This proposal has also been discussing on community forum: https://forum.phala.network/t/proposal-stakepool-v2-and-vault-launch/3784

## TLDR

This proposal aims to upgrade the 'Delegate to Earn' mechanism on the Khala network. After the upgrade, a Delegation NFT is assigned as a certificate for users' delegations which solves the withdrawal issue caused by lock-up time. Furthermore, automatically compounding delegator rewards will replace having to claim rewards manually which will improve delegation efficiency. In addition, we are introducing a major new feature called Vault, which allows users to pass the management of delegation to the Vault operator. Vault operators will manage delegations to individual StakePools on behalf of their delegators which will further enhance delegation efficiency. This will also lower the barrier to entry significantly. 

## Features details

### Update 1: An NFT representing each delegation share

Your delegation positions in each pool are now represented as NFTs in StakePool V2. Like any other NFT, they will be transferable and tradable in the PhalaWorld NFT marketplace. As a result, using NFT technology to represent pool shares, the liquidity of your delegation is dramatically increased. Instead of having the sole option of waiting upto 7-14 days to withdraw, you can now trade your StakePool delegation on a secondary marketplace for potentially immediate liqudity.  

![](https://i.imgur.com/DXmexPz.jpg)

### Update 2: Automatically compounding delegator rewards

Delegator rewards can be automatically reinvested in the same StakePool or Vault. As a result, there is no longer a need to manually claim rewards periodically.

### Update 3: Vault - Lowering risk and barrier to entry

Inspired by many DeFi protocols, we present a Vault feature that allows third party operators to manage the delegation of your funds across multiple StakePools in a non custodial fashion. Vaults are pools of funds which can be delegated across any number of StakePools by the Vault operator on behalf of their delegators. The choice of strategy a Vault operator pursues can lead to maximum returns and minimal worker downtime risk to enable premium efficiency for the Vault delegators. Vault operators are incentivised to pursue the best possible strategy for their delegators by receiving a percentage of the rewards.

For many delegators, they will not necessarily have the time or experience to manage individual StakePool delegations in an optimal fashion. Even if they attempt to manually manage their delegations, choosing the wrong pools can be an expensive mistake. These mistakes not only affect their delegation rewards but also effect the stability of the whole network. Our new Vault feature solves all of these issues in one go. A small group of Vault operators, for a fee, effectively can manage the StakePool choices for a large chunk of the user base. This allows them to obtain optimal rewards while incentivising the best run and most stable StakePools, improving the quality of the network for everyone. 

As with delegating to StakePools, when a user delegates to a Vault, they will receive a Delegation NFT. The delegations in the Vault also compound interest.

![](https://i.imgur.com/SAYAfaT.png)


### Update 4: New WrappedBalances pallet and Governance Voting

In StakePool V1, delegation could still be used for governance voting. However those tokens were "locked". This meant the tokens could not be transferred or traded.

In StakePool V2 with an NFT now representing a delegation and being tradable, we need to introduce a mechanism to transfer governance voting rights of the original stake when the NFT is traded. To do this, we need to introduce the concept of WrappedBalances and Wrapped-PHA (W-PHA). 

In StakePool v2 you need W-PHA in order to be able to delegate to a StakePool or Vault. You can always exchange PHA to W-PHA in a one to one fashion. A new pallet called WrappedBalances handles this exchange via smart contract automatically. When a user withdraws they can then convert their W-PHA back to PHA in a reversal of the original exchange. W-PHA and PHA are always 1:1. 

The WrappedBalances pallet enables the tracking of W-PHA. When the user delegates W-PHA to a pool they receive a Delegation NFT which acts a certificate of proof of the share in the pool. This allows the W-PHA to be held by the StakePool or Vault, but be associated with the address of the account that holds the Delegation NFT. 

