In late January 2021, CoinTiger and a number of Polkadot ecosystem project parties jointly launched the CoinTiger Polkadot monthly AMA event. In the second issue, Celia, head of the CoinTiger market, talked with Tong Lins from the PHA (Phala Network) project party, sharing content about Phala Network, and discussing hot topics related to the Polkadot ecosystem.

The following is a review of the activities of this AMA

Celia：

Welcome to the second issue of CoinTiger Polkadot~ I am Celia, the market leader of CoinTiger.

Tong Lin:

Tong Lin:

Hello everyone, I am Tong Lin, the founder of Phala Network. I used to be the person in charge of the million-level user product line, and worked as a senior product manager at Tencent & Didi. I have accumulated some small experience in strategy design, data-driven, and business model design. Later, I started to study smart contracts in my spare time, and tried to make some tools on EOS. Later, I came out with a few old friends to do blockchain + privacy computing, which is now Phala. We have been developing on Substrate since the beginning of 2019, and we also belong to the relatively early Polkadot ecological development team

Celia：

Tong Lin:

Tong Lin:

Phala Network is a private computing parachain on Polkadot. We hope that based on TEE-pow's blockchain economic design, we can release the privacy computing power in the CPU and apply it to Polkadot parachains, Defi, data services and other applications. Phala-based applications pLibra and Web3 Analytics have received grants from the web3 foundation.

We hope to expand the concept of "privacy protection" into "confidentiality protection". Privacy not only refers to the transaction privacy of users, but also protects any confidential data in smart contracts from being leaked. In the current smart contract technology, all data must be fully disclosed, and we hope that the "Confidential Smart Contract" (Confidential Smart Contract) can perform general-purpose calculations like Ethereum's Turing-complete smart contract, but without exposing confidential data .

Celia：

Tong Lin:

Tong Lin:

As mentioned earlier, Phala is a Substrate-based TEE-blockchain hybrid architecture protocol. All current TEE protocols cannot realize mutual calls between confidential smart contracts, that is, composability. We all know that composability is a major premise for the existence of the DeFi ecosystem on Ethereum, and Phala has achieved composability between contracts and even cross-chains through innovative design.

Phala is not Byzantine. Our de-trust is guaranteed by trusted hardware, but hardware alone cannot solve two problems: availability and state consistency. Standalone hardware cannot provide services when the power is unplugged, which just does not meet availability. Multiple trusted computing nodes need to interact, and the order of code execution is unclear, which will lead to double spending, which does not satisfy state consistency.

Therefore, we need to solve these two problems with the help of blockchain. The state data is encrypted and stored on the chain, and anyone can download it without permission. Under the consensus algorithm, each node can get a consistent state.

In addition to data confidentiality capabilities, we have two other advantages.

The first is contract-level parallelism. Because it is non-Byzantine, we don’t need to go through each node’s consensus once to achieve trustless, so we can achieve extremely high performance.

The second is to inherently support cross-chain. Phala's contracts are executed in parallel and need to cooperate with the interoperability protocol between smart contracts to realize mutual calls. This interoperability protocol can not only be used between contracts, but also compatible with various cross-chain methods (transfer bridge on Phala, ICMP protocol on Polkadot, etc.).

Therefore, it can be concluded that Phala includes a main chain and a network of trusted hardware miners, and will strive to become a parachain of Polkadot in the future. Contracts are executed in parallel on trusted nodes, and developers deploy bridges and Dapps on the network in the form of contracts. Among them, the main chain provides cross-contract and cross-chain calls, miners provide computing power, and the transfer bridge realizes communication with external blockchains.

You may think it is too technical? To put it simply, we believe that the era of public chains has passed, and you have to provide services to everyone, and the way to provide services is to do it through composition. On the one hand, our own design is compatible with full composability of privacy services. On the other hand, we are born based on Substrate development, so we can easily provide services to other parachains through Polkadot.

Celia：

Tong Lin:

Tong Lin:

Due to the characteristics of Phala, our network structure is somewhat similar to that of Polkadot, but the focus is very different.

First, Polkadot solves cross-chain communication, while Phala pays more attention to the interoperability between parallel contracts. For example, our main chain is responsible for inter-contract communication, and Polkadot’s relay chain is responsible for cross-chain communication.

