This episode delves into DoubleZero's ambitious plan to build dedicated fiber infrastructure for Solana, exploring the critical link between physical network speed, validator economics, and the competitive future of high-throughput blockchains.
DoubleZero (D0ero) Project Update
- Austin Federa, co-founder of DoubleZero, provides an update on their physical fiber infrastructure project designed to enhance blockchain performance, starting with Solana.
- The network is built via contributions from multiple independent entities. Currently, six contributors are involved in providing physical fiber links.
- A testnet launched in mid-February connects around 30 validators (mostly Solana mainnet validators) running on the DoubleZero network to test the technology platform while the mainnet infrastructure is built out.
- DoubleZero recently conducted a unique validator-only token sale on CoinList. Validators had to prove ownership by signing with their
validator pub key (a unique cryptographic identifier for their validator node) to participate.
- Austin emphasizes the sale's goal: "The goal of any type of community sale is to align your most loyal and important participants. And for us, that's the validator network." This mirrors Solana's early, accidental validator token sale which fostered long-term alignment.
- The chosen ticker is
2Z, a deliberate choice for distinctiveness and psychological impact.
- The
2Z token functions as a true utility token for paying network transit fees. Validators and RPCs (Remote Procedure Calls) – nodes that handle user requests to interact with the blockchain – pay fees in 2Z, which then rewards the bandwidth contributors. There is no user-deployable smart contract layer.
Fiber Network Contributors and Infrastructure
- The project is attracting a diverse set of fiber contributors, exceeding initial expectations.
- Contributors include venture capital firms (Distributed Global, Rockway X), trading firms (Galaxy - also involved earlier), and bare metal providers (Terra switch, Latitude). Austin notes VCs typically avoid operations-heavy projects, and bare metal providers needed assurance DoubleZero wasn't competitive but complementary.
- Initially, the network utilizes existing
lit fiber – fiber optic cables already carrying data traffic, often leased by firms like trading companies. Contributors carve out portions of their existing leased capacity for DoubleZero.
- Future expansion might involve
dark fiber – unused fiber optic cables that require significant investment (potentially $2M+ in optical equipment) to "light up." Running proprietary fiber is a distant possibility.
- DoubleZero is targeting a Q3 launch for its mainnet, which will include token functionality, multiple independent contributors, and permissionless validator sign-ups.
Validator Economics and Network Adoption
- DoubleZero proposes a fee structure tied to validator earnings, starting low and potentially ramping up to 5%, justified by the expected performance gains.
- Austin argues that improved network performance (e.g., double the blockspace) should yield value exceeding the fee for both validators and stakers. He critiques the "unit economics" focus of some validators, stating, "The fundamental driver of is your validator profitable or unprofitable... It's the price of soul."
- Even individual validators benefit from Day 1 by joining DoubleZero due to an integrated
FPGA (Field-Programmable Gate Array) filtration layer. This hardware filters out invalid transactions before they hit the validator's software, allowing validators to build more profitable blocks by having more time to select valuable transactions.
- Network adoption faces a collective action problem, but Austin believes stakers may prioritize validators contributing to network speed. Furthermore, MEV opportunities, particularly via platforms like Jito, are expected to be more profitable on DoubleZero due to deterministic networking, incentivizing validator participation.
- The Solana core development team, Anza, plans to double
CUs (Compute Units) – a measure of computational work per block – by end of 2025. This increase will pressure validators on slower connections, making solutions like DoubleZero more attractive alternatives to relocating geographically.
Understanding Blockchain Latency and Speed Metrics
- Austin challenges simplistic interpretations of blockchain speed metrics like block times, arguing they often misrepresent true system latency.
- Metrics like a 10ms block time often refer only to the processing time within a
sequencer (a node that orders transactions) or validator, ignoring the crucial network transit time for data to arrive and for updates to propagate globally. Austin notes 10ms is "abysmal" by TradFi standards for internal processing.
- Single-sequencer architectures (like Base or potentially Mega ETH) offer low latency only for users physically close to the sequencer, resembling centralized exchanges rather than globally accessible networks. Light speed limitations over fiber mean users far from the sequencer experience much higher effective latency.
- True system latency involves the time for a transaction to reach a validator/sequencer and for the resulting state change to be observed globally across the network's RPCs. Solana's pre-confirmations (shreds) offer faster feedback loops than final block confirmation.
- There isn't a single perfect metric, but evaluating how quickly the global ledger state updates provides a more useful measure of functional speed for a decentralized network.
The Future of Solana: Firedancer, DoubleZero, and Competition
- The combination of software improvements like
Firedancer (a new, high-performance Solana validator client) and infrastructure like DoubleZero could significantly boost Solana's throughput.
- Austin references a Firedancer demo achieving 1 million TPS on six nodes across four continents, running on the DoubleZero network – a feat reportedly impossible on the public internet.
- He describes a cyclical push-and-pull between hardware and software capabilities: software improvements hit network limits, driving infrastructure upgrades (like DoubleZero), which then reveal new software bottlenecks, continuing the scaling cycle. Success for DoubleZero V1 means it eventually becomes the bottleneck, prompting further innovation.
- Austin warns that if Solana fails to implement features like multiple concurrent leaders by ~2027, specialized, regionally-focused chains like
Hyperliquid (an order book DEX built on its own chain, initially focused geographically) could siphon off significant activity and mindshare, similar to how L2s impacted Ethereum's dominance, even if they don't surpass Solana's market cap.
- DoubleZero remains neutral, aiming to provide infrastructure for any chain (L1s like Aptos/Sui, L2s) needing its capabilities, though Solana currently presents the strongest product-market fit.
SVM (Solana Virtual Machine) refers to Solana's execution environment, now being adopted by other chains.
The Role of Ideals vs. Pragmatism in Crypto
- The conversation explores the tension between crypto's decentralization ideals and user behavior driven by performance and profit.
- Hyperliquid's success, despite being less decentralized than Solana but more decentralized than Binance, suggests users prioritize performance and a degree of decentralization over maximal decentralization if the user experience is superior. Austin frames this pragmatically: "Hyperliquid is a hell of a lot more decentralized than Binance."
- Bitcoin's evolution from anti-establishment "bunker coin" to an asset class embraced by TradFi (ETFs, corporate treasuries) is presented not as a failure of ideals, but as a sign of success in changing the mainstream financial system's perception of value. Successful change inherently involves becoming part of the system.
TradFi Adoption and the Future of Crypto Trading
- Austin offers a nuanced view on TradFi integrating with crypto rails.
- He believes crypto rails are unlikely to replace existing TradFi systems for established assets, as the speed and R&D advantages in traditional markets (like HFT connectivity) are immense and deeply entrenched. "It's very hard to be fast and be wrong," Austin notes regarding TradFi HFT.
- However, TradFi firms are increasingly focusing on crypto because it offers new asset classes and different types of profit opportunities stemming from market inefficiencies, global distribution, and network immaturity. Austin states, "There's just not a lot of margin to be squeezed out in the traditional space anymore."
This discussion highlights that specialized infrastructure like DoubleZero is becoming vital for unlocking the next level of blockchain performance. Investors and researchers must monitor these infrastructure plays, as network speed directly influences validator economics, MEV capture, and a protocol's overall competitiveness in the evolving high-throughput landscape.