WrappedBalances uses a proxy voting mechanism. When you exchange PHA to W-PHA, the voting rights of the PHA transfer along to the W-PHA. Delegators can vote for a proposal through the WrappedBalances pallet; it will temporarily lock part of or all of their W-PHA assets to represent the fact these tokens are being used for a governance vote. These locked W-PHA cannot be transferred, or exchanged back to PHA, until your vote has finished. 

So far, WrappedBalances does not support council elections. This feature will be developed within two months after this upgrade. However, because the current total Delegation on the network is close to 190 million PHA, to avoid this impacting council elections, we will freeze the election function until we support this feature.

## Upgrade process impact

### Computing & Delegate related on-chain functions must be stopped during the upgrade

Due to the fact this upgrade involves the entire delegation mechanism, this upgrade will have to be split across multiple blocks, which has never happened in Phala or even in other parachains.

Therefore the time required to complete this upgrade will be non trivial. This means that we need to stop all functions related to StakePools, Workers, Delegation, and Computing Rewards on the chain. This may take upto five days.

### Breaking upgrade on pRuntime & PRB

During the on-chain upgrade computing providers are highly encourage to upgrade their own stack. Changes to the chain will break any existing version of PRB, and so the PRB update is a critical one. pRuntime compatability with the new chain will only support the most recent versions and so an upgrade of this is strongly recommended too. We will provide an exact version number on the PRB monitor page to ensure that compute providerscan determine whether their PRB upgrade is successful.

### Computing Rewards will be delayed for 8 Days

Due to the pausing of all chain functions related to Workers they will all go unresponsive as soon as this upgrade starts and will remain in that state at least as long as the upgrade is ongoing. Therefore we have developed a new function that can suspend the distribution of computing rewards within a certain period. Once this reward pause period finishes, at the first heartbeat event, each worker will be paid the full reward for the entire pause period. But, of course, it requires the worker to have been active before the reward pause period starts and be active after it stops. We feel this is the fairest solution for the community. 

Before the upgrade, we will determine the specific time period required to suspend rewards in advance, including the start block and end block and announce it to the community.

### Phala App 2.0

We will substantially update the Phala App to deal with this on-chain upgrade. This includes the following: 

* Being compatible with the functional changes of StakePool V2, including 
  * an NFT representing a share of a StakePool or Vault 
  * Automatically compounding delegator rewards
* Providing Vault usage and management pages 
* Automated exchange between PHA and W-PHA

The app has been redesigned from the ground up, both under the hood and the user interface. This version strives to be mobile compatible from day one as well.

### Council lists frozen, elections suspended

As mentioned above, starting from this upgrade, we will temporarily freeze the Council list and suspend council elections.

To ensure the Council election's fairness and the Council list's reliability, we will take a snapshot of the Council member list based on the last block before the upgrade and maintain the list until the election function is restored. We of course welcome and encourage the community to fully participate in council elections before they are paused.

## Timeline

### Before the upgrade

* **30th Nov ~  7th Dec** Proposal discussion in the community
* **1st Dec  ~  7th Dec**	Internal Test
* **8th Dec  ~ 14th Dec**	Public Vote for this proposal
* **8th Dec  ~ 14th Dec**	Public Test
* **15th Dec (Estimated)** New versions of pRuntime and PRB released
* **15th Dec ~ 23th Dec (Estimated)**  If the proposal passes, the 'upgrade' starts

The exact upgrade time (block height) will be announced in advance and voted on the motion by Council members.

### During the upgrade

The length of the upgrade is not known ahead of time. The entire upgrade may take upto 5 days, though it may be much shorter, and if critical bugs are encountered it may also take longer aswell. 

