Phala, a Polkadot parachain, is on track to transition into an Ethereum layer 2, following a community vote endorsing a new proposal aimed at enhancing computation services for enterprise clients.
“Proposal Passed: Phala is Migrating to Ethereum L2!” a Phala X post from Wednesday states, highlighting this milestone as a pivotal moment for the project in its quest for “greater scalability and enterprise-grade security.”
The announcement notes that Phala (PHA) tokenholders will be granted the new ERC-20 variant on a 1:1 basis, with the “migration” scheduled to commence before Nov. 20, ensuring that “staking, rewards, and governance” proceed without interruption on the new layer 2 (L2).
This change isn’t sudden, as Phala has already launched a “live and functional” Ethereum L2 in January. As detailed in the proposal, the initiative seeks to fully migrate and concentrate its efforts on Ethereum for maximized potential gains.
Phala functions as a decentralized cloud computing network designed to deliver private, secure, and scalable computation for AI-integrated Web3 applications. It was among the first to secure a parachain slot during Polkadot’s auctions in late 2021.
The proposal was first submitted on Sept. 27, by Phala Network’s ecosystem success lead, “doylegxd,” who advocated for this shift to streamline staking, governance, and confidential computing within a more robust Ethereum Virtual Machine-compatible ecosystem.
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The proposal also asserted that renewing the parachain slot on Polkadot would confine the project to “infrastructure with limited scalability,” necessitating substantial resources to maintain. Transitioning to Ethereum would facilitate access to advanced computation technologies.
“L2 provides reduced operational overhead and seamless integration with Ethereum liquidity and tooling. It is the ideal environment for deploying TDX and GPU-based confidential computing tasks, with early-stage commercial traction already evident,” the proposal states.
Why migrate from Polkadot?
Phala stands out as one of the few projects opting to fully transition from Polkadot to Ethereum.
In contrast, other projects like Astar and the KILT Protocol have expanded their integration with Ethereum using a multichain strategy without abandoning Polkadot.
Phala’s proposal indicates that the migration is aimed at leveraging specific technology crucial for its further growth.
The PHALA token ranks as the 11th largest AI-agent-related crypto-asset by market capitalization at $80.6 million and is among the top 50 AI tokens, according to CoinGecko data.
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