AMA Recap of Crypto Legacy x Phala Network by Marvin Tong
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Alfred, [26.06.21 10:03]
@MarvinPhala are you there?
Marvin Tong
Hi guys!
Alfred
We welcome all those who join us in this prestigious AMA event with Phala Network
Marvin Tong
I’m here, glad to see you
Alfred
Well, what do you think if we start with the AMA
Marvin Tong
Yeah, i’m ready!
Alfred
Introduction Questions
P1. Can you provide a brief introduction about the Phala Network team?
Marvin Tong
Thank you, Alfred.
Hello everyone, i’m Marvin, the co-founder & CEO of Phala Network. I’m also the advisor in PAKA.fund which is a Polkadot target DAO venture.
I’d like to introduce myself first, then about our core team. Fortunately, our core team has recently recruited 3 high-level experts executives, I will share with you later.
Before the team, I’d like to introduce phala first, so that you can get a clear picture of what we are fighting for.
Alfred
Great
Marvin Tong
Phala Network tackles the issue of trust in the computation cloud.
This blockchain is a trustless computation platform that enables massive cloud processing without sacrificing data confidentiality.
Built around TEE-based privacy technology already embedded into modern processors, Phala Network’s distributed computing cloud is versatile and confidential. By separating the consensus mechanism from computation, Phala ensures processing power is highly scalable.
Together, this creates the infrastructure for a powerful, secure, and scalable trustless computing cloud.
So this is the brief intro about Phala Network
And about me, My name is Marvin, the co-founder & CEO of Phala Network. I’m also the advisor in PAKA.fund which is a Polkadot target DAO venture.
I was Senior Product Manager at Tencent & Didi which faced millions of users, and I am personally good at business strategy design, experience in design service, and data-driven decision.
The first time I heard about blockchain was from my friends, and it attracted my curiosity. I spent a lot of time figuring out what blockchain technology, POW, smart contracts, and Dapp were. Then we begin to start with Phala Network, a privacy-preserving cloud computing service in the Polkadot ecosystem based on Substrate.
Alfred
Interesting
Marvin Tong
We’ve got 3 co-founders. They are all excellent in their respective fields and are my partners in the fight side by side. And if you want, the info is also showed in our web phala.network
Our Co-founder & Chief Scientist is Hang Yin
He is a former Senior Software Engineer at Google, leading projects of Mandarin speech recognition, voice search, and Gmail intelligent semantic assistant, with profound experience in artificial intelligence; Founder and Lead Developer of Bitcoin Gold; B.S., Computer Science and Technology, Fudan University.
Another Co-founder is Zhe Wang
Serial entrepreneur. Former CEO & CTO of Xiaohei AI Games & Haha AI Vending Mechine. Initial owner of 20+ patents including 3 blockchain patents. M.S., Computer Science and Technology, Huazhong University of Science and Technology.
Alfred
Wow, nice
Marvin Tong
Co-founder & CTO is Jun Jiang.
He is Webmaster of RubyChina. Former CTO at KnewOne. Former Software Architect at DJI.
Some good news is, we got some new and strong blood.
Alfred
Thank you for your detailed answer
Marvin Tong
It’s honor that we’ve 3 high-level experts into its talent composition this month, they are:
Shunfan Zhou, Ph.D. Candidate in System Software and Security Laboratory, Fudan University
Sandro Gorduladze, the partner of HashCIB, a European financial services company specializing in digital assets
Ruby Wang, the former Operations & Marketing Director of HashKey Hub
There is fully detailed intro about them in this article (probably we will get a Spanish version later)
Over, thank you
Alfred
Q2. What potential does your native PHA token have and what are its different use cases?
Marvin Tong
It’s purely accidental and the result of a flash of inspiration. We ourselves often explore why we came up with this name. Haha, but i love this name
In Chinese, the pronunciation of Phala is ‘make a fortune’
Ok, i’ll answer this question then
Here is PHALA’s whitepaper https://files.phala.network/phala-token-economics-en.pdf
The total supply of Phala token — PHA — is 1 billion, among which 70% (70 million) is minable. Besides, we will airdrop 90 million PHA to users. I have to say, it’s quite aggressive.
But we designed it like this because:
- We want more miners to provide their TEE devices;
- Based on reason 1, we hope this network to be as stable and secure as possible so it’s impossible for hackers to identify which single one TEE should be attacked;
- It’s possible to adjust the quality and requirement of computing power.