* **15th Dec** Suspend the distribution of computing rewards
* **16th Dec** On-chain upgrade starts, the Computing & Delegation related functions stop
* **16th Dec** The Delegate and Mining pages of the Phala App pause and the Phala App upgrade starts. Compute providers can  start to update their pRuntime and PRB.
* **21th Dec** On-chain upgrade finishes. Computing & Delegation related functions start on chain. StakePool V2 and Vault on-chain functions officially launch
* **21th Dec - 23th Dec** On-chain upgrade test period; Compute providers can register and start workers on chain or create pools during this period.
* **22th Dec** Phala App 2.0 launches
* **23th Dec** Resume distribution of Computing Rewards. The whole upgrade ends

Proposal: StakePool V2 and Vault Launch

This proposal is a repeated proposal of StakePoolV2, and the parameters in it are wrong. 
Please vote against it, thank you!

Invalid proposal

# Adding up Khala/Phala council seats into 8

This proposal aims to increase the Council members' seats to 8 in Q4. Both presented for Phala Network and Khala Network. 

At the moment, the Khala Council has five members. I think reaching eight members can help the Phala community grow into more democratic status.

Eight will not be the final result. The council will propose new seats supply based on how the network grows in the future. 


## What kind of council member is most wanted?

Anyone can apply for the council seat!

I, as an independent individual in the Phala community, will personally hope to see the candidate fit with the following traits:

1. Understanding the Phala council election algorithm and the delegation process.
2. Contributed to the community before; the more credit you get from the community, the greater your chance of winning an election. I suggest each candidate make a running statement in the Phala forum to introduce themselves to the community!
3. Commitment your time to the Phala community. It frequently requires participants in council discussion, 2-3 motions per week need brief discussion and decesions. Every council member must join the debate on time, on-call weekly.

For example, it's welcome for council candidates to make a statement on Phala [forum](https://forum.phala.network/c/51-category/51) as a running statement:
- Who you are
- Why you choose to run as a council member is Phala/Khala
- What have you contributed to Phala before
- Which party do you want to speak for in the community? (ambassadors/ miners / developers /PHA holders)
- How much can you contribute as a council member?

## How can I apply to be a council member?

Phala Network will follow the council members from Khala Network so that all running events will be applied from Khala Network: 
https://wiki.phala.network/en-us/maintain/governance/2-join-the-council/


## What can I get as a council member?

- Phala / Khala council members won't get paid. It's a volunteer job
- Execute the right to participate in Phala / Khala on-chain governance, present your people's interests
- Supervise the treasury usage
- Chances to be a Curator of Treasury Bounties!


### About Bounty Spending:

The following introduction is from [Polkadot Wiki](https://wiki.polkadot.network/docs/learn-treasury#closing-a-bounty). Phala/Khala Network follows the same rules.

There are practical limits to Council Members' curation capabilities when it comes to treasury proposals: Council members likely do not have the expertise to properly assess the activities described in all submissions. Even if individual Councillors have that expertise, it is improbable that a majority of members are capable of such diverse topics.

Bounties Spending proposals aim to delegate the curation activity of spending proposals to experts called Curators: They can be defined as addresses with the agency over a portion of the Treasury with the goal of fixing a bug or vulnerability, developing a strategy, or monitoring a set of tasks related to a specific topic: all for the benefit of the Polkadot ecosystem.

A proposer can submit a bounty proposal for the council to pass, with a curator to be defined later, whose background and expertise are such that they are capable of determining when the task is complete. Curators are selected by the council after the bounty proposal passes and need to add an upfront payment to take the position. This deposit can be used to punish them if they act maliciously. However, if they are successful in their task of getting someone to complete the bounty work, they will receive their deposit back and part of the bounty reward.

When submitting the value of the bounty, the proposer includes a reward for curators willing to invest their time and expertise in the task: this amount is included in the total value of the bounty. In this sense, the curator's fee can be defined as the result of subtracting the value paid to the bounty rewards from the total value of the bounty.

In general terms, curators are expected to have a well-balanced track record related to the issues the bounty tries to resolve: they should be at least knowledgeable on the topics the bounty touches and show project management skills or experience. These recommendations ensure the effective use of the mechanism. A Bounty Spending is a reward for a specified body of work - or specified set of objectives - that needs to be executed for a predefined treasury amount to be paid out. The responsibility of assigning a payout address once the specified set of goals is completed is delegated to the curator.

