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AMA#22 Recap || PolkaWarriors x Khala Network - PhalaNetwork's Canary Network.
Published date: June 1 2021

On May 31, Phala Network and PolkaWarriors organized an AMA with the community to introduce Khala Network - The canary network of Phala, and their plan to participate in the upcoming Parachain auction. 

Phala Network is the first private smart contract network built on Substrate, to provide computing services and protect confidential data for businesses and users. 

Below is a summary of the outstanding questions and answers from the AMA session.

1. As far as I know KHALA will Contribute to Khala in the Kusama slot auction. Can you explain the process of doing this? How many times will KHALA bid for the position and how many weeks will it take?


Yes, Phala will launch pre-mainnet Khala Network on Kusama! And we are going to take part in the slot auction.

It is expected that there will be 5 auctions scheduled with about 7 days between auctions. The slot auction follows a modified "candle auction." The first 2 days are an Open Period, and the next 5 days are an Ending Period. The auction will end at a random time during the Ending Period. The highest bidder at that random time is the winner.

After evaluating the overall situation and ROI, we decided to participate in the Kusama slot auction from the 2nd auction. Khala will bid for an 8-period slot, which means Khala will lease the slot for 6 * 8 = 48 weeks.

Khala chose to crowdfund our slot lease using Kusama’s built-in crowdloan mechanism, which allows people to contribute by agreeing to lock up their own KSM until the end of the lease. Khala will reward its contributors with K-PHA tokens.

2. During a Parachain auction on Kusama. What is Khala's strategy on Kusama slot auction? What do we as investors have to do to participate?


Literally, our strategy can be summarized in 8 key points:

  1. Phala Network will launch pre-mainnet Khala Network on Kusama (mainnet Phala will follow on Polkadot.)
  2. Khala Network’s native token will be K-PHA, which is PHA on Khala. No new tokens are being created. K-PHA can be swapped with ERC20-PHA (and with PHA on future mainnet) at a 1:1 rate.
  3. Khala Network will join the Kusama slot auction when the second slot is released. Khala will bid for an 8-period slot, which means Khala will lease the slot for 6 * 8 = 48 weeks.
  4. Every KSM that supports Khala in the Kusama slot auction through the Crowdloan will be entitled to 100 PHA as reward (PHA: KSM = 100:1). The fixed reward ratio for the Crowdloan is intended to provide each participant a full 100 PHA per KSM, regardless how many KSM are raised.
  5. There are 15,000,000 PHA set aside for rewards on Kusama auctions. Based on the above ratio, when the KSM in the Khala Crowdloan reaches 150,000, there is no more PHA that can be distributed to contributors.
  6. When Khala wins a slot and runs as parachain successfully, 34% of the PHA in the reward pool will be vested to contributors’ addresses immediately. The remaining 66% will be vested monthly over 11 months.
  7. There is an additional reward available for Referrals. If a Crowdloan participant invites an additional participant who makes an additional contribution, they will each receive an additional reward: an extra 0.5% on the additional contribution.
  8. Khala will also leverage the on-chain dApp deployed by the Phala team and several top centralized exchanges’ collaboration channels to participate in the Kusama slot auction.

Read more:

As an investor, you can participate in Khala’s crowdloan by locking up your KSM tokens in our crowdloan DAPP. Follow the step below:

  1. Prepare your KSM by unlocking it in advance. It takes 7 days for your unlock to take effect.
  2. Users can register and invite friends through an invitation link on crowdloan DAPP.
  3. Starting with the second Kusama slot open for bidding, the Khala Crowdloan will be created and users can contribute $KSM for Khala.
  4. Promote Khala and waiting Khala wins a slot!
  5. Khala launches as a Kusama Parachain.

3. Does Khala's native token (K-PHA) support swapping other tokens? What features does K-PHA have? Does it play an important role in the development of Khala Network?


Essentially, K-PHA and PHA (ERC20/BEP20/HECO) are the same tokens built on a different blockchain.

ERC20-PHA can be swapped to K-PHA on Khala Network at a 1:1 ratio through the Khala-Ethereum bridge. This function will be available as soon as the Khala Network is live.