Phala would be featured by private computing power and data dealings. And PHA will capture the value of any behavior related to:
- Deals of Data Authorization: between analysts and data providers;
- Resource of Trusted Computing: e.g., trusted computing power, on-chain stats, off-chain storage, etc.;
PHA is the native utility token of the Phala Network. It’s usable and captures value in several ways.
The Phala 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 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 governance:
- Anyone who acquires PHA can be a stakeholder and participate in on-chain governance.
Short term, PHA may appreciate as people acquire stake for Gatekeepers and CPU Miners.
Long term, the computing cloud economy should grow to dominate value generation and capture.
Briefly, based on the principle of “fair distribution based on contribution”. We hope the ones who paid effort and time to our network could be rewarded respectively. Our distribution system is designed as bellow:
Phala will distribute 700 million $PHA through TEE Mining. The total supply of mining rewards will be fixed without extra issuance and mining rewards will dwindle as time passes.
Miners can obtain PHA through 2 types of ways:
- simply being stably online;
- completing computing tasks.
Alfred
Ok
Q3. Can you talk a bit about your prospects and how they will benefit from your products and services?
Marvin Tong
So the question probably could start with: Who would use and build on Phala?
The answer is
- Users and builders who value their own data and privacy
- Businesses looking for a technical solutions to alleviate risks of data breaches or comply with privacy regs like GDPR or CCPA
- Businesses worried about their projects getting deplatformed or prohibited, or spied upon, or looking for a better solution than on-prem deployment
- Crypto and DeFi projects looking to add confidentiality features or high-performance computing accessible on-chain
Phala provides a trustless computing cloud for organizations in need. For privacy protection, it’s a gradual procession from legislation to a more thorough, efficient and peaceful solution. We saw an explosion of data in the age of Big-data. However, we have no choice but to count on big companies to keep our data safe and sound. “Murphy’s Law”, an adage or epigram that is typically stated as: “Anything that can go wrong will go wrong”, with which we could see:
1.spam messages and spam emails can always reach your email or personal social account;
2.our faces were captured and used for machine learning without our noticing;
3.Though legally, big companies are collecting and analyzing our data everyday for their next function or decision. Those I mentioned are small cases that happen to each one of us. Severe cases related to leak of business documents are way more than that. Someone might ask, “how could we receive better service if I don’t share data?” Well, if there’s no technology that could solve this problem in this world, it’s a question of ethics; if there is, it’s a need and demand that we, Phala, is dedicated to meet and realize with our protocol, for the scenes related to exchange and computing of sensitive data.
Alfred
Wow
Ok
Marvin Tong
I think the application of Web3.0 apps and privacy protection programs will be progressive, same as the Internet companies 10 years ago.
Alfred
Q4. What is that milestone at Phala Network that you are most proud to achieve?
Marvin Tong
In the part of the roadmap, we have finished all the testnets press-test with the end of Vendetta, the stats are impressive, topped out 26,400 online miners and total power hit 982,580.
And in the products side, Web3 Analytics and pDiem(formerly pLibra) have won the W3F grant each, also, we completed pDiem’s 3rd milestone document and plan to submit it to W3F ASAP.
As for the tech part, we reconnected to Rococo v1 at the very beginning of its reset and run well now. The biggest exploration on Rococo is that we released the first cross-chain demo with Acala last year.
For now, the most important thing is winning parachain slots auction on Kusama and Polkadot! And we provide 15,000,000 PHA as reward
In the next stage, we have lots of things to do:
- Win parachain slots auction on Kusama and Polkadot.
- Launch parachain mainnet.
- 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
- Finally: we plan to launch our most POWERFUL weapon: — Launch Privacy Cloud Platform.
Alfred
Q5. Can you explain how users can participate in the $ 30,000 PHA activity or Airdrop? And what are the objectives of this Airdrop?
Marvin Tong
There is an airdrop plan created with Phala and CoinmarketCap, the total rewards are 30000 $PHA.
https://coinmarketcap.com/currencies/phala-network/airdrop/
As i mention in the last question, Phala Network will launch pre-mainnet Khala Network on Kusama (mainnet Phala will follow on Polkadot.) so we need to win a slot in kusama network with all the community’s support.
There are 15,000,000 PHA set aside for rewards on Kusama auctions.