After the council has activated a bounty, it delegates the work that requires expertise to the curator, who gets to close the active bounty. Closing the active bounty enacts a delayed payout to the payout address and a payout of the curator fee. The delay phase allows the council to act if any issues arise.

To minimize storage on the chain in the same way as any proposal, bounties don't contain contextual information. When a user submits a bounty spending proposal, they will probably need to find an off-chain way to explain the proposal (any of the available community forums serve this purpose). This template can help as a checklist of all needed information for the council to make an informed decision.

The bounty has a predetermined duration of 90 days, with the possibility of being extended by the curator. Aiming to maintain flexibility in the tasks' curation, the curator will be able to create sub-bounties for more granularity and allocation in the next iteration of the mechanism.


Adding up Khala/Phala council seats into 8 - public proposal #17

Untitled - public proposal #16

**Dear Phamily**

Allow me to introduce myself. Hi! I'm Thibaut, a French software developer with a background in Java and Ethereum security. I've got over 7 years of development under my wing and today, I come to you to present my registrar application. (view https://github.com/terminalsin for my OS projects)
 
I first heard about Phala at the Paris Blockchain Summit, in which I met several Ambassadors and the legend Marvin himself. Since then, I have become a stake pool provider (#2028). 

The reasons backing my decision to apply as a registrar are quite simple:
- I firmly believe in Phala's potential to expand, and such cannot be due without contribution to the community. Henceforth, I wish to do my part and assist the team in any way I physically can.
- I advocate for privacy over security. I firmly believe Registrars should be authenticated in a fashion which is sensitive to data, albeit without compromising the privacy wish of one.
- I'm trilingual (French, English, Spanish), based in Europe and hopefully quadrilingual in the years to come (currently learning Mandarin). France is a striving country for the crypto-sphere, and the absolute lack of knowledge regarding Polkadot has strongly marked me. I wish to be a leading actor in solving this problem.

If there are any rising concerns or wishes to communicate to me, here are my socials to get in touch:
- Telegram: @terminalsin
- Discord: Ghast#0001
- Matrix: @terminalsin:matrix.org
- Email: mastermind@artemis.ac

I look forward to the Council's response to this proposal,
Sincerely,
- Thibaut Gautier

Temporary document highlighting the methodology for how I will execute my judgements: [https://docs.google.com/document/d/1LuLX2f4d6yGkWUJtL2YpiPAQGCK_p_HmDHaGIGlwgRU/edit?usp=sharing](https://docs.google.com/document/d/1LuLX2f4d6yGkWUJtL2YpiPAQGCK_p_HmDHaGIGlwgRU/edit?usp=sharing)


Thibaut Gautier / Registrar Application - public proposal #15

Unfortunately, I've messed up the hash. Pardon my foolishness, for I ask for forgiveness. I shall ask for another proposal soon.

The dawning realization my hash is incorrect #14

Untitled - public proposal #13

This proposal has also been discussing on community forum: https://forum.phala.network/t/topic/3389

## TLDR:

The proposal is aim to seperate the Phala Mining Reward tokenomic from relaychain, it means that PHA token reward to workers will based on TOTAL workers' ammount from both Phala and Khala, not bonded with either parachain. By merging reward pools, this Gemini Upgrade will help Secure Workers get more rewards on Kusama first, and give free choice to workers to decide if they want to run on Phala or Khala with a same subsidy ratio.

## Gemini Update: Merge Khala and Phala

Back in 2021, Khala Network was born as the pre-mainnet of Phala Network to test its tokenomic and the technology. Instead of having two token, the Phala community decided to share the same PHA token on the both sides. It immediately raise a problem: How can the single token power the two blockchains at the same time?

