From DAO Activist to Founder: How Diogenes Casares Is Building Stream Protocol

The crypto industry rarely sees its biggest disruptors pivot from attacking companies to building them. Yet Diogenes Casares, the NYU student who made headlines for pressuring underperforming DAOs to return capital to investors, is doing exactly that. Rather than continue running one of crypto’s only hedge funds specializing in activist DAO investing—Patagon Management—he’s now channeling his experience into founding Stream Protocol, a next-generation trading platform designed to become a capital-efficient decentralized perpetual swaps exchange.

The trajectory marks a fundamental shift in how Diogenes Casares views his role in the industry. “I don’t want to be known as the crypto world’s Carl Icahn,” he told CoinDesk, distancing himself from the Wall Street raider archetype. Instead, he’s building something new—though the strategic thinking that made him effective as an activist investor is clearly informing his entrepreneurial direction.

The Foundation: Learning From DAO Failures

Diogenes Casares’ success as an activist investor came from a specific playbook: identifying tokens trading below their fundamental value and orchestrating campaigns to unlock that value for shareholders. His most recent high-profile target was Aragon, where leaked documents revealed the governance project seriously considered selling assets to raise capital. Over the previous years, this strategy had generated substantial wealth by going after projects that underperformed their potential.

“We’ve kind of learned the products that don’t work,” Casares explained, emphasizing how his activist background informed what works in crypto. This education in failure—what doesn’t work, what token structures collapse under market pressure, which incentive systems prove unsustainable—became the intellectual foundation for Stream Protocol.

The shift from identifying broken systems to building better ones represents the natural evolution of an investor who spent years understanding market inefficiencies. Rather than profiting from fixing other people’s broken projects, Diogenes Casares is now designing a platform explicitly to avoid those pitfalls.

Stream Protocol: Redefining Capital Efficiency

Stream Protocol operates as a decentralized market maker, generating yield on user deposits without exposing them to directional risk. This design is built on what’s known as RFV strategy—or risk-free value—a trading approach that exploits discrepancies between different markets.

Here’s how it works in practice: traders simultaneously hold two positions. The paying position (typically a short) sits on a perpetual DEX, where they employ 2x to 3x leverage. The hedging position (typically a long) mirrors that exposure using a lending protocol like AAVE, where they borrow to maintain the same amount of long exposure. Because the cost to hedge through AAVE is lower than the premium paid on the perpetual exchange, users collect passive returns without any directional market bet.

Diogenes Casares plans to evolve Stream Protocol into its own perpetuals exchange, specifically engineered to outcompete existing platforms like GMX and Hyperliquid on capital efficiency. His critique of current market leaders is pointed: much of their growth depends on “unsustainable” incentive mechanisms—points programs, token rewards, and promotional structures that attract users but cannot operate indefinitely.

“Once that incentive system runs out, users are gonna ask: Why am I paying ridiculous funding rates and getting relatively poor execution, especially when markets move?” Casares said. This observation cuts to the heart of why Stream Protocol’s model matters—it offers genuine economic value rather than temporary token incentives, creating a more durable competitive moat.

The Activist Investor Becomes a Builder

What distinguishes Diogenes Casares’ entry into protocol building is the perspective he brings. Unlike founders who ideate from first principles, he’s architecting solutions based on what he learned doesn’t work. His years studying which projects fail, which incentive structures collapse, and which trading strategies prove genuinely profitable inform every design decision in Stream Protocol.

The move also signals something broader about crypto’s maturation. The most effective builders aren’t always the ones who started with the technology—they’re sometimes the ones who learned by studying what failed. Diogenes Casares embodied that principle as an activist investor; now he’s testing whether that principle scales to building something from scratch.

Whether Stream Protocol ultimately succeeds depends on execution, market timing, and the sustainability of its capital-efficiency thesis. But the transition from DAO activist to founder demonstrates one crypto investor’s faith that the lessons learned from attacking broken systems can point toward building better ones.