, we are making passive returns without being directionally exposed."

The plan sees Stream leverage this product to ultimately create its own perpetuals exchange that Casares says will be "way more capital efficient" than GMX and Hyperliquid, two of the biggest current names in perps.

Casares said much of their growth is contingent on "unsustainable" incentive systems, like points programs and other mechanisms that woo people in, but cannot run forever: "Once that incentive system runs out users are gonna be, 'Why am I paying such ridiculous funding rates and getting relatively bad execution especially when markets move.'"