Phala Network, an AI-driven project originally launched as a Polkadot parachain, has voted to completely migrate to the Ethereum ecosystem. The move marks a strategic shift toward greater scalability, enterprise-grade security, and deeper integration with Ethereum’s liquidity and developer ecosystem.
Phala Community Approves Full Migration to Ethereum L2
The decision follows a community proposal that passed earlier this week, confirming that Phala will transition to an Ethereum Layer 2 (L2) network. In an official post on X, the Phala team announced, “Proposal Passed: Phala is Migrating to Ethereum L2!” The statement emphasized that the migration represents “the next chapter” for the project, highlighting its goal of providing confidential AI computation on a scalable foundation.
As part of the migration plan, all PHA tokenholders will receive new ERC-20 tokens at a 1:1 ratio. The process is scheduled to begin before November 20, 2025, ensuring that staking, governance, and rewards continue without disruption. Phala also confirmed that the new Ethereum-based L2 will maintain the same user experience, allowing existing participants to transition smoothly.
A Gradual Shift From Polkadot to Ethereum
While the move may appear sudden, Phala’s transition has been in progress for months. The project launched a fully operational Ethereum Layer 2 network in January 2025, enabling developers and enterprises to test and deploy AI-driven Web3 applications using confidential computation.
According to the migration proposal, Phala’s leadership believes consolidating operations on Ethereum will unlock stronger technical and economic opportunities. The proposal, submitted by community member and ecosystem success lead “doylegxd,” noted that maintaining a Polkadot parachain slot involved significant costs and limited scalability.
By contrast, operating as an Ethereum Layer 2 will provide lower overhead, easier access to Ethereum’s liquidity pools, and compatibility with existing Ethereum Virtual Machine (EVM) tools. The team stated that the move will “enable seamless integration with next-generation GPU and AI computation infrastructure.”
Why Phala Is Leaving Polkadot
Phala Network’s migration comes at a time when other Polkadot-based projects, such as Astar and KILT Protocol, are opting for multichain integrations instead of abandoning the Polkadot ecosystem entirely. However, Phala’s leadership explained that the decision to move exclusively to Ethereum was based on strategic and technical reasons.
The project cited three main motivations:
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Scalability and Performance: Renewing a Polkadot parachain slot would have locked Phala into an infrastructure that “offers limited scalability” and demands high maintenance costs. Ethereum L2 environments, by comparison, are optimized for large-scale throughput and cost efficiency.
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Integration with Ethereum’s Liquidity: Ethereum remains the largest hub for decentralized finance (DeFi) and institutional capital. Phala’s migration allows it to leverage this liquidity and establish stronger partnerships within Ethereum’s expanding ecosystem.
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Confidential AI and GPU Compute: Phala specializes in providing secure, privacy-focused computation for AI-integrated Web3 applications. The Ethereum L2 environment, according to the proposal, offers “the natural home” for deploying GPU-based confidential compute workloads and TDX (Trusted Distributed Execution) technology, which Phala believes will drive future enterprise adoption.
The Role of Symphony and Enterprise AI
Phala’s transition also aligns with its broader vision of powering “BitcoinFi”-style ecosystems with confidential AI infrastructure. Through its open-source initiatives and secure computation tools, Phala aims to serve as the backbone for enterprise-grade decentralized AI applications.
The project’s Ethereum L2 will provide developers and businesses with access to low-latency, privacy-preserving computational power. This will enable use cases such as AI model training, confidential data processing, and real-world asset tokenization — all with built-in security features.
The team’s confidence is bolstered by growing enterprise interest in decentralized compute networks. By integrating directly with Ethereum’s tooling, Phala expects to accelerate adoption of Web3 AI infrastructure across industries like finance, healthcare, and data analytics.
What Happens Next for PHA Holders
According to Phala’s roadmap, the migration process will begin in mid-November, starting with a 1:1 token conversion for PHA holders. Users will be able to exchange their old tokens for the new ERC-20 version through official channels.
All existing staking rewards, governance mechanisms, and smart contract functionalities will continue to operate as usual. Phala has assured that the migration will not affect token value or holder participation, emphasizing that the transition will be “smooth and non-disruptive.”
Once complete, Phala will officially discontinue its Polkadot parachain operations, marking one of the most significant ecosystem exits since the network’s inception.
A New Era for Confidential AI on Ethereum
Phala’s move represents more than just a technical migration — it’s a signal of shifting developer and enterprise confidence toward Ethereum’s expanding Layer 2 ecosystem. As confidential AI computation becomes a cornerstone of decentralized infrastructure, Phala’s early positioning could place it at the forefront of Web3 innovation.
By choosing Ethereum’s scalability, liquidity, and established security frameworks, Phala is betting that its next growth phase will come from bridging AI and blockchain in a unified, enterprise-ready environment.
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