Crypto Derivatives Exchange Stream Trading Raises $1.5M in Seed Funding

• Stream Trading raised $1.5 million in seed funding, valuing the company at $20 million.
• The protocol, which is almost profitable, is designed to give depositors exposure to high-yield rate arbitrage trades, for which it charges a 10% or higher fee.

The company building Stream Finance, one of the Ethereum blockchain's newest crypto derivatives platforms, has raised $1.5 million from Polychain and a handful of angel investors.

Stream Trading raised its seed round at a $20 million valuation, founder Diogenes Casares said in an interview with CoinDesk. He and co-founder Solal Afota built the team quickly to capitalize on this year's crypto bull market, which is paying fat dividends for trading platforms across decentralized finance (DeFi).

Derivatives exchanges are a fixture of the on-chain landscape for speculating on token prices, with platforms such as dYdX and Vertex getting much of the attention and hundreds of millions of dollars in crypto deposits. In comparison, Stream, which emerged from beta testing just this week, has $5 million in total value locked.

Still, that's already enough to nearly turn Stream profitable, Casares said. The protocol is designed to give depositors exposure to high-yield rate arbitrage trades, for which it charges a 10% or higher fee.

Over time Casares said Stream plans to become a decentralized perpetuals exchange that competes with dYdX and the other "legacy" names in DeFi derivatives, an industry barely five years old. He said most protocols focus too much on cutting fees while doing little to improve funding rates – the interest traders pay when speculating on the future price of assets.

"We're focusing more on the funding rate side than the swap fees side," he said.

Stream is also building with the super-hot restaking protocol Eigenlayer in mind, said systems engineer Emanuel Adamiak.

"Eigenlayer slashing enables us to have economic security, allowing us to have a low node count and higher throughput," he said.