A successful P2P live streaming system must achieve high uploading bandwidth utilization, fast stream distribution, fair aggregate bandwidth distribution among participating nodes, flexibility and adaptation to the underlying network conditions and peer behaviors. This paper proposes a novel architecture that manages to meet these requirements. Using distributed optimization algorithms we propose a dynamically reconfigurable overlay architecture that organizes its peers according to network locality information and heterogeneous uploading capabilities of them. The benefits of our optimized overlay are fully exploited by our proposed scheduler, which guarantees the fair and fast distribution of the stream. The evaluation of our system under a series of scenarios that take into account the all requirements above reveals the necessity of our proposed system. Keywords - p2p live streaming, distributed optimization