In mining and DAO parts, K-PHA will participate in almost all major links as a pre-mainnet token.

You will be familiar with K-PHA soon.

4. How does Khala capture value through the main application scenarios of Kusama? What role does it play in the Kusama ecosystem?


K-PHA is the native utility token of the Phala Network. It’s usable and captures value in several ways.

The Phala(Khala) cloud economy:

  • Directly computing purchases: PHA is paid for cloud computing services, much like a rental.
  • Cross-chain computing purchases: from external blockchains wanting to add compute or confidentiality.ff
  • Getting paid for providing computing resources. Those running CPU Miners get paid in PHA for staying available and doing work.
  • Getting paid for running a Gatekeeper (typical PoS yields.)

Phala(Khala) security guarantees:

  • Gatekeepers (who manage workers and produce blocks) must stake PHA. If they act maliciously, their PHA stake will be slashed.
  • Secure Enclave workers must also stake PHA. If they aren’t available or don’t perform properly, they can be slashed.

Phala(Khala) governance:

  • Anyone who acquires PHA can be a stakeholder and participate in on-chain governance.

Short term, PHA may appreciate as people acquire the stake for Gatekeepers and CPU Miners. 

Long term, the computing cloud economy should grow to dominate value generation and capture.

PHA is used for paying for the resources of private computing.

  • Trusted computing resources: The trusted computing power, on-chain state storage, and off-chain storage are all paid by PHA by BOTH staking ecosystem and gas fee.
  • Privacy service payments: Privacy applications service payments in the Phala ecosystem, such as Privacy transactions via XCMP with other Polkadot DeFi protocol, or using Web3 Analytics to make data collection and trading systems.

5. I see many people saying that NFT is the next 'Trend'. I also see some use cases of NFT in the crypto space. What do you think about the growth of NFT in the crypto space and the real world? Will PhalaNetwork roll out any NFTs in the future?


Yes, of course. And I think Phala can bring Secret Boxes NFT into the market, it is much more fun! You don’t know what you get in the market, you can also sell the NFTs in “unknown” status.

It will be fun, like a much powerful version of hash marks: Hashmasks randomly combine elements to generate your NFT.

But Phala could set up a certain content of NFT secretly (could be verified), then sell when no one knows what’s in it! It’s quite popular

6. Could you tell me about Cloud’s use cases? Which industry can apply it? Who needs to use cloud computing?


I think that in the near future (in the future), people will use Phala to protect their privacy just like the SOLID project version which is an exciting new project led by Prof. Tim Berners-Lee, inventor of the World Wide Web,. The project aims to radically change the way Web applications work today, resulting in true data ownership as well as improved privacy.

Then applications are decoupled from the data they produce, users will be able to avoid vendor lock-in, seamlessly switching between apps and personal data storage servers, without losing any data or social connections.

Then we should reuse existing data. Developers will be able to easily innovate by creating new apps or improving current apps, all while reusing existing data that was created by other apps.

We hope to provide an analysis tool with low access cost and similar experience as Google Analytics, which can help developers and enterprises analyze product data under the premise of protecting user privacy, and even anyone under the premise of confidentiality. You can use the long tail data for analysis after user authorization. This product is Web3 Analytics (hereinafter referred to as W3A)

We designed this product from the perspective of data rights, and finally formed a separation of three powers:

  • Data ownership: Physically guarantee that data ownership only belongs to the user, the key here is the privacy protection.
  • Data computing power: computing power is enforced by the authorization system through the blockchain guarantee, so it belongs to the confidential smart contract (the purpose of the Phala network is to run the confidential smart contract).
  • Data usage rights: circulated by the authority system, users authorize developers and third parties can use the authorized parts.

Before countless blockchain projects brag about being able to “break the data silos”, I have heard it. As everyone sees, how do we achieve it?