Second, Polkadot’s parachains are heterogeneously Byzantine, while Phala’s trusted nodes are homogeneous and non-Byzantine, so Polkadot’s challenge is cross-chain security, and we rely on the security provided by Polkadot to achieve more complex business logic.

Celia：

Tong Lin:

Tong Lin:

Good question! A great feature of the Polkadot ecosystem is that project parties complement each other rather than compete.

Phala has its own business vision, which is to replace a better data system for the web2.0 world, which requires:

• Phala's own privacy protocol and computing power;

• It needs to be used by developers of other public chains such as Ethereum, Libra, and EOS. This step requires the implementation of Ethereum Bridge, Libra Bridge (we made it ourselves), EOS Bridge (Bifrost Rainbow Bridge), and native smart contract chains, such as Darwin, Plasm, Edgeware;

• Data storage is required. Filecoin bridge, or other third-party data protocol (Crust team);

• In order to use a third-party protocol, you also need to pay money, which requires stable coins and Defi facilities (Acala).

So it can be seen that any business needs the help of other businesses, which is why Polkadot can be realized but other chains cannot. Why Phala has been sparing no effort to engage in activities and cooperation with other projects, because if you want to succeed, you can't rely on yourself.

For example, suppose you want to develop a DeFi contract with privacy function, then I would suggest you:

• Use Moonbeam/Acala as the main chain;

• Call the protocol of Bifrost/Stafi;

• Create a privacy function with a Phala privacy contract.

This can not only achieve application innovation, but also save costs, as well as other ecologically irreplaceable composability.

In fact, in December last year, we announced the first cross-chain demo jointly developed with Acala. The demo shows that users can transfer Defi assets from Acala to Phala's privacy wallet through XCM, and users can also migrate assets from the Phala network to Acala in a private environment.

I believe that with the official completion of the card slot auction in the future, there will be more possibilities for cooperation between Phala and other project parties, and the value of PHA will be further enhanced.

Celia：

Tong Lin:

Tong Lin:

Privacy protection is a gradual development process. Starting from the legislative and compliance level, if we have more advanced technical means, these technical means will lead to a less frictional, more efficient and more thorough privacy protection solution.

I think there are four directions of "freedom" that need to be addressed:

- financial privacy rights;

- data privacy rights;

- Speech privacy rights;

- The right not to be monitored in the physical world.

Orchid can solve the fourth, Demention's goal is 3,4, and Phala's goal is 1,2. We focus on data privacy rights.

In the era of big data, we have seen the explosive growth of data, but the preservation of data depends purely on the credit of large companies. The reason behind this is because the data is too easy to be copied, and the user cannot keep it properly.

Therefore, we can see some of the following phenomena:

• As you register more and more accounts, we find that our ID numbers, phone numbers, and QQ numbers are frequently appearing in harassing calls and telecom fraud;

• With the growth of artificial intelligence capabilities, we found that our face pictures have entered the databases of many companies for machine learning, but these data can also be used as "broilers" for unlocking and identity verification;

• What all Internet companies are using that do not belong to the above crimes: it is to use your data to study your portrait and behavior habits, so that they know how to make money better.

This is a case from the perspective of personal privacy, and there are also large business scenarios where company and enterprise secrets are not well protected due to business data transfer, so I will not share too much here.

Some people will say: If you pay, you will be rewarded. If I don’t hand in the data, how can he give me better service?

If such technology does not exist in the world, then this is an ethical issue; if such technology exists in the world, then this is not a problem, but a demand: such a demand happens to be what the Phala protocol is best at solving, that is, it involves Scenarios for sensitive data exchange and calculation.

In fact, the laws of various countries have begun to improve the privacy protection of citizens on a large scale, and blockchain technology can provide protection for trustlessness. Therefore, I think this is not a problem, but an opportunity!

Celia：

Tong Lin:

Tong Lin:

The product is completely open source and every part is verifiable. There is no other way.

Don’t trust, verify.

Celia：

Tong Lin:

Tong Lin:

I'd like to break down the progress Phala has made over the past six months in three parts.

• Ecology and Community

Phala-based application Web3 Analytics, won the second grant from Web 3 Foundation.

A decentralized dark pool for Phala-based applications was sponsored by Kusama, and we also had a massive Kusama airdrop.

