Our goal is straightforward but ambitious: a purpose-built internet for blockchains by tokenizing underutilized private fiber. Now, with SEC no-action relief in hand, we feel confident that the 2Z token is not a security, and that programmatic 2Z token rewards are not securities transactions. This underscores that there is a path to launch a token in the U.S. When the value of the token comes from other network participants’ actual work, Howey does not apply.
This underscores that there is a path to launch a token in the U.S. As Commissioner Hester Peirce explains in her write-up about the DoubleZero No-Action Letter,
“[DePIN] projects allocate tokens as compensation for work performed or services rendered, rather than as investments…. DePIN networks programmatically distribute such tokens to users who participate in the network in accordance with network rules. Accordingly, the Howey Test is not satisfied.”1
That principle has always guided 2Z. It is marketed for what it is: a token to pay for network connectivity. It’s not an investment product, and it’s never been pitched as one. Could 2Z be wrapped inside a derivative or another investment instrument, like gold can? Of course. Could marketplaces emerge to buy it, like oil? Sure. But as we explain in the Incoming Letter, the potential development of a secondary market, or emergence of speculators, does not change the legal analysis for how 2Z works in the DoubleZero network, and it “does not render 2Z a security.” Utility over speculation.
Programmatic Transfers
DoubleZero is a mesh network of underutilized high-performance fiber links. Users—such as blockchain nodes—can route traffic through the network instead of the public internet, gaining significant performance advantages and, for validators, potentially higher rewards.
The 2Z token serves as the network’s native “currency” in two ways:
- Network Provider Payments – 2Z collected from users is distributed automatically via smart contracts to Network Providers whose connectivity outperforms the public internet. Providers whose links perform no better than the public internet earn zero 2Z.
- Staking (Computation Payments) – Newly minted 2Z is awarded to those who manage the DoubleZero ledger (i.e., Resource Providers who calculate Network Provider reward amounts and verify their link performance), as well as to Delegators who stake to Resource Providers. Any 2Z holder can delegate and share in these newly minted 2Z rewards.
Importantly, no central entity tweaks payouts—both flows are determined algorithmically using the “Shapley” value algorithm², which measures each provider’s marginal contribution to the network.
Project Crypto In-Action
Since the start of the new administration, the SEC has engaged in productive dialogue with hundreds of crypto projects. For DoubleZero, the key fact is that neither Network Providers nor Resource Providers are passive investors—they control their own outcomes. They install cables, configure hardware, run computations, and maintain service levels. Their rewards are tied directly to their measurable contributions, not to the entrepreneurial efforts of a promoter.
DoubleZero Foundation’s role—supporting development, decentralization, security and adoption—is ministerial and technical, and does not impact the payouts. Even when the Foundation makes grants, interfaces with policymakers, or assists with network onboarding, these activities are ancillary to the actual operation of the network.
As the fancy part of our Incoming Letter provides: sine qua non ("without which, not"). Participants don’t have to rely on the Foundation to run the network. The Network Providers and Resource Providers do that themselves.
We are grateful to the SEC Crypto Task Force and the Division of Corporation Finance for their collaborative approach and for the opportunity to work together on novel questions in our industry. Building the road as we travel it.
What’s Next
We’re gearing up for mainnet-beta launch later this week. Compared to the DoubleZero testnet, mainnet-beta means more performant links and a fully functional 2Z token. The timing for the No-Action letter couldn’t be better: this relief removes a major regulatory uncertainty, opening the door for new Network Providers, including regulated telecom operators, to join, create jobs, upgrade infrastructure, and scale without hesitation.
DoubleZero upgrades crypto’s physical base layer. Some call it DePIN, we call it: Pedal to the metal.
Endnotes
1 Deep In: Statement on DoubleZero No-Action Letter, Commissioner Hester M. Peirce, Sept. 29, 2025. Available at https://www.sec.gov/newsroom/speeches-statements/peirce-092925-deep-statement-doublezero-no-action-letter.
² Shapley values come from the field of cooperative game theory, and in part earned their creator Lloyd Shapley the Nobel Prize in Economics in 2012. The algorithm is publicly visible and verifiable.