When Khala was launched, to test the mining subsystem and the tokenomic, there's 1% of the token allocated to Khala dedicated for Secure Worker Mining, while 69% is reserved for Phala mining. From the tokenomic whitepaper (link), we have a different set of parameters for the two chains to define the mining subsidy budget, staking requirements, and reward schedule.

Compared with Phala, Khala has a much smaller subsidy allocation and faster halving schedule, because the basic assumption is that Khala is for testing, and Phala is for production usage. There's also the understanding in the the community that Khala will only be kept for small scale testing, or can even be shutdown once the test is finished.

![](https://i.imgur.com/y15QRQn.png)

> In old model:
> 
> - Assume 500 workers on Khala, 2k workers on Phala.
> - Assume daily reward for Khala is 60k, daily reward for Phala is 720k
> - Per Worker daily reward on Khala is 120 PHA, on Phala is 360 PHA

However, Khala may not be just a testbed. We have seen innovative projects built natively on Kusama with prosperity. The real native projects on Kusama may grow to an ecosystem with full of vitality different than Polkadot. Phala Networks, as the Web3 Cloud, should provide the computing resources everywhere with the demand. We definitely don't want to miss the growing Kusama ecosystem.

If we want to equally treat the Phala parachains on Kusama and Polkadot, now it's a good time to reconsider the mining tokenomic and the allocation between Khala and Phala. In the reamining part of this post, we are going to propose a way to unify Khala and Phala tokenomic.

### Gemini Update 1: Merge Khala & Phala reward pools

The aim of the tokenomic is to properly reward the miners on both Khala and Phala to meet the computation demand on the both sides. So instead of setting the predefined allocation on the both sides, the subsidy pool and the reward schedule should be shared on the both blockchains. The actual reward at a given time can be dynamically adjusted based on the on-chain metrics to reflect the demand on the blockchain.

In this setup, the mining reward on the both blockchains should finally converge to the same level. If one blockchain has more demand than another, the mining reward on this chain should increase to attract miners from another side. As a result, the computing resources between the two chains will be balanced dyanmically.

### Gemini Update 2: Unify the staking and value promised parameters

To implement such a system, the two blockchains should share all the parameters (including stake requirement, halving schedule, and the value promised related params) except the subsidy budget. Instead of maintaining two block subsidy separately, there should be an unified subsidy pool shared in the two blockchains. Each chain only get a protion of the full mining subsidy budget, and the sum of that on the two chains should equal to the unified budget, at any point.

### Gemini Update 3:  Measure the demands

The demand can be measured by different metrics, e.g. the used and the claimed computing resources on the blockchain, which is to be determined later. However, before there's real application running on the blockchain, we can still use the total available computing resources (or the number of miners) on the blockchain as an estimation of the demand measurement.

After the launch of Fat Contract, we expect workers can get extra rewards by been chosen to run fat contracts. The reward budget on the both sides will be balanced based on the demand (on Polkadot and Kusama). This creates an incentive to drive the miners to move to the chain with more demand by their free choice. Eventually, the reward each miner can receive should converge to a fair level.

### Gemini Update 4:  Implementation

To maintain the subsidy budget on the two chains, a bridge between the two chains is required. We call the automatic operation to balance the two chains _"Balancing Process"_. The Balancing Process should happen periodically (e.g. once per day). Once the two blockchains are connected, Phala Network (the parachain on Polkadot) should be responsible to lead the Balance Process, in which it collects the demand metrics from Khala (via the bridge), and determine the split of the subsidy budget, and then assign the new subsidy budget for the next period. The deployment of the new budget can be done by the bridge as well.

Since the only different on the two chains is the subsidy budget, we can reuse most of the tokenomic implementation we have right now. While adjusting the subsidy, the bridge should also be used to move the PHA between the subsidy pools on the two chains to ensure there's enough token.

Once the Kusama-Polkadot bridge is deployed, we can use XCM to bridge the two parachains more safely.

