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Introduction

Phala Network is a light, powerful, and secure TEE-based confidential smart contract, dedicating itself to be a novel privacy computing cloud and provide privacy computing and services for all users and companies. Phala Network will be a parachain on Polkadot and a solution to the next-generation privacy protection. Member of the Confidential Computing Consortium (CCC). Recipient of 2 Web3 Foundation Grants.

Vision

Build a Trustless World

Summary

• Phala Network TEE-blockchain solution can be quickly commercialized
• Web3 Analytics will come soon based on Phala Network.
• Phala Network would be the very earlist parachain on Polkadot. Since it's been Web3 Foundation Grant Program & Substrate Builders' Program.
• Jointly with Fudan University System Software and Security Lab

Why do we do this ?

Blockchain's openness, transparency, and tamperproof characteristics become the technical foundation of digital currencies and smart contracts more honest than the original society. However, it is precisely because of these characteristics that they need to be fully open and fully on-chain, which hinders their further development. For example, the following data cannot be on-chain:

• Trade secrets：Finance, medical, credit reporting, supply chain
• Strategy：Trading, online games
• Personal privacy information

The blockchain industry needs to complete the last three building block：

• Expand trust coverage by building a trusted environment
• Run general purpose smart contracts that preserve confidentiality
• Ability to perform trusted joint computing on off-chain data

What do we want to solve ?

Privacy and trust issues in permissionless and consortium blockchains:

1. On permissionless chains such as Ethereum, all transactions and computation data is completely public, and it cannot handle business data and user privacy that needs to be kept secret, which greatly limits the application of permissionless chains

2. Consortium chains are better in data confidentiality. The data is only shared within the alliance, and data access rights can be set for users outside the alliance. But since data can be copied, trust issues remain:

   • Members of the Alliance may knowingly or unintentionally disclose;
   • When members do not want to fully share data, they still need to introduce trusted third parties to execute business logic

In order to solve the above deficiencies, we have introduced trusted computing technology, combined with the hardware trusted execution environment (TEE) to provide a reliable and efficient data confidential computing layer for permissonless and consortium chains.

About the technology we use

Phala Network implements Confidential Smart Contract with a TEE-Blockchain Hybrid Architecture.

Confidential smart contracts run in a special enclave inside the CPU. Contract execution is completely isolated from the outside world, which guarantees the confidentiality. At the same time, by combining blockchain, it solves the problems of functionality, security, and ease of use of TEE. It makes TEE truly usable. More specifically:

• Introduce Layered Design and Event Sourcing. Allow contracts to interoperate with other contracts and even external blockchains
• The layered design guarantees security. The miner's downtime will not affect the network
• Anyone with an Intel CPU can become a miner. The blockchain is responsible for verifying each execution of the miner. Users can safely use confidentiality contracts without any special hardware

Moreover, Phala Network is based on Substrate. It provides cross-chain confidential contract support. Eventually all the blockchains can share Phala infrastructure, which dilutes computing power costs。

Why Now?

It's time to run this on blockchain

• In the Web 2.0 world, the market does not have high demand to be "trustless". Data protection technology is mainly used in the DRM field.
• Bitcoin was born in 2009. Since then, the world has gradually lost trust in large Internet companies like Facebook. The concept of Web 3.0 has been proposed, blockchain has been used to solve trust issues, and the market has gradually developed
• The existing blockchains cannot achieve data confidentiality, which greatly limits the application scenarios.

Data privacy technology is ready

• Zero-knowledge proof, homomorphic encryption / multi-party computing has a long history, but not practical
• Intel SGX TEE was launched in 2016. After 3 years of development, it has gradually become popular. The hardware and ecosystem are maturing

TEE still has limited security and application scenarios when use it alone, but the blockchain and TEE is perfectly match with each other.