Received $10 million strategic investment from IOSG, Candaq, SNZ and other funds

First listed on the exchange in September (Huobi)

The number of global communities exceeded 30,000

testnet

develop

testnet

POC-2 testnet launch (complete): over 19,000 on-chain transactions, over 1,000 miner nodes, covering over 90 cities in 30 countries, and growing French, Spanish, Vietnamese, and Bengali-speaking communities.

Launch of the POC-3 test network (first phase completed): By the end of the event, the Vendetta test network has exceeded 1 million transactions, with an average daily active account of 9,300+, 1,300+ miner nodes, and a computing power of more than 440,000.

• product progress

We have successively launched dark wallets, completed the development of W3A confidential smart contracts, and completed the light verification of parachain nodes.

In addition, in December, the first cross-chain demo based on the Rococo V0 version was jointly released with Acala. You can see the content of this official account for details:

• Brands and Events

Sponsored five developer events, Polkadot Hello World! Hackathon, Decoded×Polkadot Hackathon, Substrate Wuhan Workshop, Substrate hackathon by Dorahacks, and Rust China 2020.

Attended more than 100 forum seminars, roundtables and AMAs.

Reached strategic cooperation with American listed companies Professional Diversity Network, Inc. (Nasdaq: IPDN), Bondly, Maskbook, Plasm Network, Reef Finance, Bluzelle and other projects.

Join the Linux Foundation and the Confidential Computing Consortium.

Won the Most Innovative Technology Award of Jinse Finance in 2020.

Complete the brand upgrade.

Published more than 100 articles on platforms at home and abroad, with more than 2 million words and nearly 300,000 exposures.

Celia：

PHA has also been launched on CoinTiger, and you can find the PHA/USDT trading pair in the DeFi zone~

Tong Lin:

Tong Lin:

There is a lot of work to do this year, specifically, we will gradually achieve:

-Join the Rococo testnet, start the Lira bridge, and prepare for the mainnet launch;

- Participate in Kusama and Polkadot auctions;

-Start the parachain main network;

- Run WASM in Phala TEE;

- On-line confidential smart contracts and Web3 Analytics, and realize the decentralized governance of the community;

-Create tools for TEE miners, and cooperate with 5 mining pools to allow at least 10,000 TEE miners to connect to Phala;

- Launch dark pools on Kusama;

- 50 active developers;

-The privacy cloud platform is online.

Celia：

Tong Lin:

Tong Lin:

I personally think that PLO may become a breaking point for Polkadot to really become the focus of the market, because this is an event with a scale of 4 billion US dollars and an annualized rate of 20%.

How do you calculate it? The market value of DOT is now nearly 20 billion U.S. dollars. Assuming that 20% of DOT participates in the card slot auction, 4 billion U.S. dollars of DOT will come in

You may think that the TVL is too high when you see it. At present, the preparations for Phala are very comprehensive:

First, Phala Network's pre-mainnet and mainnet will participate in the Kusama & Polkadot slot auction. This is a huge expense! It is also a big challenge for the project. We have full confidence in our business capabilities, financial strength, market management and auction strategies. Of course, it is also inseparable from the Polkadot community's support and recognition of Phala.

Also, if we win the slot, a portion of PHA will be distributed to investors who supported the Phala auction as a reward. We believe that Phala will be able to successfully bid for the slot.

Celia：

Thank you very much Tong Lin for sharing, so that everyone can have a better understanding of Phala, and have greater expectations for the development of PHA~ Next, we will enter the audience Q&A stage, and you must seize the opportunity to directly talk about Phala.

User Q&A:

Tong Lin:

Tong Lin:

soul problem. So our idea on this issue is decided by the PHA holders. The protocol provided by Phala is not a specific confidentiality method. We abstracted a layer: such as private transfer, which is a deployment method of the contract on Phala, and the deployer is the first third-party developers. But whether this contract is evil or needs to be banned, we have no right to judge, it should be left to the community to vote

Tong Lin:

Tong Lin:

wallet:

wallet:https://app.phala.network/en/wallet

browser:https://phala.subscan.io/

Tong Lin:

Tong Lin:

Now there are a variety of privacy protection technologies, each of which can achieve different levels of protection. We often divide privacy protection technologies into three generations:

Typical representatives of the first-generation technology are Zcash and Monero. They realize the privacy protection of transactions through technologies such as zero-knowledge proof, ring signature, and confidential transfer. A prominent feature is that their technology can protect the transaction privacy of native coins.