### Gemini Update 5: Parameters and details

Updated subsidy budget

|                    |     Total      | Geminine | Legacy Khala  | Legacy Phala   |
| ------------------ | :------------: | :-----:  | :-----------: | :------------: |
| Relaychain         |       /        | Polkadot & Kusama | Kusama  | Polkadot |
| Budget for Mining  |    700 mln     | 700 mln | ~~10 mln~~  | ~~690 mln~~  |
| Halving Period     |       /        | 180 days | ~~45 days~~ | ~~180 days~~ |
| Halving Discount   | 25% per period |   25%    |     25%     |     25%      |
| Treasure Share     |       /        |   20%    |     20%     |     20%      |
| First Month Reward |       /        | 21.6 mln | ~~1.8 mln~~ | ~~21.6 mln~~ |

Besides the mining subsidy, the other tokenomic parameters generally follows Khala's since it has been running stable for the last a few months:

- Stake multiplier: Re = 1.5
- Minimum stake multiplier factor: k = 50
- Unconditional V increment factor: rho = 1.00020 (hourly)

Beyond the parameters, we propose the following changes to improve the mining experience:

1. Allow to increase stake without a full stop: In the past, to change the stake you have to stop the miner, wait 7 days, and restart the miner. The tokenomic requires a delay period exists before the withdrawal of the stake, but it's not necessary to have it when increasing the stake. So in this change, we can allow stake pool owners to increase the stake for a miner without the miner to stop and wait for 7 days. In this process, V will be reset because it's equivalent to a stop followed by a restart without the waiting period.
2. Calibrate the mining subsidy to match the block time: In the past, the actual block time of the parachains used to be significantly longer than the standard value (12s). It causes the miners get much smaller reward. We should adjust the reward budget to compensate the misalignment.
3. (Work in Progress) Revise the other parameters, especially the discount of low confidential level
4. Other tokenomic fixes: [#680](https://github.com/Phala-Network/phala-blockchain/pull/680), [#638](https://github.com/Phala-Network/phala-blockchain/pull/638)

## Examples

The advantage of this proposal is that the subsidy on Phala and Khala is defined by the competition of workers' ammount on each parachain -- there is no longer "mainnet" any more. Even though Phala haven't launch on Polkadot, all subsidy will send out to online workers.

![](https://i.imgur.com/ZfaTKpj.png)

> In new model: 
> 
> - Assume 5k workers on Khala, 0 workers on Phala when we haven't launched on Polkadot
> - Assume daily reward for the Gemeni pool is 720k
> - Then Khala receives 720k PHA daily reward, Phala receives 0 daily reward
> - Per Worker daily reward on Khala is 144 PHA

![](https://i.imgur.com/fLUhrVT.png)

> In new model:
> 
> - Assume 3k workers on Khala, 5k workers on Phala
> - Assume daily reward for the Gemeni pool is 720k
> - Then Khala received daily reward as 270k, Phala received daily reward as 450k
> - Per Worker daily reward on Khala is 90 PHA

### Launch Plan

| Timeline | Action | 
| -------- | -------- | 
| 15th March ~ 20th March | Proposal discussion in community    | 
| 21th March ~ 28th March | Public Vote for this proposal     | 
| 29th March ~ 30th March | Tokenomic runtime upgrade (Gemini Upgrade) / Wiki update (If passed)  | 
| 18th March   | Bidding for Polkadot slot auction | 
| May      | Launch Phala Network on Polkadot (if we win the slot auction) | 



Phala Mining Tokenomic Launch - public proposal #12

After Issue #500, we have seen a decrease in miners’ enthusiasm for Khala mining. 
As a member of the miners, I hope that in addition to the basis of the 3% income, a 2% of the income should be added as compensation. 
That is, the affected accounts will obtain 5% of the staking income compensation of the abnormally locked amount in total.

https://forum.phala.network/t/topic/3236/2?u=lucia

Compensation Proposal for Miner’s Assets Freeze Due to Issue #500


This is a proposal to the whole PHAmily (both the Khala and Phala community)：
- If the proposal passes, we will use the proposed strategy to join #6 - #11 slot auctions.
- If the proposal fails, we will initiate a public referendum to update the Khala Network on Kusama to Phala's economics, effectively creating the Phala network on Kusama. Later, we choose the best time and strategy to join the Polkadot network as a parachain (but after auction #11). 

