DoubleZero and the 2Z Token

In its recently issued no-action letter, the SEC stated that there would be no enforcement action against the launch of the 2Z token by DoubleZero. Michael Seaman, Chief Counsel of the SEC’s Division of Corporate Finance, confirmed that the token does not require securities registration.

DoubleZero’s model enables blockchain-based access to underutilized fiber connections managed by network participants. Contributors who help operate and expand this infrastructure are rewarded with 2Z tokens. Co-founder Austin Federa emphasized that the decision demonstrates how regulatory clarity can be achieved through collaboration, not just for DoubleZero but for entrepreneurs across the U.S. Meanwhile, the project’s legal advisor Mari Tomunen argued that the token’s value derives from participants’ efforts, showing that the Howey test does not apply in this case.

SEC’s Message on Regulatory Boundaries

SEC Commissioner Hester Peirce highlighted that DePIN projects represent a distinct economic reality, separate from the capital-raising activities Congress tasked the Commission to oversee. “The SEC was not created to regulate all economic activity,” she noted, underlining the agency’s limits. According to Peirce, DePIN tokens are not investment instruments but functional incentives aimed at promoting infrastructure growth. Classifying them as securities, she warned, would stifle innovation in the sector.

Softer Regulatory Approach and Market Response

In line with the Trump administration’s broader goal of attracting blockchain development to the U.S., the SEC appears to be adopting a more flexible stance toward crypto. The ruling creates a more predictable environment for both startups and investors seeking regulatory clarity.

Despite the significance of the decision, the immediate market reaction was muted. Tokens within the DePIN category saw no major surge, with some recording modest declines in the last 24 hours.

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While existing blockchains have made significant advancements in consensus and execution, they still rely heavily on centralized internet infrastructure, leading to high latency, network congestion, and spam transactions. DoubleZero eliminates this bottleneck with its “N1 Network Layer” approach, building a dedicated communication network for distributed systems. 

Team and Founders

DoubleZero Foundation is a non-membership foundation based in the Cayman Islands.
Board Members: Austin Federa (Chair), Andrew McConnell (Co-Founder & Malbec Labs Founder) 

Core Contributors 

• Malbec Labs → Software development and network engineering, early technology partner of DoubleZero. 
• Jump Crypto → Software development, hardware support, and network bandwidth contributions. 
• Anza and Jito Labs → Network engineering and protocol development. 

Contributors expand the ecosystem by connecting fiber lines, installing DoubleZero Devices (DZD), and providing multicast and edge filtration services. 

Investors and Partnerships 

• Contributors: Jump Crypto, Malbec Labs, Jito Labs, Anza 
• Ecosystem: Solana-compatible infrastructure, SPL token standard, RPC & MEV infrastructure providers 
• Wallet Compatibility: All Solana-based SPL-compatible wallets 

DoubleZero Foundation raised $28 million in a funding round led by Multicoin Capital and Dragonfly Capital. Other notable investors include Foundation Capital, Reciprocal Ventures, and Borderless Capital. 

Project Idea and Purpose

DoubleZero aims to transform connectivity from a bottleneck into a competitive advantage in distributed systems. 

Objectives: 

• Solve latency and jitter issues in blockchain communication 
• Eliminate dependency on public internet 
• Monetize unused fiber infrastructure with token incentives 
• Filter spam and duplicate transactions at edge devices 
• Provide dedicated, high-performance communication channels for validators and user systems 

How the Project Works

• DoubleZero operates with a two-ring network architecture: 
• Outer Ring (Moat): Filters spam and duplicate transactions at edge devices. 
• Inner Ring (Castle): Dedicated fiber network for valid transactions only. 

Operation Principle: 

• Unused fiber lines are contributed to the DoubleZero network. 
• Contributors allocate bandwidth to the network via smart contracts. 
• Contributors are rewarded with 2Z tokens. 
• Users, validators, and protocols access the network for low-latency, optimized services. 

Governance

• Network governance is community-driven with participation from 2Z token holders. 
• Governance topics: feature additions, economic parameters, contributor incentives 
• Decisions are made using Web3-compatible tools for community-centered management 

Roadmap 

• 2021 Q4: Project start, initial test infrastructure 
• 2023 Q2: Alpha test, whitepaper, and website launch 
• 2023 Q3: Beta test, Priority Pass NFT 
• 2023 Q4: Chaos Legacy tests, economic model experiments 
• 2024: IDO/IEO, Solana integration, mobile & desktop app tests 
• 2025 Oct: Mainnet launch, 2Z token distribution, staking integration 

Token Use Cases (2Z) 

• Resource Access: Pay 2Z to use network services 
• Payment to Providers: Fiber and hardware contributors receive 2Z rewards 
• Security Incentives: Computation and security contributors are rewarded 
• Staking & Delegation: Contributors stake for network security; delegators assign tokens to providers 

Token Details 

• Name: DoubleZero (2Z) 
• Blockchain: Solana (SPL standard) 
• Total Supply: 10 Billion 2Z 
• Max Supply: 10 Billion 2Z 
• Circulating Supply: 630 Million 2Z 

Distribution 

• DoubleZero Foundation & Ecosystem: 29% (Unlocked) 
• Jump Crypto: 28% (5% unlocked; rest standard vesting) 
• Malbec Labs: 14% (Standard vesting) 
• Team: 10% (Standard vesting) 
• Institutions: 12% (Standard vesting) 
• Contributors: 4% (Standard vesting) 
• Builders: 2% (Standard vesting) 
• Validators: 1% (0.7% unlocked at launch; rest unlocks 1 year later) 

Ecosystem 

• Contributors: Independent fiber providers, validators, hardware contributors 
• IP Expansion: Gaming, machine learning, CDN, other low-latency applications 
• Community: Active participation via governance and staking 
• Infrastructure Compatibility: Solana, RPC providers, MEV infrastructure 

Key Features 

• Dedicated N1 layer for blockchain & distributed systems
• Ultra-low latency and jitter
• Edge filtration prevents spam/duplicate transactions
• Token-incentivized bandwidth contributions
• Dramatic validator performance improvements
• Sustainable and fair economic model
• Applicable beyond blockchain (ML, gaming, CDN)

Official Links 

• Website
• Twitter
• Youtube

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