A typical representative of the second-generation technology is Aztec, a privacy protocol on Ethereum, which uses a technology similar to Zcash to achieve transaction privacy for any ERC20 token. The second-generation technology is an extension of the first generation, but they can only achieve transaction privacy, and there is nothing they can do when it comes to Turing-complete smart contracts.

In the third generation of technology, we hope to expand the concept of "privacy protection" into "confidentiality protection". Privacy not only refers to the transaction privacy of users, but also protects any confidential data in smart contracts from being leaked. In the current smart contract technology, all data must be fully disclosed, and we hope that the "Confidential Smart Contract" (Confidential Smart Contract) can perform general-purpose calculations like Ethereum's Turing-complete smart contract, but without exposing confidential data .

At present, confidential smart contract technology can be realized through multi-party computation (MPC) and trusted execution environment (TEE). The former is based on pure cryptography technologies such as homomorphic encryption and zero-knowledge proof. It does not depend on hardware and can be efficiently applied in some specific fields, such as verifiable random numbers and distributed key generation. A million times performance loss. The latter is based on trusted computing hardware (mainly Intel's CPUs), but already enables very efficient general-purpose computing. Phala.Network has chosen the trusted computing solution and is committed to implementing universal Turing-complete smart contracts that protect confidential data.

Tong Lin:

Tong Lin:

The technology of Ethereum, whether it is architecture design or Solidity language, is designed by Gavin Wood himself. Ethereum 2.0 and Polkadot are technically comparable, but Polkadot has a first-mover advantage over Ethereum 2.0

Ethereum Defi must use Layer 2 when it comes to acceleration, privacy, and cross-chain. Such as RenBTC, Loopring Protocol, etc. However, the current layer2 solution is poor in sharing (for example, the original contract is not compatible with the analysis of A protocol but wants to call the contract of A protocol), security confirmation time and other issues will greatly affect the upper limit of Defi

The infrastructure is immature. For example, Zeus Capital borrowed tens of millions of dollars from AAVE for Link positions. This matter is directly exposed on the chain, which is actually very risky. The results also tell us: in the case of imperfect privacy facilities, position exposure will lead to no big funds dare to use leveraged derivatives on a large scale. But Polkadot is different. Polkadot has Phala protection, which can provide various privacy facilities for Acala and Stafi. Polkadot's parachain mechanism can support highly customized Defi strategies and logic, plus BTC, ETH bridges, etc., the actual ceiling is unlimited.

Tong Lin:

Tong Lin:

Won't. The market votes with its feet, so don't decide where to spend your precious money directly based on the news that is flying all over the sky.

You need to judge carefully, for example, it is said that the news about DOT unlocked by private placement, in fact, if you go to the chain to see it, it has been unlocked 5 days ago. . . On the contrary, the market has risen sharply, which shows that some people are deliberately taking a bad turn.

Tong Lin:

Tong Lin:

The next opportunity for Polkadot is the slot auction. The slot auction model is relatively easy to understand:

• The user provides DOT for lease to the parachain, and the parachain takes the slot as feedback with native currency

• Parachains cannot use assets directly, but can only use parachain slots to do good work

• After the lease period ends, DOT/KSM is returned to ordinary users

Therefore, unlike the IXO and EOS node elections in the past 17 years, the project party can only get card slot resources, instead of directly taking everyone's money and node votes to make profits. The only way for the project to make a profit is to use the card slot to develop something fun

Tong Lin:

Tong Lin:

It's a very mysterious concept, yes. This concept was proposed by Gavin Wood in 2014, when he was still the CTO of Ethereum.

In short, it is a fairer and more reasonable network than it is now: the infrastructure is controlled by the United States, the application layer becomes a devil unicorn kidnapping user data, and the FBI monitors it at any time, which is not what it is now. The vision of Polkadot is web3.0, we are all younger brothers, go to fight together to realize this point.

Thanks to Tong Lin from Phala Network for his in-depth interpretation! Every question was answered carefully and seriously, which brought us a lot of dry goods sharing and opinion output. We are also very much looking forward to PHA being able to compete for slots, and looking forward to the growth and value of Phala Network in 2021.

This event was successfully completed, let us look forward to the next Polkadot project to share relevant hot news with us. ****For more information about the event, please add "cointiger004" and reply to "Poca" to enter the relevant community.