  • First, W3A provides Web and mobile SDKs: a website owner can access the W3A SDK, and implement end-to-end encryption to report buried sites. It can be guaranteed here that the private key is owned by the user and the TEE miner equipment, and neither the developer nor us can decrypt the data.
  • Second, decentralized user data management: users can sign the private key and enter the W3A console to manage data and their access rights. He can delete and download all his data
  • Third, for third parties who want to use data: he can submit it as a confidential smart contract of the Phala network through a templated W3A contract or custom SQL. These calculation contracts will query whether the user has completed the authorization with the private key signature. If the authorization is completed, this analysis program will complete the data analysis in TEE and display the resulting data to the developer. In this step, no one can see the data, but can see that the entire process and data are credible.

APP owners only need to embed a few lines of code in the existing application. Our confidentiality contract will complete all the remaining work. It is as simple as integrating Google Analytics. We will provide a personal data management app for users. And data analysis background for developers.

The second is to develop DAPP without a server directly on the blockchain. This part is the ability of Phala as a parachain. Third-party development does not necessarily need to be based on Phala, but can develop Dapps or Defi on combination blockchains and use the privacy computing power they need.

For example, a developer needs to develop a Dapp, and needs to use Ethereum-like smart contracts, confidential smart contracts, and decentralized storage after encryption of private data. It can be developed on any blockchain and easily invoke the Phala protocol. To complete the off-chain black box mission.

You can run arbitrary programs on Phala, both autonomous like smart contracts, or just “regular” code that can be updated and maintained once it’s released on the network.

Read more: 

7. Can you list 1-2 killer features of this project that make it ahead of its competitors? What is the competitive advantage your project has that you feel most confident about?


We have developed some applications based on Phala

  • pDiem/pBridges

Except Ethereum and Polkadot assets privacy protection, we’re developing lightweight cross-chain bridges to the Polkadot ecosystem for Bitcoin-based chains, and BTG will be the first asset bridged.

This project is being built to work with tokens from any blockchain based on Bitcoin's underlying technology, including LTC, BCH, DOGE, BSV, and other long-tail offshoots of Bitcoin. This will provide a path for the liquidity of the $36 billion market value of this coin family into the Polkadot ecosystem for use in smart contracts, DeFi, DEXes, and more.

Phala Network has demonstrated the ability to deliver security and confidentiality through a network of TEEs.

  • Web3 Analytics

First of all, 99.999% of users run off-chain, instead of on-chain. Thus the question could be defined as "how could we protect datas for Internet users"?

As you may know, an important reason why Internet companies could thrive is they make the most efficient and wisest decisions based on billion user data analysis. Each click and move of us would be reported through event tracking. How can we change this?

We want to help people with event tracking. We are preparing an easy and smart tool just like Google Analytics. We want to help devs and enterprises to collect data while protecting user privacy.

This is what we are developing: Web3 Analytics. We designed it via a perspective of "separation of data powers":

  • right to own: physically belonging to the user him or herself only;
  • right to compute: forcibly executed by Phala Network;
  • right to use: authorized to devs and companies as users' wish.

How do we "break the isle of data"?

  • Web SDK & mobile SDK offered by W3A: easily accessed and 100% safe (no one but private owners and TEE miners could decipher the data);
  • Decentralized User Data Management: A user with private key could delete and download data of his or her own on W3A control deck;
  • Third-party Friendly: Any third party willing to access the data would only need SQL or W3A templates.

8. I see that Phala already developed a new lending protocol name with ‘Worker-Nodes’ for borrowing reqired PHA on stake. Have you already tested and successfully implemented it? Can you share with us the result?


In every stage of Phala testnet, we launch a mining campaign. On POC-2, we attracted more than 1000 full nodes joining Phala; on Poc-3, we attracted more than 2500+ TEE hardware in the competition. Because we prepared the easy-to-join network, clear docs, and have friendly moderators, miners can join mining at very low cost. This helped us build a very strong and active miner community.

9. Why would projects use Phala as opposed to Secret Network that Plasm is bridging over to the Polkadot ecosystem?


Lots of questions to us are like this. Common points of Phala and Secret: We both run confidential smart contracts. Both rely on hardware enclaves (Intel SGX). But we have so many differences from each other.

