Polkadot parachain Phala is set to become Ethereum’s Layer 2 after the community voted in favor of a recent proposal aimed at increasing its computing offerings to enterprise customers.
“Proposal accepted: Phala migrates to Ethereum L2!” Wednesday’s Phala
The post added that Phala (PHA) token holders will receive the novel ERC-20 variant at a 1:1 ratio, “migration” will begin before November 20, and “staking, rewards and governance” will continue seamlessly on the novel Layer 2 (L2).
This is not a sudden move on Phala’s part as Phala already has a “live and functional” version of Ethereum L2 that launched in January. As the proposal explains, the project aims to fully migrate and focus exclusively on Ethereum to maximize potential benefits.
Phala is a decentralized cloud computing network that is designed to provide private, secure and scalable computing for Web3 applications integrated with artificial intelligence. This was one of the first projects to secure a parachain slot as part of the Polkadot auction in tardy 2021.
In the beginning there was a proposal sophisticated On September 27, he and Phala Network Ecosystem Success Leader “doylegxd” recommended a move to consolidate staking, governance, and confidential computing into a “stronger” ecosystem tailored to the Ethereum Virtual Machine.
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The proposal also argued that renewing the parachain slot on Polkadot would lock the project into a “limited scalability infrastructure” that would require significant resources to maintain. Working on Ethereum would also enable him to leverage next-generation computing technology.
“L2 offers lower operating costs and direct integration with Ethereum liquidity and tools. It is also a natural place to deploy TDX and GPU-based confidential compute workloads, where we are already seeing early commercial traction,” the proposal reads.
Why migrate from Polkadot?
Phala seems to be one of the few that have decided to completely switch from Polkadot to Ethereum.
Other projects such as Astar and the KILT protocol, he decided expand its integration with Ethereum in a multi-chain approach rather than abandoning Polkadot.
Phali’s proposal suggests the move was aimed at tapping into the very niche technologies it needs to spur further growth.
According to estimates, the PHALA token is the 11th largest AI agent-related cryptocurrency by market capitalization at $80.6 million and is among the top 50 AI tokens by market capitalization. data from CoinGecko.
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