The Bandwidth Bottleneck Holding Blockchains Back | Mateo Ward & Austin Federa

This episode of 0xResearch explores 0ero, a purpose-built internet for distributed systems, revealing how it aims to shatter existing bandwidth limitations and unlock a new era of high-performance blockchains.

Guest Introductions

• The discussion features Austin Federa, co-founder of 0ero and President of the 0ero Foundation, previously with Solana Labs and the Solana Foundation. Austin brings a deep understanding of blockchain ecosystems and their scaling challenges.
• Also joining is Mateo Ward, co-founder of Malbec Labs, a core contributor to the 0ero protocol, specializing in protocol and network engineering. Mateo offers insights into the technical underpinnings of network infrastructure.

What is 0ero?

• Mateo Ward describes 0ero as an "alternate internet, a purpose-built internet for distributed systems." Unlike the general-purpose internet, 0ero is specifically engineered to deliver high performance for time-sensitive, globally distributed systems like blockchains.
• The core idea is to provide a dedicated, optimized network layer, akin to a "really fast highway for cars to drive on," ensuring efficient data transmission for demanding applications.

The Bandwidth Bottleneck: Why 0ero is Necessary

• The conversation highlights a critical shift: compute power is no longer the primary bottleneck for many blockchains; instead, bandwidth limitations—the capacity to transmit data—are holding back performance.
• Mateo Ward draws parallels with other tech industries like streaming (YouTube, Netflix) and cloud computing (AWS, Google Cloud), which all eventually built private, purpose-built networks to scale. He states, "basically the time has come where blockchain needs to do the same as every other tech industry."
• Austin Federa explains that the historical focus on compute was because it was an easier problem to address. He points out that validator clients (the software run by network validators) like Solana's Fire Dancer can already handle immense transaction volumes in controlled testnet environments. The challenge lies in maintaining this performance on the geographically dispersed, high-load mainnet.
• Strategic Implication: Investors and researchers should recognize that future blockchain scaling will increasingly depend on network infrastructure innovations, not just software or consensus optimizations.

Overcoming Global Communication Hurdles for Consensus

• A key challenge for blockchains is efficient communication between globally distributed validators (e.g., nodes in New York and Japan) to reach consensus.
• Austin Federa details how the public internet's routing is often inefficient for this, with traffic bouncing due to business models prioritizing "least cost routing" rather than performance. There's currently no way to pay for packet prioritization on the public internet.
• Mateo Ward explains that the internet routes traffic using numerous Autonomous System Numbers (ASNs)—essentially independent networks. 0ero, by contrast, operates as a single global ASN.
• ASN (Autonomous System Number): A unique number that identifies an autonomous system (AS)—a collection of IP networks and routers under the control of one entity (or administrative domain) that presents a common routing policy to the internet.
• "What the magic of what 0ero does is it routes the entire world on a single ASN number, which means that every single packet goes straight to the location that it's going to," says Mateo. This creates a fully peered mesh network, eliminating inter-carrier disputes and inefficient routing paths.
• Actionable Insight: Projects leveraging 0ero could see significantly reduced latency in global transaction propagation and consensus, potentially enabling faster block times and higher throughput.

The Crucial Role of Tokens in 0ero's Ecosystem

• Austin Federa emphasizes that a tokenized model is essential for 0ero. Tokens are used to incentivize every network provider along a data path—from New York to Singapore, for example—to offer the most efficient route.
• This incentive alignment ensures that providers are rewarded for contributing performant and useful links, particularly those offering significant advantages over the public internet and reaching a large number of validators or RPCs (Remote Procedure Call nodes, which allow applications to query blockchain data).
• Strategic Implication: The token model aims to create a self-optimizing network where economic incentives drive continuous performance improvements, a key factor for investors evaluating the long-term viability of infrastructure projects.

0ero's Stakeholders and Contributor Ecosystem

• Mateo Ward outlines the diverse range of contributors 0ero aims to attract:
• Phase 1 (Early Adopters): Entities familiar with blockchain and utility tokens, often with underutilized high-performance network capacity. Examples include Jump Crypto, Rockaway X, and Distributed Global.
• Phase 2 (Wait-and-See): Larger carriers and enterprises with existing private networks who observe initial success before committing.
• Phase 3 (Entrepreneurs & Capitalists): Individuals or groups who assemble the necessary resources (data centers, hardware, connectivity) to contribute to the 0ero network and earn tokens.
• Austin Federa notes this represents a "professionalization of the role of infrastructure in blockchain." While small firms can participate, it's not typically an endeavor for average home users due to the capital and operational expenditure required for mission-critical infrastructure.
• Researcher Note: The phased approach to onboarding contributors is a common strategy for DePIN projects, balancing early network bootstrapping with long-term scalability.

