Austin Federa stepped down as head of strategy at the Solana Foundation in 2024 to address 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 optic network eliminates latency, the time it takes for an order to reach the platform from a merchant’s desk, and introduces a more equitable environment, even if regulators — and merchants — aren’t calling for it yet.
The problem, says Federa, is that decentralized and distributed crypto coincide. DeFi protocols are decentralized due to their open-source code and permissionless validator sets, but when milliseconds determine who wins a transaction, the laws of physics force validators to cluster in the same data centers anyway. For example, on platforms like Hyperliquid, Tokyo-based traders enjoy a roughly 200 millisecond advantage over foreign 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’s still in the same environment, even though it’s managed by multiple different entities.”
It’s a problem that the traditional financial sector has already faced. When the New York Stock Exchange developed its data center in Mahwah, New Jersey, more than a decade ago, cable lengths were equalized to within a nanosecond because asymmetric access was bad for business, not because regulators required it. Traders who felt wronged would simply route their orders elsewhere.
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DoubleZero’s solution is time stamping.
The network harvests private bandwidth from operators to route blockchain data through dedicated links, while giving venues tools to time-stamp orders through global access points and reconstruct a fair order similar in purpose to the cable equalization used by the NYSE.
The challenge is not only speed, but also controllability. In a location that runs over the public Internet, a merchant whose order arrives late cannot distinguish normal 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 is pretty good, I don’t want to include this block,’” Federa said. “The counterfactual is really hard to prove.”
DoubleZero’s thesis is that a managed network with deterministic latency makes that distinction demonstrable. The physics still apply: a trading desk in New York traveling via DoubleZero to reach Hyperliquid in Tokyo won’t avoid a closer competitor in AWS’s ap-northeast-1 region.
But the gap is closing, and more importantly, the variance is getting smaller. Traders get not only lower latency, but also predictable latency, the real estate that high-frequency trading firms in traditional markets essentially pay for.
Federa’s broader point is that crypto misinterprets what makes traditional markets fair. Supervisors are important, but they are not the main driving force. FINRA, the agency that oversees 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 act as a backstop with enforcement resources, 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. Locations that have a reputation for asymmetric access lose volume to locations that do not.
If he’s right, DeFi’s latency problem doesn’t wait for regulators. We’re waiting for the moment when a major venue decides that fairness is a competitive advantage worth paying for.
Crypto has proven for ten years that you can build decentralized systems. The next decade will test whether anyone wants to build distributed servers, where the advantage is not based on where in Tokyo your server is located.
“Nobody wants to trade on a dishonest platform,” Federa said.