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Phala Network to Leave Polkadot for Scalable Ethereum Layer 2 Solution
Phala Network, a Polkadot-based parachain known for private cloud computing solutions, is officially transitioning to Ethereum Layer 2, following a successful community vote on a recent governance proposal.
Migration Approved: A New Era on Ethereum
On Wednesday, Phala confirmed via X (formerly Twitter):
“Proposal Passed: Phala is Migrating to Ethereum L2!”
The move is described as a strategic leap toward greater scalability, better integration with enterprise use cases, and a stronger infrastructure foundation aligned with Ethereum’s vast ecosystem.
According to the announcement, PHA tokenholders will receive new ERC-20 tokens at a 1:1 ratio. The migration process is expected to begin before November 20, with staking, rewards, and governance continuing without interruption on the new network.
Why Ethereum? Why Now?
Phala already launched a functioning Ethereum Layer 2 earlier this year. The approved proposal, first submitted on September 27 by Phala ecosystem contributor “doylegxd”, argued that Polkadot’s scalability limitations and high resource costs made the shift necessary.
“L2 offers lower operational overhead and direct integration with Ethereum liquidity and tooling,” the proposal stated, highlighting the advantage for GPU-based confidential computing and TDX deployments, where early commercial traction is already visible.
Unlike projects like Astar or KILT, which expanded to Ethereum while keeping Polkadot ties, Phala is committing fully to Ethereum, seeking to focus on next-gen AI-integrated Web3 infrastructure.
Phala’s Market Standing
Phala (PHA) currently ranks as the 11th-largest AI-agent-related crypto by market cap at $80.6 million, according to CoinGecko. It’s also in the top 50 AI tokens, reflecting its niche but growing role in Web3 AI infrastructure.
