thiagorudiger on equalized cable latency
- Engineer Thiago Rudiger argued crypto exchanges could narrow spreads by copying stock and futures venues that equalize physical cable lengths for colocated traders. - CME Group says its Globex links use equidistant cross-connects; CME tests each fiber path and allows only set length plus 12 inches. - Nasdaq’s own colocation design is under scrutiny over unequal links, underscoring how nanoseconds can shape market fairness. (sec.gov)
In ultra-fast trading, even a longer cable can act like a speed bump. Thiago Rudiger said crypto venues could tighten spreads by equalizing cable lengths for firms sitting in the same data center. (sec.gov) (cmegroup.com) The basic idea is simple: if one market maker hears price changes a few nanoseconds earlier, slower firms protect themselves by quoting wider bid-ask spreads. Rudiger tied that physical edge to the prices everyone else sees on screen. (sec.gov) (quantmedia.io) Traditional exchanges already build around that problem. CME Group says connectivity to its Globex platform uses an equidistant cross-connect to ensure “location neutrality” inside its Aurora, Illinois colocation facility. (cmegroup.com) CME’s published connectivity policy gets more specific: every fiber path is kept to a set length plus as much as 12 extra inches, and CME tests optical latency on each link. Customers are barred from altering the physical characteristics of those cross-connects. (cmegroup.com) Cboe uses a similar design in Secaucus, New Jersey. Its latency-equalization document says customer cages in NY4, NY5 and NY6 receive equal optical fiber lengths, with extra slack stored on Cboe’s side. (cdn.cboe.com) Nasdaq markets its Carteret, New Jersey colocation site on speed, saying customers can cut round-trip latency by two to five microseconds with Ultra connectivity and see sub-50 microsecond order-to-ack and order-to-tick latency. (nasdaqtrader.com) But Nasdaq’s internal cable geometry has also become a regulatory issue. In a July 24, 2024 comment letter to the Securities and Exchange Commission, McKay Brothers said Nasdaq should equalize all connections inside NY11 before expanding NY11-4. (sec.gov) McKay said unequal links create “unfair discrimination” and stronger burdens on competition, and said equal access to low-latency market data helps subscribers “make tighter markets.” That is close to the point Rudiger was making for crypto. (sec.gov) The second half of Rudiger’s argument sits above the cable layer. Once physical paths are normalized, firms still race on software and network design, including kernel-bypass techniques that cut operating-system overhead between the network card and the trading engine. (github.com) (aws.amazon.com) Crypto exchanges have started talking more openly about that stack. Amazon Web Services wrote in 2025 that digital-asset venues can offer connectivity patterns ranging from roughly 50 to 200 microseconds to more than a millisecond, depending on design. (aws.amazon.com) Rudiger’s point is that if crypto wants market-making economics closer to mature futures and equities venues, it may need to copy their plumbing too. In markets measured in microseconds and nanoseconds, fairness can start with the length of a fiber spool. (cmegroup.com) (cdn.cboe.com)
