State of Phala Network Q3 2024

2024-10-23 15:23:00 Reading

From messari by Qorban Ferrell

Key Insights

Phala conducted the first-ever benchmark study on Nvidia's TEE-enabled H100 GPUs. The study revealed minimal performance impact — less than 7% for typical AI tasks — and excellent scalability for larger models.
Phala processed over 66 million contract executions in Q3 — a 3% decrease from the previous quarter.
Monthly active users (MAUs) dipped 5% QoQ. MAUs peaked in March 2024, when Phala contracts logged 774 unique users.
Total Phala supply-side network participants (workers) expanded by 8% in Q3 2024. This growth kicked off after the Phala blockchain went live in April 2023.
Phala partnered with multiple AI-focused protocols to drive the usage of AI agent contracts: Hyperbolic AI, Morpheus, Lumerin, Allora, Artela, Aligned Layer, Theoriq, and io.net.

Primer

Phala Network (PHA) is an AI coprocessor that enables smart contracts to control and interact with AI Agents. It uses a blockchain-TEE (trusted execution environment) hybrid design to incorporate offchain elements — such as artificial intelligence (AI) — into blockchain-focused applications. This design creates the foundation for onchain smart contracts to control AI agents (run by offchain worker nodes) while maintaining security and user privacy. Phala consists of four core components:

Decentralized Cloud Computing Network: Phala is a backend host of scalable blockchain technology and a trusted execution environment (TEE) to ensure the verifiability and security of compute execution.
TEE (SGX) Framework: The core Intel TEE architecture scheme that ensures secure and verifiable code execution within an isolated hardware-protected area of a computer’s processor.
AI Agent Contracts: AI computing programs that enable EVM smart contracts to extend their capabilities offchain.
Blockchain/Phala Nodes: Attested secure worker nodes that retrieve and execute transactions offchain. These nodes then use the blockchain to organize the decentralized network and incentivize workers.

In 2020, Phala secured a funding round at a $10 million valuation with participation from Candaq Group, InfiChain, Blue Mountain Labs, Incuba Alpha Group, and Exoplanet Capital. Its product was developed to offer AI-enabled, Turing-complete smart contracts, aiming to address the challenges posed by AI and centralized cloud computing. Following this momentum, Phala won a Polkadot parachain slot auction with 1,685 contributors in March 2022. As of Q3 2024, Phala is an AI coprocessor that provides a secure and verifiable compute solution for integrating crypto and AI at the application layer. For a full primer on Phala, refer to our Initiation of Coverage report.

Disclaimer: This specification is preliminary and is subject to change at any time without notice. ABC News assumes no responsibility for any errors contained herein.