## TLDR: The strategy in short
- Phala Network will join as crowdloan to bid for auctions #6 to #11.
- The auction cap will be set to **8 mln** $DOT.
- The total reward budget will be **10%** of $PHA's total supply. Part of the $PHA reward will come from future on-chain treasury, guaranteed by Secure Mining rate in tokenomic paper.
- Basic reward: Contribution of **1 $DOT will return 12 $PHA as reward**. 15% will unlock immediately, and the rest will be linearly vesting for 96 weeks.
- No whitelist, No early birds, No referral reward. We think you are already tired of this! We distribute bonuses directly to all contributors equally.
- The only extra reward will be: 
  - **Old Gangster bonus**: Contributors from previous Khala Kusama auction will have a **5% extra** reward. So will the ones who have over **300 $PHA** on Khala address before blockheight #902400
- If we fail to win a slot between #6 - #11, we will drop out of the auction but initiate a public referendum to **upgrade Khala Network into Phala Network** on Kusama directly. We will join the auction when there is a better opportunity in the future.


## What does the Phala community wish for?

Marvin Tong, the founder & council member of Phala Network published an [open discussion](https://forum.phala.network/t/topic/3213/4) for the strategy of Polkadot slot auction before. The Phala community had a month- long discussion and the major ideas are:
- We don't need to participate in the 1st batch slot auction. The most important thing is to focus on building actual projects on Khala
- People don't like whitelist, but KSM contributors for Khala definitely deserve bonus.
- People want simple rules. 
- Handle the budget carefully and responsibly: Set the reward percentage to what the network can realistically afford to give up. 
- Set a minimum reward based on a cap.
- A plan for the possible result of Phala losing the 2nd batch auction.
- Leave marks for the people contributed via CEX.

We want to listen to our community and support all of these ideas. We strive to give a simple, fair and long-term benefit plan.

Here it is:

## Budget Strategy

**10% of $PHA supply is the budget for this round of Polkadot slot auction.**

In our tokenomic breakdown, we have reserved a total of 6.9% from our token supply for Polkadot and Kusama slot auctions. To secure a Kusama parachain slot, we have already used 2.5%, leaving 4.4% for the Polkadot slot auction.

So where does the rest 5.6% of the total supply come from?

The answer is the future Phala on-chain treasury. Because in Phala tokenomic paper, 70% of total supply is mint out and there is a 20% of mining tax. So we can get at least 70 mln $PHA for slot auction:


| Months | Mining Rewards | Tax To treasury|
| -------- | -------- | -------- |
| 6	| 129600000	| 25920000| 
| 12	| 97200000	| 19440000| 
| 18	| 72900000	| 14580000| 
| 24	| 54675000	| 10935000| 
| Total	| 354375000	| 70875000| 

We also need enough budget to grow Phala's ecosystem and 5.6% from treasury will be enough for it. In total, 5.6% + 4.4% make 10% and that is the total amount allocated to reward crowdloan contributors.

> Since part of the budget is coming from mining treasury, the rewards cannot be sent to accounts immediately after on-boarding. However, that is not a problem. Because paying out the rewards gradually works perfectly fine together with the vesting schedule, which means, some parts of the rewards are sent out gradually per block.

## Basic Reward Rules

- Each $DOT contribution will have a reward of 12 $PHA
- Auction cap for Phala will be $8 mln DOT
- 15% of the total rewards (including basic and extra rewards) will unlock immediately, and the rest will be linearly vesting over 96 weeks.