Products

Infrastructure

Phala Network is a Polkadot parachain based on Substrate. After launch, it will be added to the Web3.0 technology stack, becoming an off-chain trusted computing infrastructure that can be used by any developer

Layer2 serving any blockchain

Permissionless Chain

Customize off-chain computation Layer2 for existing chains so that the chain's smart contracts can interoperate with Phala's confidential smart contracts. The first batch of the custom components include:

• pETH: An important infrastructure that offers confidentiality of trading positions and strategy for DeFi
• pEOS, pTRON：Provide confidential smart contract capabilities for DAPPs with high performance requirements, so that PvP games can be implemented on the blockchain
• pLIBRA: As Libra will become a semi-permissioned blockchain, our customized Layer2 that can protect confidentiality will attract billions of transactions and millions of dollars in revenue from Libra

Consortium Chains

As a supplier of the consortium chains, we can provide technical solutions:

• Provide the ability of confidential smart contract to the consortium chains
• Provide a trusted intermediary to calculate corporate confidential data jointly on-chain

Web3 Analytics

With the power of Phala Network confidential contract, we found it possible to create a purely decentralized Google Analytics alternative – Web3 Analytics – to provide web performance measurement, customized statistics, and data visualization dashboard, in a decentralized way.

Web3 Analytics is a decentralized Google Analytics alternative aiming to give users the full control of their data. It provides web performance measurement, customized statistics, and data visualization dashboard. With the power of TEE, users' personal data are kept secretly and can only be used in an approved way. As a result, users literally get the 100% control of their data.

The Problem

We are going to build a decentralized off-chain data management and statistics tool to solve the following problems:

• Web3 developers have no choice but to trust big internet companies and use online statistics tools like Google Analytics. (More than 70% of the websites are using Google Analytics)
• However in such centralized solutions, the big companies control all the users data. Users have no way to download or delete their data, neither decide how the data is used by others.
• Finally, users and developers cannot profit from the additional value created by their data.

How to Protect Personal Data?

• In Web3 Analytics SDK, the user data is end-to-end encrypted. The encrypted data is stored in a decentralized storage network.
• Only the user and the confidential smart contract has the access of the encryption key. Therefore users can manage the data, the access permission of the data, and can also delete the data on their own. The confidential contract only analyze the data in ways authorized by the user in a TEE enclave.
• Authorized confidential contract can analyze the encrypted user data and output the analysis results. The results are displayed on W3A data visualization dashboard.
• All the analysis requests are logged on the blockchain. When the analysis is a part of the data trading, the value of the deal is recorded transparently on the blockchain, and the profit of the deal can be distributed to the data owners in a transparent way.Details are discussed in the next section.

what is the business model for Web3 Analytics?

Data is hard to trade because it's too easy to copy. Aiming at the trsut issues of data exchange between Internet companies, we have designed a universal data exchange market.

With confidential smart contracts, merchants can sell data utilization rights while retaining the ownership. Participants do not have to expose the original data, but also can complete the joint computation and analysis of the data, which protects the interests of all parties to the transaction.

• Demo is ready
• Security Federation Computing Service for Enterprise Alliance
• Public Web3 Data Marketplace

About the Future

• Data quality ratings and trust propogation protocol in the data market
• Provide TEE-based password and sensitive information management tools for DID services
• Provide trading data and strategy confidential-preserving technologies for high-performance DEX (Decentralized Exchange) or DeFi projects
• Provides trusted environment DRM support for blockchain content projects
• DAPP games that support PvP gameplay
• Non-transparent financial services such as sealed-bid auctions

Competitor

Different kinds of Confidential computing technologies

TEE Blockchain Solution

Technical characteristics

Notes:

• Status <1>：Stateless contracts are only suitable for one-time execution of computing tasks. Since they cannot associate multiple executions before and after, they are not suitable for general purpose smart contracts. Typical contracts are stateful: ERC20 token balance, DEX position data, DID identity information, etc. Stateful contracts are used in various situation.
• Availability<2>：Means that the execution of the contract is automatic and mandatory, and will not be stalled by the malicious actions of any party (such as not providing the data required by the contract). Availability is one of the basic security guarantees of blockchains such as Ethereum.
• Cross-contract interoperability<3>：Refers to the invocation and combination between contracts. For reference, 80% of the top 10 contracts on Ethereum use invocation and combinations of contracts. In DeFi projects, the combination of multiple ERC20 tokens is the most common usage of smart contract.

