Parachain Polkadot Phala votes to fully transition to Ethereum L2

The Phala parachain network of Polkadot will transition to become a Layer 2 on Ethereum after the community approves the proposal to expand computing capacity for enterprise customers. According to the announcement, Phala token holders (PHA) will receive a new ERC-20 version at a 1:1 ratio, with the conversion process starting before November 20. Staking, rewards, and governance activities will continue seamlessly on the new platform.

Phala, a decentralized cloud computing network supporting AI, stated that transitioning to Ethereum would enhance scalability, security, and leverage a more robust EVM ecosystem. This proposal was submitted on September 27, arguing that maintaining a parachain on Polkadot would hinder development and consume many resources. Currently, the PHALA token has a market capitalization of approximately 80.6 million USD, ranking among the top 50 largest AI-related cryptocurrencies, according to data from CoinGecko.