Tokenomics and Sustainable Network Growth

• Austin Federa addresses a common pitfall of DePIN (Decentralized Physical Infrastructure Networks)—often, they incentivize supply without sufficient demand, leading to token value decline.
• DePIN (Decentralized Physical Infrastructure Networks): Networks that use token incentives to bootstrap and operate physical infrastructure like wireless networks, storage, or compute.
• 0ero's design aims to counter this:
• No base rewards for merely providing fiber; rewards are tied to the usefulness of the fiber in connecting key network participants (validators, RPCs).
• The network will charge users (validators, RPCs) for its services, creating revenue inflows. A portion of this revenue (paid in native chain tokens or 0ero tokens) is converted to 0ero, with some burned and the rest distributed to contributors. This is a revenue-derived model, not purely inflationary.
• Austin stresses the importance of utility: "As long as [0ero is] useful... the monetization side of things... kind of solve themselves."
• Investor Insight: 0ero's focus on demand-side economics and revenue generation, rather than purely inflationary rewards, is a positive sign for long-term sustainability.

Fee Structure and Demonstrating Value

• Austin Federa discusses the proposed 5% take rate for 0ero, which would be phased in. He strongly advocates for "turning the fee switch on" early to validate Product-Market Fit (PMF).
• Product-Market Fit (PMF): The degree to which a product satisfies strong market demand.
• "Everything before the fee switch is just larping product market fit," Austin argues, emphasizing that true value is demonstrated when users are willing to pay.
• Mateo Ward adds that 0ero provides an efficient way to "extract bandwidth," and the fee is a nominal charge funneled back to network contributors, creating a shared, efficient economic model.
• Strategic Consideration: The willingness of major blockchains and RPC providers to pay for 0ero's services will be a key indicator of its PMF and long-term success.

Quantifying Performance Improvements with 0ero

• Mateo Ward anticipates "a significant improvement in aggregate performance" for blockchains using 0ero. This includes freeing up validator CPU, increasing transaction processing capacity, and reducing latency.
• The technical stack enabling this includes:
• Advanced low-latency switches and high-quality fiber routes.
• A filtration stack using FPGAs (Field-Programmable Gate Arrays), such as AMD V80 cards. These act as a "bump in the wire" to efficiently discard invalid or duplicate traffic before it reaches validators.
• FPGA (Field-Programmable Gate Array): An integrated circuit designed to be configured by a customer or a designer after manufacturing – hence "field-programmable." They offer high performance for specific, parallelizable tasks.
• Expected improvements:
• ~70% reduction in "garbage traffic" (unnecessary data) that validators must process.
• 30-200% latency reductions at an aggregate level.
• 0ero recently upgraded its testnet to IBRL (IP-Based Route Limiting) mode, which will provide more data on these improvements.
• Actionable Insight: Crypto AI researchers could explore how such significant reductions in network latency and validator load might enable more complex on-chain AI computations or faster oracle updates.

Filtering "Garbage Traffic" with FPGAs

• Austin Federa elaborates on the types of "garbage traffic" 0ero's FPGAs filter out:
• Signature Verification: Transactions with mismatched cryptographic signatures (which would never be validly included in a block) are discarded. This helps prevent economic denial-of-service attacks.
• Packet Deduplication: Multiple copies of the same packet, often sent to overwhelm validators, are removed.
• This filtration, performed at 100 gigabits per second on FPGAs, provides validators with a cleaner stream of potentially valid transactions, freeing up their resources.
• While FPGAs can filter and flag transactions (e.g., potentially high-value ones based on compute unit to fee ratios), they don't operate statefully like auction systems. Austin suggests that auction mechanisms like Jito would be built on top of 0ero, utilizing its efficient data delivery.
• Researcher Note: The FPGA-based filtration layer presents an interesting area for research into hardware-accelerated network security and transaction pre-processing for blockchains.

Capacity and Future Scalability

• Austin Federa states 0ero can process data at 100 gigabits per second, significantly higher than the typical 1-10 Gbps connections of most validators. For context, the largest DDoS attack Solana reportedly faced was 80 Gbps.
• Mateo Ward adds that the FPGA code, with significant development from Jump Crypto, is adaptable to other protocols and use cases. He anticipates that the technology will scale beyond 100 Gbps.
• Strategic Implication: 0ero's high capacity aims to future-proof networks against increasing transaction loads and potential network attacks, a critical factor for institutional adoption.

