First, I’m not super familiar with the software side of things to reduce hardware latency or mask it.
On the server-side of things, there are a few different things you can do. Rollback netcode (GGPO) can be used to diminish the visual effects of latency in the simulation. Here’s a video on how it works.
If you want to reduce network latency (server-to-client) to a minimum, Edgegap offers a solution that finds on the fly the best server location to connect multiple players together.