SCRT is in the Cosmos ecosystem while Phala is in the Polkadot ecosystem.

On Phala, we separate consensus and computation. We can have unlimited numbers of miners to run computation tasks. But all nodes of the Secret network run the same computation task means that there’s a limited computation performance in the network.

Therefore, SCRT has a similar throughput to other blockchains (ETH, EOS, etc), but Phala is a rollup architecture and can scale thousands of times. On the market side, SCRT targets blockchain use cases, while Phala targets both blockchain and cloud computing scale scenarios.

10. On moving forward through your roadmap, what are your most important next priorities/Milestones? Does Your Project have enough fundamentals (Funds, Community, ect) to achieve those milestones?


According to this roadmap, we can see that there’s plenty of work this year. To be more specific, we are going to:

  • Prepare and win parachain slots auctions on Kusama and Polkadot
  • Launch parachain mainnet.

After this, we will:

  • try to run WASM in Phala TEE.
  • Launch a general confidential smart contract, Web3 Analytics, and complete the decentralized governance.
  • Build tools for TEE workers, we hope to cooperate with five mining pools to get at least 10000 TEE workers mining for Phala
  • Launch Darkpool on Kusama.
  • Develop over 50 active developers.


  • We plan to launch our most POWERFUL weapon: Launch Privacy Cloud Platform.

I believe privacy cloud will replace Amazon and Google cloud as someone in tech who has used those platforms - they are antiquated.

At the same time, we have a strong community power. Our community has nearly 100,000 users from all over the world, including English, Vietnamese, French, Spanish, Italian, Persian and other language communities. We have dozens of outstanding watchmen and local ambassadors to help us spread the Phala's idea in the community. Soon we will also launch a community influence plan to recruit influencers with extensive influence on social media to build a community! Please stay tuned!

In the live questions sections, Marvin did answer several short questions from the Polka Warriors community.

1. I see mining is available on Phala so where can I get the TEE-compatible required hardware?


The mining is now in the testnet environment. The formal mining will be launched after we got  Kusama slot.

And about the hardware, we have an Google Doc collected by our miners which you can refer to: 

2. I saw that some of the products Phala offers to it’s users are two things called “Darkpool” and “DarkWallet”, but it intrigued me the fact that you presented them on your website together, do they function as one sigle product, why? Can you explain us more about this products and why are they “Dark”? What differences this DarkPool and DarkWallet have if we compare them to a normal Pool or a regular Wallet?


Yep, we have “Darkpool” and “DarkWallet

The Dark Wallet is: An on-chain wallet that enables assets on any parachain to be converted into “invisible” assets. Because there will be so many parachain-assets on Kusama and Polkadot, privacy protection for users is a necessary point. Users on any parachain like Acala, Reef, Literntry can easily transfer their assets to Phala Network, and deposit their tokens into the Dark Wallet. Thanks to XCMP offered by Polkadot, this can be done in a permissionless way, even without a single line of code change on the other parachain side. Whenever some assets are deposited to the Dark Wallet, all the transfer transactions are e2e encrypted, and will not be identified as a “transfer” transaction on block explorer. The blockchain only has the unreadable cipher.

The Dark Pool is : With the assets in Dark Wallet, Phala team will build a DEX and a lending Dapp as confidential smart contracts, running in TEE enclaves, to make all DeFi activities privacy-preserving. Trading privacy is valuable for big players in the DeFi world. So people would love to hide their identity and trading history for DEX and other DeFi products… This idea is supported by the Kusama treasury.

DARK, symbolizes data protection, and privacy protection.

For every human, we are hoping to define a next-generation privacy-protecting wallet and pool— that you can hide your private assets and data, anytime at anywhere, as you wish.

3. Beside from TEE mining, what are the other ways to acquire $PHA token? Do you have any campaigns for communities that could not mint in TEE platform?


  • In addition to mining, we have many opportunities to gain PHA tokens, such as in today's ama, haha.

  • In the upcoming kusama slot auction, we prepared 15 million PHA tokens for our contributors, whether you locking KSM or invite some ppl to participate, you will get a great rewards! For each KSM you locked, you will get 100 PHA back.

