Austin Federa stepped down as the Solana Foundation’s chief strategy officer in 2024 to address what he saw as injustice in the crypto trading community. 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 fairer environment, even if regulators – and traders – aren’t asking for it yet.
The problem, Federa says, is that crypto confuses decentralized with distributed. DeFi protocols are decentralized by virtue of their open source code and permissionless set of validators, but when milliseconds decide who wins a trade, the laws of physics push validators to congregate in the same data centers anyway. On platforms like Hyperliquid, for example, Tokyo-based traders enjoy a head start of around 200 milliseconds over overseas competitors.
“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 co-located in the same environment, even though 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 developed cable length equalization to within a nanosecond because asymmetric access was bad for business, not because regulators required it. Simply put, traders who felt disadvantaged would route their orders elsewhere.
Read more: A former Solana executive is taking a page out of the Wall Street playbook to speed up global crypto trades
DoubleZero’s solution is timestamping.
The network aggregates private bandwidth from operators to route blockchain data over dedicated links, while providing venues with tools to timestamp orders across global entry points and reconstruct a fair sequence similar to the cable settlement used by the NYSE.
The challenge is not just speed, but verifiability. In a venue that runs over the public internet, a trader whose order arrives late has no way of distinguishing ordinary network congestion from something more deliberate.
“Is it 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’m not going to include this block,'” Federa said. “The counterfactual is really hard to prove.”
DoubleZero’s pitch is that a managed network with deterministic latency makes this distinction provable. The physics still apply: A trading desk in New York routing through DoubleZero to reach Hyperliquid in Tokyo will not run over a closer competitor in AWS’s ap-northeast-1 region.
But the gap is shrinking, and more importantly, the variance is shrinking. Traders get not just lower latency, but predictable latency, which is the feature high-frequency trading companies actually pay for in traditional markets.
Federa’s broader point is that crypto misunderstands what makes traditional markets fair. Regulators matter, but they are not the main driver. FINRA, the body that governs most of Wall Street’s day-to-day conduct, is technically a voluntary self-regulatory organization. The Securities and Exchange Commission and the Commodity Futures Trading Commission act as backstops with enforcement agencies, but the day-to-day work of keeping the markets fair is done by the exchanges themselves.
They do it because their business depends on it. Venues that gain a reputation for asymmetric access lose volume to venues that do not.
If he’s right, DeFi’s latency problem isn’t waiting for regulators. It’s waiting for the moment a major venue decides fairness is a competitive advantage worth paying for.
Crypto has spent a decade proving that you can build decentralized systems. The next decade will test whether someone will build distributed, where the advantage is not based on where in Tokyo your server sits.
“No one wants to trade on an unfair platform,” Federa said.