Expanding Support: Beyond Solana

• Austin Federa explains that Solana currently has the highest PMF for 0ero due to its high-capacity client, large validator set, and highly competitive transaction environment.
• However, 0ero's IBRL mode (which doesn't include the intensive filtration services) is designed for other globally distributed, high-performance networks that may not have the same level of competitive activity, such as Data Availability (DA) layers (e.g., Celestia) or storage protocols (e.g., Filecoin).
• "If we can nail the Salana use case, expanding out to other networks... is downhill from there," Austin remarks. The focus is on networks where there's a monetary premium for speed and efficiency.
• Investor Insight: While Solana is the initial focus, 0ero's architecture is designed for broader applicability, offering diversification potential as other L1s and L2s mature.

Multicast: A Game Changer for Data Propagation

• Austin Federa notes that many high-performance chains opt for smaller validator sets because of the "exponential data problems" in propagating information across many nodes.
• Mateo Ward introduces multicast as 0ero's solution. Multicast allows data to be sent once and efficiently distributed to multiple subscribed recipients. This is how stock exchanges propagate market data.
• Multicast: A communication method where a piece of information is sent from one or more points to a set of other points. Senders send data to a multicast group, and only members of that group receive it.
• Crucially, multicast requires a single ASN to function effectively, which 0ero provides. "It's revolutionary from a networking perspective in blockchain because as far as we know this has never been done before," Mateo states. 0ero is currently testing multicast with Jito for distributing Solana's "shreds" (data pieces of blocks).
• Actionable Insight: Multicast capabilities could dramatically improve the scalability of decentralized systems requiring broad and fast data dissemination, including oracles, state synchronization, and potentially distributed AI model updates.

Defining 0ero: DePIN or N1?

• The speakers discuss how to categorize 0ero.
• Austin Federa finds "DePIN" an imperfect fit. While most DePINs offer lower quality but wider reach (e.g., Helium), 0ero provides much higher quality than the public internet but doesn't aim for ubiquitous residential coverage.
• Mateo Ward proposes the term N1 (Network One or Layer One), signifying a base layer of network infrastructure operating at OSI layers 1-3 (physical, data link, network), with blockchains at layers 4-7. It's a single, high-quality product composed of many contributed parts.
• Researcher Note: The N1 categorization emphasizes 0ero's foundational role, distinct from application-layer DePINs. This distinction is important for understanding its position in the broader web3 infrastructure stack.

The Future Ecosystem: N2s on 0ero

• Mateo Ward envisions an ecosystem of N2s (Network Twos)—applications and services built on top of 0ero's foundational N1 layer.
• Potential N2s include:
• File storage solutions
• Coordination layers for AI model training and inference
• Precision time services
• Geo-awareness services
• These N2s could support advanced blockchain features like multiple concurrent leaders, which require precise timing and location data. 0ero aims to help identify opportunities and foster the development of this N2 ecosystem.
• Strategic Implication for AI Researchers: The N2 concept opens avenues for specialized AI infrastructure services built on a high-performance, decentralized network. This could include decentralized GPU marketplaces, federated learning frameworks, or verifiable compute networks benefiting from 0ero's low latency and high bandwidth.

Lessons Learned: A Retrospective

• When asked what they might have done differently:
• Austin Federa admitted to overestimating the immediate need for 0ero's advanced filtration services across all high-performance chains, as Solana's level of activity and competition was initially unique. This led to prioritizing the development of the more broadly applicable IBRL mode.
• Mateo Ward stated he would have aimed for a 100 Gbps backbone from the start, rather than beginning with 10 Gbps, as market demand and contributor capacity for 100 Gbps emerged faster than anticipated. "I'd be even more bullish on it," he reflected.

Looking Ahead: The Next 6-18 Months

• Austin Federa's Outlook:
• Hopes for 0ero to be on mainnet within six months.
• Within 18 months, 0ero should enable networks to significantly increase their available resources, fostering a "high-performance blockchain renaissance."
• He anticipates more specialization in blockchain development, with 0ero's high-performance network stack allowing for novel architectures, potentially even fully hardware-accelerated blockchains. "I think this industry's gotten a little bit complacent with performance and it needs a little bit of a kick in the ass."
• Mateo Ward's Outlook:
• Focus on network adoption and traffic growth.
• By Q3: Expects a significant number of validators and stake on the network, alongside a mainnet beta launch.
• By end of Q4: Aims to demonstrate substantial aggregate performance improvements, with data to be shared, potentially at events like Breakpoint.
• Learn More: Interested parties can visit 0ero.xyz to explore becoming a bandwidth contributor or participating in the testnet as a validator or RPC operator.

Conclusion

0ero's development signals a critical infrastructure shift, addressing the bandwidth bottleneck to unlock higher blockchain performance. For Crypto AI investors and researchers, 0ero presents opportunities for enhanced on-chain AI capabilities and specialized AI infrastructure (N2s) built upon its high-speed, low-latency foundation. Tracking its mainnet launch and adoption by major ecosystems is crucial.