  • We also have a community ambassador program. Becoming a community builder will also be rewarded with generous rewards. Ambassadors are being recruited.
    For details, please see: 

4. Many new projects initially developed well but were suddenly abandoned. How will you manage the project to maintain its position in the market and become a good project in the blockchain world?


Ah, very cruel facts..

Phala' got a very healthy development. We have a solid community foundation and a huge community of miners (waiting for the start of formal mining). 

At the same time, we are also preparing for the subsequent implementation of various businesses. I believe that even if the bear market suddenly comes, Phala will develop very well.

5. How does Phala Network manage to combine scalability, interoperability and composability to interact with other blockchains, in an environment that provides security and speed in transactions?


As we mentioned before, Phala is a TEE-blockchain hybrid architecture based on Substrate. But so far, all the TEE protocols lack the foundation of composability-interoperability.

As we know, composability-interoperability is the most important precondition of the DeFi ecosystem in Ethereum, however, Phala, according to a creative design, completed the comparability-interoperability between contracts, even the blockchains.

Phala is not based on Byzantine, and the trustless is guaranteed by the trustless hardware, but the single hardware cannot achieve availability and state-consistency.

If you cut off the power, the hardware must be out of work; Multiple trusted computing nodes need to interact, and the unclear sequence of code execution will result in double-spending, which does not satisfy state consistency.

So, we need to solve these two problems with blockchain technology. That is to let everybody download data without permission by storing the status data on-chain. Beneath this consensus computing, each node can get the status with consistency.

In 1 sentence, we are born with the ability to cross-chain. The Phala contract is parallelism, and it should cooperate with the interoperability protocol between smart contracts to accomplish comparability, and we are Compatible with multiple cross-chain methods.

6. Your Platform is an ecosystem which can support many industries such as finance, gaming,..., so it may confuse for your potential customers and partners to find out which will be your main target. Can you tell us which are the priority products you are developing and what are the difficulties during that product development?


Phala's main target is build a cloud computing platform.

First of all, I want to clarify that, unlike Apple Cloud, we generally refer to "cloud" not just "data storage". For example, you said uploading data is a typical cloud scenario, but it is only one part

Cloud services include cloud-based computing, storage, CDN, cloud-based container services, etc.

So when a developer uses the cloud, he needs to deploy a program he needs to run, and schedule the resources needed for the program to run effects. For example, if you need to deploy a program used by millions of people, the backend design of load balancing such as K8S is very important.

Therefore, when you use private computing, it is actually different from ordinary cloud deployment. Phala will provide a container to run the program. You can deploy this program in the container. You only need to pay some PHA to pay for the resource costs of your app.

Since the data operation of this program is "private", how does Phala certify that your program is safe and trustworthy?

Remote authentication is a function of TEE. A certification request is generated inside the hardware. This request contains a hardware signature. Intel/AMD/ARM  will check the signature and issue a qualified certificate. This certificate can prove to a third party that the program is indeed executed in the TEE environment. Simply put, this is like zero-knowledge proof, anyone can verify, but it is more powerful and flexible than zero-knowledge proof.

7. Does Phala Network have a past staking product where can I stake with the best or high apr to stake?


we have a staking system for TEE worker, but we need to wait after Kusama slot auction, and Phala can run as a parachain.

Different miners nodes will give different APR rewards. Users can determine how to stake by integrating node stability, node quality, and reward interest rate, etc.

8. Undoubtedly, marketing strategy is very important for every projects. So what are your plans for marketing & promotion? How will your team work to build strong relationships with communities?


We plan to cooperate with first-class public relations companies and communities(such as Polka Worriors) to spread and evangelize more widely!

9. In your opinion, which is more important for the Phala Network and why ? Community, Investors, Market or Exchange.


All you mentioned are so important for Phala.  And of course, there is one more thing you didn’t mention, technology

10. I still haven't found a market exchange that trades PHA token, or PHA token sale, how do we get PHA token / coin?


You can get all you need of trading info here


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