This CMC campaign is one of the auction event.
For Khala slot auction strategy, every $KSM that supports Khala in Kusama slot auction through the Crowdloan will be rewarded to 120 $PHA(PHA: KSM = 120:1).
When KSMs staked for Khala Crowdloan’s break 30,000, the reward ratio will be automatically adjusted to 1: 150(KSM: PHA). Each KSM backing Phala in the Crowdloan will earn 150 PHA. Again, it’s effective for all users who contributed.
Also you can still earn a cool NFT to memorialize our first slot auction. We’re introducing two additional Honor Gem NFTs — Colorful Gem and Sparkling Gem — available to all accounts contributing at least 1 KSM during the course of the auction. Even if you’re already qualified for an Early Bird Gem, you can still get these new Gems!
Alfred
I think it’s a wonderful initiative
Marvin Tong
If you participate in this Coinmarketcap’s campaign, you can get an extra 5% of rewards!
That is, each ksm contribution will get 126 PHA! The APY is over 51% now.
And we provide a $100 PHA bonus for this AMA!
Alfred
Excellent
Thank you for your answers, we just finished the segment of:
Introductory Questions
We go to the segment of:
Twitter Questions
Are you ready?
Marvin Tong
Sure
@CesarSi92629775
What are some of the use cases and types of applications currently running on the Phala platform?
Marvin Tong
As Phala Network grows, there would be more amazing applications and services based on Phala to serve people and our communities. For now, you can find many things we are building already:
- DarkWallet, which will include all ptokens through crosschain crypto like pLibra/pDOT/pKSM/pETH/pRenBTC..
- pLIBRA: a confidential Bridge between Libra and Polkadot. This is also granted by Web3 foundation, will deliver soon
- Web3 Analytics: a cutting-edge data analysis tool for next-generation, able to analyze user data and output results without invading personal privacy.
- Darkpool:Decentralized darkpool for all Polkadot and Kusama Defi
In the future:
One is privacy Defi. Whether it is swap, mortgage or loan, we believe that users of large transactions always hope that their privacy can be protected. Therefore, we are working with zenlink to try to execute swap in a private environment, so that Phala’s dark wallet assets can form a “dark pool”, thereby avoiding attacks by mempool or other arbitrage scripts.
Another attempt is to use confidential contracts to implement the blind box of NFT. You may know NFT, but what if you don’t know what is inside when you buy it? Some current products can realize the random generation of images, but what if the NFT has additional content, such as a Bitcoin private key, or account password? We hope to realize a unique, non-homogeneous NFT transaction that can only be opened by the holder. In this part, we will cooperate with Bondly, Dego and other NFT projects
And more pBridges! We take some time trying to combine Phala TEE tech with Interlay work to build some use cases. We came up with some ideas that we could help building some BTC-family bridges in a more lite client (using TEE replace some part of game theory design) to provide privacy for some bridges.
In this case, our target is not for BTC, but for long-tail BTC fork chains such as BCH, BSV, DOGE, BTG…. We connected with the BTG team, and they are happy to build it together! It seems that we can try this side-project in 3 parties together, and we can also contribute to the Interlay open-source project for more gateways of long-tail chains.
@anyelysmarmona2
¿What partnerships do you have planned in the $ PHAs in the future to further see its real-world applications and make more people aware of the facilities that NFTs offer?
Marvin Tong
Obviously，all businesses can not exist alone，that’s why Polladot can make it come true but others can’t. So, as you can see, Phala always tries to joint other projects to hold campaigns and develop partnerships together. We know the importance of cooperation.
For example, let’s assume that you are going to develop a DeFi contract within a privacy function, then I will suggest to you:
Use Moonbeam/Acala as mainnet
Call the protocol based on Bifrost/Stafi
Develop the privacy function by Phala confidential contract
I believe that with the completion of Kusama&Polkadot slot auction，Phala and other projects will have richer cooperation possibilities，the value of PHA shall be improved too.
And in the future, we are going to make partnerships with partners in the Internet world, such as Google cloud.
@meml1997
I saw Phala offers two things called “Darkpool” and “DarkWallet”, but it intrigue me that you presented them on your website together, do they function as one product, why? What differences this DarkPool and DarkWallet have if we compare them to a normal Pool or a regular Wallet?
