AI Polkadot Parachain Phala to Fully Transition to ETH Layer 2
The community has voted chiefly to move the AI-focused parachain from Polkadot to its own ETH Layer 2 (L2). This decision comes later than months of discussion and thought among all parties involved. The change is expected to make the system more scalable, secure for businesses, and better suited to current market needs.
Phala’s executives said that the move will begin before November 20. This ensures that PHA tokenholders receive the identical quantity of the new version on ETH at a 1:1 ratio. The new L2 environment will not affect essential network functions like staking, rewards, and governance.
Why The Move Happened
Phala’s is based on its current integration with ETH. The project launched a live ETH L2 in January, generating business interest in confidential, computation workloads. The migration plan, led by ecosystem leader “doylegxd,” pointed out the difficultys with Polkadot’s infrastructure, including its inability to scale and the high operational costs of renewing parachain slots.
By entirely shifting to ETH L2, Phala aims to leverage ETH’s liquidity, tools, and native compatibility with cutting-edge compute technologies. The new environment is the best place for its decentralised, private compute workloads, which include support for AI-powered apps and TDX deployments.
Effect on Tokenholders and Governance
The changeover procedure ensures that PHA tokenholders receive ERC-20 tokens, which they can utilise in ETH’s expanding and AI ecosystems. The move prioritises continuity, ensuring that key services such as governance and incentive distribution remain in place and are easily accessible during the migration phase.
With a market worth of $80.6 million, is the 11th largest AI-agent-related crypto asset and one of the top 50 AI tokens in the world. The strategic shift to ETH positions it for further growth and adoption by businesses in the burgeoning field of private AI computation.
The Changing Multichain Dynamic of Polkadot
Astar and on the other hand, have opted to grow on ETH while still being on Polkadot. Phala stands out for forcefully leaving Polkadot behind, focusing entirely on ETH to concentrate resources and exploit its particular technological opportunity.
Phala’s move indicates that ETH Layer 2 has become a mature platform for advanced AI computing, with specialised Web3 projects shifting their focus to become more scalable and business-relevant.
