Phala Token Economy Whitepaper Refined with More Details about TEE Mining

To better present Phala Token economy to the community and to the public, Phala team made several improvements before the listing on Huobi. In the latest version, we clarify the staking requirement of TEE miners and enhance the mining mechanism where miners will gain more PHA return.

Here are the main adjustments:

- Simplified the mining mechanism, reduced the number of roles participating in mining, and TEE miners will gain more returns.

- Mining rewards will be distributed by 2 types of tasks: ① being online and ② to completed computing tasks.

- Clarified how much PHA a miner will need before mining.

- Adjusted the unlock quota of private sale and team incentive after circulation started.

1. PHA Distribution Adjustment

• Deleted Data Owner / Data User in the original Matrix Mining system and all mining rewards will be reserved to TEE miners.
• The original airdrop plan about other ecosystems (ETH/FIL) has been adjusted to be Polkadot-related only, which means you will be able to obtain PHA as long as you hold KSM/DOT. Wave I KSM Stakedrop has ended in August 2020 though, Phala will hold the second round of airdrop on Polkadot parachain slots auction, giving away AN IMMENSE AMOUNT of PHA. :)
• PHA of private sale will be unlocked 60% (90,000,000) after circulation starts; the rest will be unlocked in the 7th month and 13th month after listing.
• PHA of team incentive will be unlocked 20% (10,000,000) after circulation starts; the rest will be unlocked in 16 times which means 5% (2,500,00) each month.

2. TEE Mining

2.1 Adjustment of TEE Mining Reward

In the new mechanism, the reward system consists of 3 parts and the role of participating in mining was reduced into TEE miners and Ecosystem Builders.

In each Epoch, PHA rewards will be distributed simultaneously in 2 queues:

1. Reward of TEE Miners: continuously computed as long as the mining device is online.
2. Reward of Ecosystem Development: continuously computed for ecosystem developers.
3. Reward of Privacy Computing Task Processing: computed only after a mining device claimed computing tasks and completed them. The reward of such a section can be accumulated to the next Epoch is there’s no device completing tasks.

For example: If the reward of computing of each Epoch is:

and if there’s no device claiming tasks during Epoch 1–5, the reward pool will be as below:

Until the task is claimed and completed. The prize pool will be shared by all computing processors and reset.

PHA Reward distribution: every 2 Era.

The length of Era and Epoch has not been set. All detail will be clear before the official start of mining.

2.2 Online Miner (OM)

Miners will share a total prize pool of PHA daily supply according the weights below:

FactorWeightNumber of coresHighCPU PointsMediumMemory PointsMedium

And the sum points of the 3 factors above will be the CP (Confidential Power) points of each miner.

To better guarantee the safety and stability of the network, a miner has to stake a certain amount of PHA before mining.

• Staking Requirement: 1,620 PHA / core (4-core CPU: 6,480 PHA, 8-core CPU: 12,960, etc.)
• Unbonding Period: 7 days (168 hrs)
• Staking Requirement Adjustment: through referendum every 6 month

A good news, Phala will also provide a “loan” protocol for miners to “borrow” PHA from other PHA holders, similarly to how Validators “borrow” DOT from Nominators. TEE miners will have to share part of the mining return to his or her loaners as the “repayment”.

2.3 Task Processing Miner (TPM)

Task Processing Miner refers to the miners who claimed and completed computing tasks. They will receive a decent PHA return. 💰

The algorithm of task distributing will value:

• Staked a large amount of PHA
• High CP points
• Low network delay

It is noted that, as CP points indicate the efficiency of processing tasks, higher CP points will be regarded as “being able to offer better user experience”. Meanwhile, the more PHA a miner staked, the less possibility a miner will do evil to Phala network. Thus, the reward distribution weight will be designed as below:

3. Airdrop Program of Polkadot Ecosystem

Upgraded the original “Airdrop” section into “Polkadot Ecosystem & Parachain Slots Auction”, and deleted (currently) airdrop plans based on other ecosystem and will airdrop PHA only to Polkadot ecosystem.

4. Phala DAO

Added descriptions about Phala Treasury.

The income of Phala Treasury will be raised from:

1. TEE miners (20% of their mining return will be automatically deducted)
2. 20% tax of NPoS

PHA in Phala Treasury will be allocated to:

1. Long-run grants
2. proposals

Besides, We are conducting a game theory analysis on the resource model of the Phala protocol to ensure that the distribution is fair enough. The token distribution and design ideas have been basically determined, and the final version will be finalized and announced before the mainnet launch.

About Phala

A Substrate-based confidential smart contract blockchain on which you can develop confidentiality-preserving and privacy-first blockchain apps. Member of Substrate Builders Program starting lineup. Recipient of Web3 Foundation Grant. Phala will be a parachain of Polkadot, freeing the privacy computing power of countless CPUs to provide confidentiality-preserving function for all blockchains.

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