Marvin Tong
For every Polkadot user, we are delivering a next-generation privacy-protecting wallet — a killer app that you can hide your private assets and data, anytime at anywhere, as you wish.
For this version, Phala Dark Wallet consists of two modules:
- Normal Wallet: simple and the same as other wallets
- Dark Wallet: secret assets converted into “invisible” on-chain.
And you will see 2 types of assets:
- PHA — Phala Network native token
- Other assets — Self-issued private tokens (like ERC20s)
Function:
Convert — Convert your asset from public (visible) to private (invisible) or in turn
Secret Transfer — Transfer your dark asset to a recipient, which will not be identified as a “transfer” in block explorers but a phalamodule.
Issue Secret Token — Define and issue your own secret assets whose balance and transfer records will be invisible as well What dark asset is to normal asset is like what cash to digital payments. Of course, digital payments are more convenient; but I bet you would love to use cash if you want to protect the time and location of some secret trades. :p
Alfred
Great
Marvin Tong
Dark Pool is an agreement to protect Defi block transactions, to protect lending and contract users from malicious attacks
Dark Pool and Darkwallet are totally different 2 product
@Lidiamga
How is Phala’s mining mechanism, I read that Phala using NPoS system for consensus instead of using PoW, what is the different consensus NPoS and PoW? And for part of mining it said ‘coming soon’, can you tell us what coin will be available for mining? Its kind of BTC/ETH?
Marvin Tong
Similar to Polkadot, Phala applies NPoS (Nominated Proof of Stake) Inflation Model on PHA issuance to reward Gatekeeper and nominators. The volume and rate of PHA inflation are flexible through sophisticated algorithms to appropriately guide token staking and achieve shared security and token liquidity.
NPoS is a consensus algorithm designed by Polkadot based on PoS algorithm. Validators run nodes to participate in the production and confirmation validation of blocks. Nominators can stake their own tokens for votes to obtain nomination rights to nominate validators they trust to get rewards.
The reward of NPoS mainly comes from the additional token issuance, which is the source of inflation as well.
We expect 40% of tokens to be staked in the NPoS consensus system, and 60% to be used for resource expenditure and market circulation. Phala expects an annual inflation rate of 5% and the average annualized return on staking to be 12.5% at a 40% staking rate.
We’ll launch pre-mainnet Khala on Kusama, then K-PHA is available for mning. K-PHA is a 1:1 token with ERC20 PHA. There will be a cross-chain bridge to exchange the 2 tokens
@TovarRosbeli
In what ways does PHALA make cloud data processing more user-friendly and what benefits does it offer to ordinary users?
Marvin Tong
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. 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.
The whole process will be simple and smooth
We plan to make it as easy to use as an Internet application
Alfred
We just finished the segment of:
Twitter Questions
Now we move on to the segment of:
Live Questions
take the time you want to answer but please answer a minimum of 5 questions
Marvin Tong
Give me sometime
@Josuhanny_M
Hello @MarvinPhala
My question:
How PhalaNetwork provides a more user-friendly and convenient experience for miners, and how the Phala team has been updating the deployment scripts to have a more compact version of the mining script that meets the majority of miners’ requirements individual?
Marvin Tong
We will work with the developer community to provide more useful tools for miners. The code bounty program is in progress
At present, developers in the community have made a lot of miner monitors for Phala, and we will also develop two or three tools with similar functions. The purpose is to help miners monitor their mining progress in a better way
https://forum.phala.network/t/topic/2045/12
this is the link of PHALA code bounty, all the developers have a chance to make contribution
At the same time, Phala launches Mining Pool Protocol Component, we expect there will be more and more miners and mining pools joining the Phala network to build out the Phala ecosystem. The challenge is to enable large-scale deployment of mining worker machines.
We’re excited to announce that we’re addressing this challenge by launching an open-source mining pool protocol component to help miners, third-party mining pools, and clustered mining sites manage TEE equipment: Phala Runtime Bridge.
For more: https://medium.com/phala-network/phala-launches-its-mining-pool-protocol-component-1e7373ca5629
@Topind
Hello @MarvinPhala
How is it possible to convert my asset from visible to invisible or either way?
Marvin Tong
This is the function of the dark wallet. Good news is, we’re going to Make some upgrades with more excellent functions to the wallet, so stay tuned!
