TLDR

2022 was a year of progress, innovation, and growth. Making it one of Phala Network’s most ambitious and successful years to date.

Stand out accomplishments include advancements in Phat Contract development, PhalaWorld’s Soulbound NFT launch and the completion of several phases of the Phala Network upgrade.

We’ve also made massive strides in partnerships, community, and our ecosystem.

In this end-of-year review, we bring you the highlights of our journey so far and the potential Phala has yet to explore.

• Increased decentralization

We launched our computation provider ecosystem and tokenomics, and both Phala and Khala removed Sudo. Moreover, the on-chain democracy governance is now mostly controlled by a diverse group of PHA holders and the Hashforest team now has less than 40% influence over it.

• A year of innovation

Our two game-changing products: Phat Contract and PhalaWorld are shaping the future of Web3. Phat Contract exhibits unprecedented composability and eliminates the traditional limitations of smart contracts. PhalaWorld realized the SBT (Soulbound Token) concept, as well as NFT customization.

• “But does it come in purple?” 

Phala expanded its utilities with SubBridge, the first cross-chain router in the Substrate ecosystem. SubBridge is an aggregator that addresses Substrate’s lack of Defi whilst bridging EVM to Substrate and Khala to other parachains.

• Consensus has become stronger

Phala was rebranded from a privacy provider to a computation provider. We expanded our reach even further from Polkadot & Kusama to EVM, and from Web3 to Web2.

Decentralization

Phala is controlled by the people

Phala operates on a decentralized and community-driven model. Therefore most decisions are made by the DAO rather than a central authority.   Khala and Phala share one council, council members execute the right to participate in Phala/Khala on-chain governance, and represent the community’s interests. The number of Khala Council seats also increased from 5 to 8 in September.

The council dealt with a significant amount of on-chain governance affairs, and approved numerous treasury proposals and tech upgrades. Phala’s council processed an impressive 154 motions this year, which is the most among Polkadot & Kusama!

Decentralized cloud computing at its finest

Phala’s decentralized cloud services have been running steadily for well over a year now. Two milestones were also achieved, 18k+ online servers which can provide 142k+ vCPUs and an increase in computation nodes, which now operate across 50+ different cities and countries.

After the Gemini upgrade, the number of servers increased by 264%, and the total delegation grew by 360%, exceeding 209 million PHA.

Innovation

1. Technical Innovation

The Phala team has always been tech-driven. Through hard work and dedication, we’ve got some exciting breakthroughs this year:

• Key hierarchy management: This makes Phala one of the most secure projects in the Web3 world

source: https://medium.com/initc3org/tee-based-smart-contracts-and-sealing-pitfalls-eccd5d751329

• Phat Contract + SideVM: introduced the innovation of off-chain computation Web3.

• Phat Contract UX Improvements: Including developer tools, documents, and the cross-chain interoperability solution Off-chain Rollup.

• Experimental JS support in Phat Contract.

As of the 25th of Dec, there were 1,434 commits and 408 PR submitted to GitHub. According to the statistics on Electric Capital’s analysis, Phala’s development activity has been extremely high during the past 2 years.

https://electric-capital.github.io/?p=/ecosystem/polkadot

Phala Network also successfully completed one of the largest and most complex on-chain upgrades of the year.

This was in addition to the launch of StakePool V2 and Vaults, which maximize the staking yield of users.

A colossal amount of data was upgraded during this process, 18,735 online workers were migrated as well as 20k+ delegation NFT generation.

Phat Contract

Phat Contract is an innovative and decentralized off-chain computation model that enables crypto projects to achieve true decentralization.

It is trustless since it inherits the self-enforcing nature of smart contracts. With its core feature of HTTP support, it can easily provide computation for any chain and smart contract with low latency and privacy.

Phat Contract, therefore, supports complex computation with low latency and cost. It makes the impossible dApps possible.

Phat Contract also introduced a user-friendly payment model “stake-to-compute”, via its new tokenomics. Phala Network offers a low-cost and high-performance computing cloud, despite high computing power being scarce and expensive. Users can stake PHA to obtain premium computing power and withdraw at any time if they decide to opt-out.

2. Pioneer for NFT & Metaverse

We’re innovating, not forking. PhalaWorld is a digital representation of a user’s progression on the Phala Network.

PhalaWorld utilizes a unique soulbound non-fungible token (NFT) system. With soulbound NFTs, players can possess unique items and characters that cannot be transferred. There are two parts to the soulbound NFT system: Spirit and Shell NFTs.

After users purchased their Shells, they entered Incubation, which allowed them to gain energy by completing different interactive tasks. Energy could then be used to unlock items and customize every aspect of your Shell during Dress Up. At the end of incubation, you could finalize all your item choices and see what your first Shell NFT will look like.

Utility

The 4 major applications are extremely important to the growth and success of Phala. We have more applications in the pipeline in the near future.

1. Phala App

Phala App is a multifunctional app hub for developing tools for the Phala ecosystem, such as SubBridge, Delegation, and Farm (previously ‘mining’). Phala’s community also utilizes Phala App as a wallet, as it supports Polkadot.js, Talisman, and SubWallet.

