Phala Network: Origin of Phala, How Does it Work?

Updated: 19 hours ago

Table of Contents:


Origin of Phala

How Does Phala work?

PHA, the native token of Phala Network



Cloud computing means you can access large data repositories from anywhere, and it is often used to provide computing resources, such as data storage and computing power, for end users. Phala Network is an open-source software project that aims to create a distributed cloud computing solution using excess capacity from everyday computers.

Phala aims to provide these services through a decentralized, global network of computers that can be used to perform large numbers of calculations at high speeds and with great accuracy.

Phala uses a combination of “worker nodes” to operate the network:

  • Gatekeeper nodes are blockchains that organize interactions between Phala network users and other blockchains, as well as maintain the blockchain state and consensus rules.

  • Miners are nodes that run a CPU network and rent their computer power to the network.

The Phala network supports two types of nodes, separating consensus and computation responsibilities across the network.

Origin of Phala

Phala, a company that provides cloud computing services, launched on the Kusama network in order to provide a cloud computing network on its platform. In July 2021, Phala secured the fourth parachain slot auction.

Phala Network Foundation has raised over $1.68 million in private token sales since 2019, with 15% of the initial token supply being distributed to investors. The project received three grants from the Web3 Foundation. The PHA crypto token launched as an Ethereum token in September 2020 and was listed on the Kusama exchange in 2021.

How Does Phala Work?

Phala is being built as a Polkadot parachain, which is a custom blockchain that connects to the main Polkadot blockchain. The Polkadot Relay Chain is responsible for ensuring the security and settlement of transactions, as well as consensus.

By integrating with the Polkadot Relay Chain, Phala can take advantage of the base features offered by Polkadot. Phala's parachain has the potential to connect with other parachains in the Polkadot ecosystem in a short time. Participants in the Phala network, who send requests as transactions and miners perform computations to ensure their validity and the integrity of the network.

To keep your data confidential, the miner node’s CPUs are run within a secured enclave called a Trusted Execution Environment (TEE). The owner of the mining machine cannot see or tamper with the encrypted data stored within the enclave of their computer as long as they do not have physical access to it.

PHA, the native token of Phala Network

The native token of the Phala Network is called PHA, and it has different functions. It rewards miners and gatekeepers for operating and securing the network. The total supply is 1 billion tokens. The PHA token's departure was made through a private token sale at a price of $0.01, which was allocated 15% of the total supply (150 million PHA tokens). No ICOs or other sales took place beyond that.

Additionally, the Phala developers released their tokens following these distribution guidelines:

  • 50 million of the total tokens are distributed to developers as a reward for their work on the protocol (5% of all tokens).

  • 9% of the total tokens were distributed to those who signed up for the airdrop.

  • A reward of 10 million PHAs was distributed to all network testers as a thank-you for their help and feedback in development.

  • 30% of tokens have been distributed, leaving 70% for the reward system of the miners (with a total of 700 million PHA).


Phala network is a network that focuses on offering advanced private computing services that are supported by smart contracts deployed in Polkadot’s parachains. Phala network is a project that is still very new and has promising possibilities due to its commitment to private smart contracts. It has a great impact on companies and services that focus on security and regulations. This makes the project interesting for both users and business services that are concerned about privacy.

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