About this version of dark wallet, it’s also good to have a try
On Phala Dark Wallet, one can:
- Issue his own secret asset;
- Convert his asset into a “secret” one whose balance and transfer records would be “invisible” in blockchain explorers.
Get started
- Create Phala account: https://app.phala.network/legacy.html#/explorer
- Claim test tokens: https://t.me/phalafaucet
- Have fun at Dark Wallet: https://app.phala.network/wallet
@Arbestefy
Why can we be sure that our data will be safe in Phala and I would like to know what goals you want to achieve in the near future?
Marvin Tong
Phala’s core technology: Confidential Smart Contract
Confidential smart contract keeps secrets. Phala Network adopts a TEE-Blockchain hybrid architecture, where the confidential contract runs inside a special black box — TEE enclave — in CPU. In the enclaves, the execution is functionally isolated from the external operating system even the hardware, which ensures security and confidentiality at the same time.
The management of personal data must be trustless. The risk of data leakage exists as long as it’s managed by human. So it shouldn’t be done by any centralized party.
Blockchain makes a trustless system possible. However, blockchain can’t be used alone to process or store privacy data because of its transparent nature.
Recently TEE technology gradually spread and is already widely used for data protection, but is vulnerable against targeted attack and unsustainable on liveness.
A combination of TEE and blockchain solves the problem by implementing confidential contract.
@Fighter_0022
Does your project support staking program?, if yes, how is, your stake system work what is the requirement, for user, if they want to stake in your platform??,”
Marvin Tong
Phala’s mining mechanism determines that miners must make a basic staking before they start mining
We also allow ordinary users who are not miners to stake for TEE nodes, which we call “common beneficiaries”.
Later, we will launch an online stake platform for ordinary users to stake. What they can get is part of the mining profit of miners.
@Josuhanny_M
Many blockchains were only software and architecture based and lack of confidentiality has long been a limitation to mass adoption so I ask: How will hardware help build a secure and scalable blockchain that preserves confidentiality for use personall and business?
Marvin Tong
After all, from Bitcoin to Etherum, actual functionality of blockchains is all software-defined. Hardware-based solutions are usually more centralized. However, in search of more private use-cases needed for businesses, decentralised finance and other blockchain-native applications, we could design a solution with the best balance between scalability and confidentiality, while still keeping it trustless.
This can be acchieved by carefully combining software properties of blockchains and innovations in hardware.
Phala Network provides a global private computation cloud. It can be used as a platform for confidential smart contracts. They differ from “traditional” contracts on networks like Ethereum in that Phala smart contracts run inside a special hardware enclave in a CPU, i.e. Trusted Execution Environment(TEE).
The program running inside TEE is highly isolated, using it’s hardware-encrypted RAM. A malicious attacker can neither read the data in the memory without authorization (i.e. a cryptographic key that is stored inside the same TEE, only visible to the device itself and not external hardware or software it interacts with) nor manipulate the program to produce any unintended behavior.
In Phala Network, we call the supportive program running inside TEE “pRuntime”. pRuntime is the runtime environment, or an “operating system” to put simply, that maintains the basic TEE Miner and Gatekeeper protocol inside the TEE.
It handles the TEE remote attestation, on-chain registration, key management, and confidential contract execution.
we are planning to add support to other TEE hardware, such as AMD SEV and Arm TrustZone. If other chip manufacturers jump into the race to eliminate Intel’s hegemony in this nacent hardware space, we will be quick to adopt them as well to ensure reliability of Phala and resistance to any exploits.
On the TEE side, the runtime is also upgradable.
When upgrading pRuntime, we should submit the hash of the new pRuntime version to the blockchain. Then the community can review the code, discuss, and vote for the upgrade by an on-chain governance process enabled on Phala.
Both kinds of node operators on Phala, gatekeepers and miners, have to upgrade pRuntime once a new version is accepted on-chain. It is easier for miners because they can simply stop mining, do the upgrade, and resume mining.
With the help of hardware and carefully designed protocol, we explained that it’s possible to build a secure and scalable confidentiality-perserving blockchain for personal and enterprise-scale use. Only a public blockchain with a transparent codebase of its runtime and a sufficiently decentralized set of miners and gatekeepers can allow this. And that is exactly what we’re building at Phala.
Alfred
thank you very much for sharing your successful project with our community, we will be waiting for the news and milestones of your project!
Marvin Tong
Thanks for hosting a great AMA @LordAlfred