Austin Federa resigned as head of strategy at the Solana Foundation in 2024 to address what he considered unfair in the cryptocurrency 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 eliminates latency, the time it takes for an order to reach the platform from a trader’s desktop, as a factor and introduces a more equitable environment even though regulators (and traders) do not yet require it.
The problem, Federa says, is that cryptocurrencies combine decentralization with distribution. DeFi protocols are decentralized by virtue of their open source code and pools of permissionless validators, 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 an advantage of about 200 milliseconds over their offshore rivals.
“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 located in the same environment, even if it is managed by several different entities.”
It’s a problem that traditional finance has already faced. When the New York Stock Exchange developed its data center in Mahwah, New Jersey, more than a decade ago, it designed cable length equalization in a nanosecond because asymmetric access was bad for business, not because regulators required it. Simply put, merchants who felt disadvantaged would send their orders elsewhere.
Read more: A former Solana executive is taking a page from Wall Street’s playbook to accelerate global cryptocurrency trading
DoubleZero’s solution is timestamp.
The network aggregates traders’ private bandwidth to route blockchain data over dedicated links, while giving venues tools to time-stamp orders at global entry points and reconstruct a fair sequence similar in aim to the wire equalization used by the New York Stock Exchange.
The challenge is not just speed, but verifiability. At a location that operates on the public Internet, a merchant whose order arrives late has no way of distinguishing ordinary network congestion from something more deliberate.
“Is that true because the public Internet drops packets all the time, or is it true because you saw my transaction and said, ‘Hey, this guy is pretty good, I don’t want to include this block,'” Federa said. “The counterfactual is really difficult to prove.”
DoubleZero’s argument is that a managed network with deterministic latency makes that distinction provable. Physics still applies: a New York trading desk passing through DoubleZero to Hyperliquid in Tokyo won’t leave behind a closer competitor in the ap-northeast-1 AWS region.
But the gap is narrowing and, more importantly, the variance is narrowing. Traders get not only lower latency but also predictable latency, which is the property that high-frequency trading companies actually pay for in traditional markets.
Federa’s broader point is that cryptocurrencies are misunderstanding what makes traditional markets fair. Regulators matter, but they are not the main driver. FINRA, the body that oversees most of Wall Street’s daily conduct, is technically a voluntary self-regulatory organization. The Securities and Exchange Commission and the Commodity Futures Trading Commission serve as backup with law enforcement capabilities, but the day-to-day work of keeping markets fair is done by the exchanges themselves.
They do it because their business depends on it. Places that have a reputation for having asymmetric access lose volume to those that don’t.
If he’s right, DeFi’s latency problem isn’t waiting for regulators. It’s waiting for the moment when a major venue decides that equity is a competitive advantage worth paying for.
Crypto has spent a decade proving that decentralized systems can be built. The next decade will test whether anyone wants to build distributed systems, where the advantage is not based on where the server is located in Tokyo.
“No one wants to trade on an unfair platform,” Federa said.