Product Features

Notes：

• Build complex applications<1>：Complex applications are applications that use any or more than one of the following services
  • Interoperability between more than one contract
  • Joint computation of confidential data
  • Contract cross-chain interoperability

Business Model

Fiat Money revenue

BaaS Service

• The revenue from technical services for the consortium chains
• The revenue from blockchain SaaS service

Platform service

• Sell trusted computing power
• The revenue from Web3 Data Marketplace

Token

1. Phala Token is the intermediary of confidential contract transaction fee in each chain:
   • Confidential Smart Contract gas fee
   • pLIBRA transaction Fees
   • Other trusted computing contract's transaction fees
2. Gatekeeper staking and rewards
3. TEE computing power incentive

Financing

Token Financing Round

Financing Usage

Token ecosystem

Token name

Phala

Total tokens

1B

Core roles

Additional rules

• Initial inflation rate 5%: Subsidies are halved each year，until 0
• Final inflation rate: 3.25%

Destruction rules

The transaction fee needs to burn Phala. 65% of the fee goes to the miner. 15% goes to the gatekeeper. 20% is destroyed.

Locked release rules(BETA)

Who we are

Co-founder& CEO：Marvin Tong

• Rich experience in product strategy, product operation, and management.
• Former Product Manager at Tencent, leading design of Tencent Dingdang and Tencent Auto Intelligence, achieving cooperation with Mercedes Benz, Guangzhou Automobile, Changan and other automotive companies.
• Former Senior Product Manager at Didi, leading million-users-level trading strategy design with profound experience in strategy design, data-driven decision and business model design.
• Co-founder of EOSnameSwap
• M.S., Data Mining, Communication University of China.

Co-founder& Chief Scientist:Hang Yin

• Former Senior Software Engineer at Google, leading projects of Mandarin recognition, Mandarin voice search, and Gmail intelligent semantic assistant, with profound experience and accumulation in artificial intelligence;
• Founder and Chief Developer of Bitcoin Gold;
• B.S., Computer Science and Technology, Fudan University (enrolled through Early Decision).

Co-founder：Zhe Wang

• COO of Bitcoin Gold China;
• CEO of Xiaohei AI Games, raising over 10 million RMB at Angel round;
• Former CEO at Miooc;
• Former CTO of Haha AI Vending Machine, raising over 50 million RMB for 4 rounds;
• Profound experience in the structuring, design, mass production of hardware and supplier matching;
• M.S., Computer Science and Technology, Huazhong University of Science and Technology.

Scientific research director：Shunfan Zhou

• PhD, System Software and Security Lab, Fudan University，whose research area covers binary vulnerability mining, blockchain security research, etc.。
• Studied with the chief scientist of the National 973 Project、Director of China Cyberspace Security Association ProfessorYangMin，China's youngest group of mobile security and blockchain security experts
• Published several safety related papers in top journals，《Identifying User-Input Privacy in Mobile Applications at a Large Scale》Indexed by IEEE。USENIX Security Symposium 2015 Lecturer, Published a paper on mobile security《 UIPicker : User-Input Privacy Identification in Mobile Applications》。
• Participated in National 973 Project“Basic theory and key technologies of mobile application malicious behavior detection and control”、National Natural Science Foundation of China“Vulnerability analysis and countermeasures for mobile networks and terminal equipment”a number of national key issues and national issues. 9th in the BCFT2018 Global Finals, the world's top security competition

Research Director：Jun Jiang

• Former CTO, Chief Developer at KnewOne;
• Former Software Architect at DJI, responsible for establishing internal risk control system and team building;
• Influential in Chinese Tech Communities as Head of Ruby China, incharge of RubyConf which has successfully held for 9 sessions with over 5,000+ people attended; holding geek events like RailGirls, Rubyists BEijing which once attracted lots of famous Chinese blockchain KOLs such as @xiaolai.

Senior engineer：Xiaoxuan Tang

• Co-founder and CTO at Liwushuo Online Gift E-business Platform with team building and management experience on 10-million-user product; raising nearly 100 million RMB at C round.
• Chief Developer in 3 more Chinese 10-million-user games and products; one of the first generation of Cocos2d-x contributors;
• Invited Speaker at Apple SWIFT 2017 & 2018;
• B.S., Software Engineering, Zhongshan University (enrolled through Early Decision).

Community & Growth：Antonia Yang

• 3-year experience in community building and event holding;
• Former Community Operation, CryptoGeek Tech Community;
• Assistant Interpreter of Translators Association of China;
• B.A., Language and Translation, Zhejiang University (enrolled through Early Decision).

Milestone

Source

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