This proposal has also been published as a on-chain referendum, please come and vote for it:
Vote here, Referenda 128
TL;DR
We propose retiring the Khala chain by January 10, 2025, as Intel will discontinue SGX-IAS support in April 2025, making Khala workers obsolete. All Khala assets will be migrated to Ethereum, which supports Intel’s TDX and Nvidia’s Confidential Compute GPUs. This transition will simplify the ecosystem, reduce redundancy, and future-proof the Phala Network with cutting-edge technology, positioning it as a leader in privacy-preserving decentralized cloud computing.
Community approval is critical to executing this upgrade and ensuring Phala’s long-term growth and success.
Background and Motivation
As Phala Network evolves toward Phala 2.0, adapting to technological advancements and market demands is crucial for long-term growth and sustainability. This proposal addresses the need to align with cutting-edge technologies while streamlining operations. Key motivations include:
1. Technological Shifts:
- Intel IAS deprecation: Intel will sunset SGX-IAS support in April 2025, leaving Khala workers unsupported. Meanwhile, the more advanced DCAP-based remote attestation, already operational on Phala, will continue to be supported.
- Adopting next-gen tech: By consolidating on Ethereum, Phala can leverage advanced technologies like Intel TDX and Nvidia GPUs (H100, H200), enabling high-performance, privacy-preserving computations. These advancements are unavailable on Khala.
- Efficiency gains: Maintaining two parachains (Khala and Phala) introduces inefficiencies. Retiring Khala will focus resources on a scalable, unified ecosystem, while transitioning to modernized tech standards.
2. Product-Market Fit:
- The demand for TEE infrastructure is growing, driven by use cases in gaming, AI, off-chain trading, and privacy-preserving computations (MPC, FHE, ZK).
- Phala’s support for SGX-DCAP, TDX, and Nvidia GPUs uniquely positions it to meet these demands.
3. Strengthened Ecosystem Collaboration:
- Deploying an L2 on Ethereum strengthens our ties to its ecosystem, opening doors to deeper collaboration.
- Future tokenomics adjustments will incentivize Intel TDX and GPU integration, while an Ethereum Vault contract will set the foundation for upcoming economic upgrades.
4. Exploring TEE Marketplace:
- Launching a TEE marketplace on Ethereum will allow the community to lease TDX cloud services.
- In the short term, the Phala team will provide TDX servers and credits to validate ecosystem functionality and community satisfaction.
Proposal Details
To address these challenges and align with the demands of Phala 2.0, the following actions are proposed:
1. Sunset Khala Chain:
- Retire the Khala chain by January 10, 2025, coinciding with the expiration of its Kusama parachain slot.
- Ensure a smooth transition before Intel discontinues SGX-IAS support in April 2025, minimizing operational risks.
2. Deployment on Ethereum:
- Launch an L2 network on Ethereum to enhance interoperability and expand use cases.
- Deploy a Vault contract on Ethereum to manage staked assets and staking rewards.
- Ethereum Vault APR will be synchronized with Phala’s average APR via the Budget Balancer.
3. Introducing TEE Marketplace:
- Launch a TEE marketplace on Ethereum for TDX cloud services.
- Users can cover TDX rental costs by converting staking rewards into Credits, contributing them to TDX providers.
- Future tokenomics may allocate rewards to incentivize TDX server contributors.
- Short-term TDX resources and credits will be supported by the Phala team to ensure smooth onboarding and adoption.
4. The most important, Asset Migration:
- Perform a snapshot of all assets on Khala, including:
- Free PHA tokens, delegated assets, unclaimed rewards (stakepool, delegator, and vault), wPHA, and other assets minted on Khala.
- Freeze assets on Khala and mint equivalent tokens on Ethereum to ensure seamless migration.
- After sunset, users will verify their Khala wallet address and sign transactions via Ethereum address on a dedicated website to claim their migrated assets.
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Locked vs. Unlocked Assets:
- Staked assets (locked) will be directly migrated to Ethereum’s Vault.
- Other PHA-related assets will be minted on Ethereum as unlocked liquid tokens.
- Interest Accrual: Vault assets will begin accruing interest as soon as the Vault is established. Users claiming later will receive their principal plus all accrued interest, ensuring no loss of delegation rewards.
5. Phala World NFT reclaim
Given the downturn in the metaverse ecosystem and the rapid advancements in AI technology, we are focusing more of our efforts on building AI-related capabilities. As a result, we currently have no plans to further explore metaverse-related assets. During the asset migration process, we will reclaim PW NFTs and pause any future issuance.
We will gather information on all PW NFT holders and refund them based on the original minting cost of the NFTs. For instance, if User A minted a PW NFT for 500 PHA and has continuously held it, they will receive an additional refund of 500 PHA when claiming their Khala assets. If User B purchased the NFT from a marketplace or received it via a transfer, the refund will still be based on the original minting cost of the NFT.
To ensure fairness, we will take a snapshot of PW NFT holdings and transactions as of December 10th. Therefore, we kindly ask that no further transactions or transfers of PW NFTs take place after this date.
We sincerely appreciate the community’s enthusiastic participation in the project. We have also recorded all addresses involved in the PW NFT project and will consider providing community incentives in future related activities.
Benefits of the Proposal
- Cutting-Edge Technology: Supports SGX-DCAP, TDX, and Nvidia GPUs, aligning Phala with the latest secure computation standards.
- Streamlined Operations: Sunsetting Khala reduces redundancy, focusing resources on a unified and efficient ecosystem.
- Enhanced Collaboration: An Ethereum L2 and TEE marketplace deepen integration with the Ethereum ecosystem, broadening opportunities for growth.
- Future-Proof Infrastructure: The Vault and marketplace prepare Phala for upcoming economic models and scalable community-driven growth.
- User-Friendly Migration: A seamless one-click claim process ensures a frictionless transition for all users.
Next Steps
Upon approval, we will take the following actions:
- Publish the detailed upgrade timeline and migration process via on-chain governance (Motion).
- Collaborate with exchanges to update connections from Khala to Phala or ERC20.
- Officially retire Khala by January 10, 2025, halting block production and collator operations.
- Deploy the Ethereum Vault and Budget Balancer to synchronize APR between Ethereum Vault and Phala’s average pools.
- Execute the asset migration script, minting assets on Ethereum.
- Launch the TEE marketplace with initial team-supported TDX resources and credits.
This proposal marks a pivotal moment in Phala’s journey. By consolidating operations and embracing advanced technologies, we can position Phala Network for long-term success in the ever-evolving blockchain landscape. Let’s take this step forward—together.