Polkadot parachain Phala is poised to transition to an Ethereum layer 2, following community approval of a proposal aimed at enhancing computational capabilities for enterprise clients.
“Proposal Passed: Phala is Migrating to Ethereum L2!” a post from Phala X on Wednesday announces, noting that this marks a new phase for the project as it seeks “greater scalability and enterprise-grade security.”
The post informs that Phala (PHA) token holders will be given the new ERC-20 variant at a 1:1 ratio, the “migration” is set to commence before Nov. 20, and that “staking, rewards, and governance” will proceed seamlessly on the new layer 2 (L2).
This transition is not sudden for Phala, as it has already established a “live and functional” Ethereum L2 since January. The proposal clarifies that the project aims to fully migrate and concentrate solely on Ethereum to maximize potential benefits.
Phala operates a decentralized cloud computing network designed to facilitate private, secure, and scalable computation for AI-driven Web3 applications. It was among the initial projects to secure a parachain slot during the auctions conducted by Polkadot in late 2021.
The proposal was first submitted on Sept. 27, with Phala Network’s ecosystem success leader “doylegxd” advocating for this transition to unify staking, governance, and confidential computing within a “stronger” Ethereum Virtual Machine-aligned ecosystem.
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The proposal also contended that renewing the parachain slot on Polkadot would confine the project to “infrastructure with limited scalability” requiring substantial resources for upkeep. Operating within Ethereum would also allow access to next-gen computational technologies.
“L2 provides lower operational overhead and seamless integration with Ethereum liquidity and tools. It is also the optimal environment for deploying TDX and GPU-based confidential computing workloads, where we are already witnessing early-stage commercial interest,” the proposal elaborates.
Why migrate from Polkadot?
Phala stands out as one of the rare projects opting to fully transition from Polkadot to Ethereum.
Contrastingly, other projects like Astar and the KILT Protocol have chosen to broaden their Ethereum integration in a multichain framework rather than leaving Polkadot behind.
Phala’s proposal implies that this shift is intended to leverage specialized technologies essential for facilitating further growth.
The PHALA token ranks as the 11th largest AI-related cryptocurrency by market capitalization at $80.6 million and is among the top 50 largest AI tokens by market cap, according to data from CoinGecko.
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