- Phala Network has officially voted to migrate from Polkadot to Ethereum Layer-2, aiming to enhance scalability, enterprise-grade security, and access to Ethereum’s liquidity and tooling.
- The move marks a strategic pivot for the AI-focused decentralized computing project as it seeks to accelerate confidential AI and GPU-based workload adoption.
Phala Network, a decentralized cloud computing project originally launched as a Polkadot parachain, has officially voted to migrate fully to Ethereum Layer-2 (L2), marking one of the most significant cross-ecosystem shifts in recent months.
The move is part of Phala’s broader strategy to scale confidential artificial intelligence (AI) and GPU-based computation for enterprise clients.
The migration proposal, passed by the community earlier this week, was confirmed in an X post on Wednesday, stating: “Proposal Passed: Phala is Migrating to Ethereum L2! This marks the next chapter for greater scalability and enterprise-grade security.”
According to the announcement, PHA tokenholders will receive a new ERC-20 version of the token at a 1:1 ratio, with the migration set to begin before November 20. The team assured that all staking, rewards, and governance functions will continue seamlessly on the new Ethereum-based network.
📣 Proposal Passed: Phala is Migrating to Ethereum L2!
This marks Phala’s next chapter after Intel SGX, embracing Intel TDX and GPU-based confidential compute for greater scalability and enterprise-grade security. pic.twitter.com/pNlwQUU62W
— Phala (@PhalaNetwork) October 8, 2025
A Strategic Shift Toward Scalability and Liquidity
Phala’s migration is not a sudden decision. The project already launched a “live and functional” Ethereum Layer-2 earlier in January, giving the team months to test integrations and build early enterprise traction.
The proposal, initially submitted on September 27, was led by Phala ecosystem success lead “doylegxd”, who emphasized the benefits of consolidating operations in an Ethereum Virtual Machine (EVM)-aligned ecosystem.
“Operating on Polkadot would have meant renewing a parachain slot, locking Phala into infrastructure with limited scalability and high operational costs,” the proposal explained. In contrast, Ethereum’s L2 offers lower overhead, broader liquidity access, and direct integration with existing DeFi and developer tooling.
The team also highlighted that Ethereum’s thriving L2 ecosystem, home to solutions such as Arbitrum, Optimism, and Base, presents the ideal environment for deploying TDX (Trusted Distributed Compute) and GPU-based confidential compute workloads, which are essential for scaling AI-driven applications.
From Polkadot Pioneer to Ethereum Builder
Phala was among the earliest Polkadot parachains, securing its slot in the network’s highly anticipated 2021 auctions. Its departure marks a rare instance of a project fully abandoning Polkadot rather than expanding multichain, unlike Astar Network and KILT Protocol, which maintained dual operations across both ecosystems.
The decision underscores the evolving competitive dynamics between blockchain platforms as projects increasingly prioritize scalability, liquidity, and enterprise adoption. “L2 is the natural home for Phala’s confidential compute workloads,” the proposal noted, pointing to early-stage commercial traction already visible on its Ethereum deployment.
PHA Token Outlook
At the time of writing, Phala (PHA) holds a market capitalization of $80.6 million, ranking as the 11th-largest AI-agent-related crypto asset and among the top 50 AI tokens globally, according to CoinGecko data.
As Phala transitions toward Ethereum, investors and developers alike will be watching closely to see if the migration can catalyze new growth in decentralized confidential AI — a niche increasingly at the intersection of blockchain, cloud computing, and artificial intelligence.