Phala App 2.0, launched on 22/12/2022, is an evolution of Phala App 1.0. Ideas for v2 upgrade came from users’ feedback and needs. It includes a brand-new UI design and 2 new features — StakePool v2 and Vault. The dashboard also displays users’ NFTs and assets, as well as the balance and total delegation of PHA.

2. Phat Contract

Phat Contract, Phala’s core product, completed its brand refresh during September.

Phat Contract’s Closed Beta was also launched during November and 10+ teams participated.

More releases in the short term:

• Open beta

• Official tokenomics

• A more user-friendly version

3. PhalaWorld

As the pioneer of “play to build”, PhalaWorld implemented the following features:

• Support for multiple types of NFT systems, including sellable and non-sellable NFTs such as Shell & Spirit;

• Decentralised identity(DID) with a visual link to on-chain and off-chain data;

• A unique incubation system that allows for dynamic user interaction through the feeding of their original NFTs;

• A leaderboard system;

• NFT customization.

PhalaWorld finished its Shell NFT sale and incubation in 2022, supporting NFT customization and a new way of playing by feeding each other energy points. 1,171 out of 1,511 went through the incubation process. 114,978 energy points generated, which is equivalent to 38,326 feed events. A total of 1,171 first-generation Survivors will enter PhalaWorld in the future to save the wasteland.

PhalaWorld will also launch its marketplace and enable Shell NFT trading in the near future.

The NFTs in PhalaWorld are based on the RMRK 2.0 standard pallet, which are composable. During Dress Up, each Shell NFT is composed of many slots(e.g. arms, legs etc.) After incubation, Survivors were able to unlock different equipment(items) for their Shells’ slots using the energy points they gained.

With the unlocked items, they can then customize how each part of their Shell looks, which is a super enjoyable and interactive experience. We’ve seen a very high participation rate for Dress Up because of this.

With this unique combination of PhalaWorld NFT and RMRK pallet, we believe we can easily extend such standards to make other parachain projects more interactive and fun.

4. SubBridge

SubBridge is the first cross-chain router in the Substrate ecosystem, using “XCM + ChainBridge cross-chain protocol” to implement cross-chain transmission of assets and information. It also bridges parachains with EVM and other chains. SubBridge enables the transfer among Phala, Khala, and Ethereum. Users only need to pay a few PHA as gas fee and can swap Phala’s assets ERC20-PHA, K-PHA, and PHA. There are 12 parachains that have opened HRMP channels with Khala/Phala at the moment.

Consensus

1. Community — we’re ₱hamily

Phala is building a global community with more than 23k+ Phamily members. Now we have 18 ambassadors from 11 countries, who are helping to build Phala and making us even stronger. Thanks to their help, Phala’s community made a great impact not only in the Dotsama ecosystem but also in the overall Web3 space. At the time of writing, we have received over 400 applications for new ambassador positions.

We have been working on a new ambassador program with different departments for ambassadors to participate in order to maximize their advantages. We will also introduce head ambassadors, an achievement system and a league table in 2023.

2. Globalization Impact Increasing

Global footprint

Phala’s global footprint has significantly expanded in 2022, with a total of 141 events held in 14 countries and 18 cities worldwide, reaching over 230,000 people and totaling over 620 hours of activity. 15 of these events were organized by the Phala community. We also participated in 10 hackathons and workshops, receiving 6 advanced submissions and 33 beginner submissions.

Growing social media presence

Phala saw significant growth and interaction on its social media platforms. Some highlights include:

• Followers from all continents, with a particularly growing base in the US and Europe;

• Over 3.2 million total Twitter impressions

• More than 39,000 mentions of Phala Network on Twitter

• Phala Network’s LinkedIn account’s engagement rate was up by 3000%

• 329 new topics and 644 new posts on Phala forum

Diversified partners, expanding global business cooperation.

Phala continued to expand its partnerships with outstanding organizations in various fields. For example, Phala joined the Polkadot alliance, and became a Corporate Gold Member of the Blender Developer Fund to provide Web3 rendering services for Metaverse.

These partnerships have greatly increased Phala’s global presence and influence.

Phala in 2023

For 2023, we will further improve our competitiveness, continue to expand the influence of the Phala brand, and we are inspired to become the top choice for Web3 application builders who build off-chain programs.

Key Goals & Milestones

🎯 Phat Contract Growth

1. Agile development for Phat Contract:
• Lower barrier for developers
• Improve the usability of Phat Contract.
• Support for various programming languages including JavaScript.
• Offer component for smart contract builders on EVM blockchains (such as Ethereum, Polygon, BNBchain…)

2. Achieve massive adoption for Phat Contract:
• Build closer relationships with Web3 application developers.
• Expand partnerships within the top Web3 ecosystem.
• Propose a Phala grant program to support innovation.

🎯 Increase decentralization of the whole network

1. Allow users to customize their own Phat Contract Cluster.

2. Reduce reliance on centralized services, such as by supporting more manufacturers like AMD.

🎯 Continue to evolve our brand to truly communicate the unique value of Phala

1. Launch a new website with new UI.

2. Develop a clear and straightforward slogan for Phala.

3. Clarify the position of Phat Contract within our brand.

4. Increase the global influence of the brand.

🎯 Build a more global, powerful, and active community

1. Continue to promote the growth of new ambassador (AMB) program.

2. Host more local events around the world.

3. Become well-known within top developer communities worldwide.