Market Structure Research

The Latency Arbitrage Landscape.

How HFT firms leverage nanosecond advantages to tax retail and institutional flow. An analysis of the physics of racing.

Avg Arb Opportunity

$4.20

Global Daily Cost

$14M+

Speed of Light (Fiber)

~200km/ms

Winner Takes All

100%

The Race to Zero

In modern electronic markets, price discovery happens in a distributed manner. When the price of Bitcoin moves on Binance, it takes time for that information to propagate to Coinbase, Kraken, and decentralized exchanges on Solana or Ethereum.

This propagation delay creates a Latency Arbitrage opportunity.

Latency Arbitrage Simulator

INTERACTIVE

When the price changes on Exchange A (left), click BUY on Exchange B (right) before the HFT algo updates it.

Exchange A (Chicago)

$100.00

~700 mi

Exchange B (New York)

$100.00

Your Reaction

-- ms

HFT Latency: 8ms

KEY INSIGHT

The Winner-Take-All Dynamic: Even if you are only 1 microsecond slower than the fastest competitor, you get $0. There is no silver medal in arbitrage. This forces firms to invest millions in FPGAs, microwave towers, and now, colocation within TEEs to shave off nanoseconds.

The Physics of Speed

Why can't we just make things instant? The speed of light is finite.

Fiber Optic Cables: Light travels at ~2/3c in glass (~200km/ms).
Microwave Networks: Radio waves travel at ~c in air (~300km/ms).
Hollow Core Fiber: Emerging tech that nears light speed in vacuum.

Latency Profiles of Major Routes

Route	Distance	Fiber RTT (Best)	Theoretical Min (c)
NY (Secaucus) <-> Chicago (Aurora)	~1200km	13.8ms	8.2ms
London (LD4) <-> Frankfurt (FR2)	~600km	6.2ms	4.1ms
Tokyo (TY3) <-> Singapore (SG1)	~5000km	65.0ms	35.2ms
AWS (us-east-1) <-> Solana Mainnet	Variable	2ms - 150ms	<1ms (Internal)

Introducing the Jitter Tax

While pure latency (speed) is a solved physics problem, Jitter (variance) is a software problem.

When your signing infrastructure (MPC, Cloud HSM) adds variable delay—sometimes 50ms, sometimes 500ms—you are effectively paying a tax on every trade. We call this the Jitter Tax.

Jitter Tax Definition

The expected value loss of a trade due to the probability of adverse price movement during the execution latency window.

Why MPC is too Slow

Multi-Party Computation (MPC) requires multiple rounds of network communication to sign a transaction.

Round 1: Share commitments
Round 2: Partial signatures
Round 3: Aggregation

Each round trips over the internet. In a volatile market, by the time Round 3 completes, the price has moved. ZeroCopy removes these rounds entirely by colocating the key with the logic inside a TEE.

The Race to Zero

This propagation delay creates a Latency Arbitrage opportunity.

Latency Arbitrage Simulator

INTERACTIVE

When the price changes on Exchange A (left), click BUY on Exchange B (right) before the HFT algo updates it.

Exchange A (Chicago)

$100.00

~700 mi

Exchange B (New York)

$100.00

Your Reaction

-- ms

HFT Latency: 8ms

KEY INSIGHT

The Physics of Speed

Why can't we just make things instant? The speed of light is finite.

Fiber Optic Cables: Light travels at ~2/3c in glass (~200km/ms).

Microwave Networks: Radio waves travel at ~c in air (~300km/ms).

Hollow Core Fiber: Emerging tech that nears light speed in vacuum.

Latency Profiles of Major Routes

Route	Distance	Fiber RTT (Best)	Theoretical Min (c)
NY (Secaucus) <-> Chicago (Aurora)	~1200km	13.8ms	8.2ms
London (LD4) <-> Frankfurt (FR2)	~600km	6.2ms	4.1ms
Tokyo (TY3) <-> Singapore (SG1)	~5000km	65.0ms	35.2ms
AWS (us-east-1) <-> Solana Mainnet	Variable	2ms - 150ms	<1ms (Internal)

Introducing the Jitter Tax

While pure latency (speed) is a solved physics problem, Jitter (variance) is a software problem.

When your signing infrastructure (MPC, Cloud HSM) adds variable delay—sometimes 50ms, sometimes 500ms—you are effectively paying a tax on every trade. We call this the Jitter Tax.

Jitter Tax Definition

The expected value loss of a trade due to the probability of adverse price movement during the execution latency window.

Why MPC is too Slow

Multi-Party Computation (MPC) requires multiple rounds of network communication to sign a transaction.

Round 1: Share commitments

Round 2: Partial signatures

Round 3: Aggregation

Each round trips over the internet. In a volatile market, by the time Round 3 completes, the price has moved. ZeroCopy removes these rounds entirely by colocating the key with the logic inside a TEE.