Market Data 
Austin Federa quit as the Solana Foundation’s head of strategy in 2024 to tackle what he saw as unfairness in the crypto trading environment. Eighteen months later, his company, DoubleZero, says it’s ready.
DoubleZero aims to eliminate proximity to an exchange’s servers as a competitive advantage for traders. The private fiber network removes latency, the time it takes for an order to reach the platform from a trader’s desk, as a factor and introduces a more equitable environment even though regulators — and traders — aren’t asking for it yet.
The problem, Federa says, is that crypto conflates decentralized with distributed. DeFi protocols are decentralized by virtue of their open-source code and permissionless validator sets, but when milliseconds determine who wins a trade, the laws of physics push validators to cluster in the same data centers anyway. On platforms like Hyperliquid, for example, Tokyo-based traders enjoy a roughly 200-millisecond edge over rivals abroad.
“Hyperliquid may be a decentralized system from a governance and user perspective, but it is not a distributed system,” Federa said in an interview with CoinDesk. “It is still co-located in the same environment, even if it’s run by multiple different entities.”
It’s a problem traditional finance has already faced. When the New York Stock Exchange developed its Mahwah, New Jersey data center over a decade ago, it engineered cable-length equalization to within a nanosecond because asymmetric access was bad for business, not because regulators required it. Simply, traders who felt disadvantaged would route their orders elsewhere.
Read more: A former Solana exec is taking a page out of Wall Street playbook to make global crypto trades faster
DoubleZero’s solution is timestamping.
The network aggregates private bandwidth from operators to route blockchain data over dedicated links, while giving venues tools to timestamp orders across global entry points and reconstruct a fair sequence similar in aim to the cable equalization used by the NYSE.
The challenge isn’t just speed, but verifiability. On a venue running over the public internet, a trader whose order arrives late has no way to distinguish ordinary network congestion from something more deliberate.
“Is that true because the public internet drops packets all the time, or is that true because you saw my transaction and said, ‘Hey, this guy’s pretty good, I don’t want to include this block,'” Federa said. “The counter-factual is really hard to prove.”
DoubleZero’s pitch is that a managed network with deterministic latency makes that distinction provable. Physics still applies: A New York trading desk routing through DoubleZero to reach Hyperliquid in Tokyo will not outrun a nearer competitor in AWS’s ap-northeast-1 region.
But the gap shrinks, and more importantly, the variance shrinks. Traders get not just lower latency but predictable latency, which is the property high-frequency trading firms actually pay for in traditional markets.
Federa’s broader point is that crypto is misreading what makes traditional markets fair. Regulators matter, but they’re not the main driver. FINRA, the body that polices most of Wall Street’s day-to-day conduct, is technically a voluntary self-regulatory organization. The Securities and Exchange Commission and Commodity Futures Trading Commission serve as backstops with enforcement teeth, but the day-to-day work of keeping markets fair is done by exchanges themselves.
They do it because their business depends on it. Venues that get a reputation for asymmetric access lose volume to venues that don’t.
If he’s right, DeFi’s latency problem isn’t waiting on regulators. It’s waiting on the moment a major venue decides fairness is a competitive advantage worth paying for.
Crypto has spent a decade proving you can build decentralized systems. The next decade will test whether anyone wants to build distributed ones, where the advantage isn’t based on where in Tokyo your server sits.
“No one wants to trade on an unfair platform,” Federa said.
Read the full article here
