What Is Co-location on Solana?

Co-location on Solana is the practice of running a trading strategy on the same physical machine as a Solana validator, giving that strategy access to transactions at the moment of execution, before those transactions are confirmed by the wider network. In traditional markets, co-location means housing a server beside an exchange's matching engine. On Solana, the strategy and the block producer share the same hardware. The validator producing each block is the venue.

Where the Term Comes From

In traditional financial markets, co-location is well understood. Exchanges including NYSE, NASDAQ, and CME have offered co-location services for decades, allowing trading firms to house their servers in the same data centre as the exchange's matching engine. The purpose is latency reduction: every millisecond of distance between a strategy and the venue is a competitive disadvantage. Between 2007 and 2012, co-location reshaped the equities market structure. Firms that could afford proximity gained a durable structural edge over those that could not.

Robin Nordnes, Raiku's Founder and CEO, applied this logic to Solana. On a distributed validator network, the exchange building analogy does not hold directly. The principle does: the firm closest to where execution happens has a structural advantage. On Solana, that means being on the same machine as the validator producing the block.

Raiku introduced co-location as an infrastructure category on Solana through Blackline, its execution product for institutional trading firms. The concept is borrowed from traditional market structure and rebuilt for how Solana actually works.

How Execution Normally Works on Solana

Solana processes transactions using a rotating schedule of validators. Each validator takes turns as the leader, the node responsible for producing a block. During its leader slot, the validator collects incoming transactions, executes them, and assembles a block.

For a trading strategy running anywhere else on the network, execution is mediated by this process. The strategy submits a transaction, the validator receives it, and it competes for inclusion alongside everything else arriving at the same time. Speed depends on network propagation, fee levels, and timing. There is no structural guarantee.

Position is the deeper problem, not speed. A strategy running outside the validator does not see transactions until they are already competing for space in a block. The validator sees them first. Co-location addresses that gap directly.

What Co-location Changes

Co-location removes the propagation gap. When a trading strategy runs on the same machine as the validator, it accesses transactions as the validator executes them, not after they have travelled across the network. The validator sees each transaction as it executes, the strategy acts and the eligible orders land in blocks the validator produces.

In equities markets, this structural advantage came from physical proximity to the matching engine. On Solana, it comes from sharing a machine with the validator. The principle is the same: being close to where execution happens is itself an edge, independent of fee levels or timing.

For eligible orders, the result is guaranteed inclusion in blocks Raiku produces. Inclusion is determined by where the strategy sits, not by what others are paying when the block forms.

Co-location vs Other Execution Approaches

vs Priority Fees

Priority fees increase the probability of inclusion by making a transaction more attractive to validators. They do not change where the strategy sits relative to the validator. When every participant raises their fee, the advantage disappears. Co-location produces a structural position that does not depend on what others pay.

vs Bundle Infrastructure

Bundle infrastructure allows searchers to submit groups of transactions that must execute atomically. Bundles compete for inclusion through an auction. Co-location is an architectural arrangement that operates before the block assembly process begins, upstream of any auction.

vs Private Mempools and RPC Endpoints

Private mempools protect transactions from being observed before they land. Specialised RPC endpoints reduce propagation time. Both reduce exposure and improve speed, but neither places the strategy at the validator. Co-location removes the propagation gap altogether rather than narrowing it.

How Raiku Delivers Co-location

Raiku delivers co-location through Blackline. Blackline runs a firm's trading strategy on the same machine as a Raiku validator. The validator sees each transaction as it executes. The strategy acts. Eligible orders land in blocks Raiku produces with guaranteed inclusion.

Raiku does not provide trading strategies. The strategy belongs to the firm. The Engineering Contract, the formal commitment governing Blackline access, defines what can run through it. Pending-flow strategies are not permitted. Blackline acts only on transactions that have already executed.

Access is governed by the Engineering Contract, a mutual commitment between Raiku and each client. Raiku caps the number of clients because the execution capacity that makes co-location meaningful is finite. Each additional client is a claim on the same pool. Taking on more clients than the capacity can support would make the commitment hollow.

Raiku's own trading desk was the first to operate through this infrastructure. We built it to trial ourselves before offering access to others.