### Channels

We are planning to join the auction via the following Decentralized tools:
- Polkadot.js
- Parallel Crowdloans. You can choose to get liquid cDOT for each DOT contribution, or directly contribute to Polkadot pallet via your address
...
> Other tools are still under review

You could join the auction via following centralized platforms:
- Kraken
- Okex
- Kucoin
- Gate.io
- Huobi
- MXC
...
> Other platforms are still under review


## Extra Reward Rules

We think Polkadot & Kusama community members are already tired of following so many rules to get rewards, so we abstain from using any incentives such as: 
- Whitelists, because it takes a lot time to join tons of campaigns.
- Referrel links, because it gives the members who use CEX a disadvantage.
- Early bird, because people might miss the registration and feel very frustrated. It also forces users to lock up their tokens very early, which is unfair.
- Un-fixed ratio, because it induces a lot of uncertainty about future rewards for contributors.

We want to give the community a simple and clean plan and use as much as the bonus budget possible to reward all community members. If we win, we win; if we lose, we also win. While we abstain from giving early-bird or referral bonuses, we still want to value our supporters who helped us to obtain our Kusama parachain slot. Therefore, we will still use one simple bonus mechanism for our early supporters.

### Old Gangster bonus

- All addresses that contributed to previous Khala Crowdloan will have a 5% extra reward, on top of the basic rewards.
- Based on the snapshot by Khala blockweight #902400 , every Khala address with more than 300 $PHA balance will also be in the old gangster list. If you use this address (each Khala address have a Polkadot address) to contribute to Polakdot crowdloan, you can win an OG bonus as well.

We will provide a tool that can help you verify if your Polkadot address is "old gangster" or not.


## Strategy if Phala loses 

In the case that Phala doesn't win during the campaign of auctions #6 - #11, your contribution for $DOT will be returned to your addresses. And Phala community will choose from the following strategy:

- Exit from 3nd batch of slot auction, but keep an eye on it to decide if we will rejoin the bidding at a better time with a smaller budget.
- Upgrade the Khala network to the economics of Phala. This will be a major update of the tokenomic parameters. For example, mining parameter will become Phala version, and we will also change the names on polkadot.js, explorers etc. Note, that this is subject to governance and it is up to the token holders to decide the outcome.
- All contributors to Phala slot auction, even though we do not win, can get on the whitelist for Phala World 1st generation NFT sales. Phala World is a metaverse for Phala community on top of Bit.Country, all players will use RMRK NFT to build and play around with PVE & PVP mode in the future. We are planning to launch the NFT sale and airdrop in Jan-Feb, 2022.

With this strategy, we are set for all possibilities and think that this is in the interest of the whole community.



#10 Phala Polkadot Slot Auction Strategy

This is the resubmission of Proposal #8.

**Summary**: This proposal aims to adjust the block subsidy budget up by 35% to react to the slow block time. The proposal was re-created because the original one carries a bad proposal encoding.

- Please view the [Original Proposal](https://khala.subsquare.io/democracy/proposal/8) for the intention
- The details can be found from [the forum post](https://forum.phala.network/t/topic/3274)

Adjust tokenomics params to reflect difference in block time (resubmission of #8)

## [Phala forum thread here](https://forum.phala.network/t/topic/3274)


I would like to propose adjustment in tokenomics params to reduce impact of  gap between real and target block time.

Target time on parachains is 12s.
Those are our avg block times calculated based on onchain data.
```
Average block time in last  1 day     16.4 s
Average block time in last  1 week    15.7 s
Average block time in last  2 weeks   15.5 s
Average block time in last  1 month   16.1 s
Average block time in last  2 month   15.7 s
```
As you can see we have long term 30% gap. It impacts all features which base on block number (not timestamp). 
For example mining rewards are block based - which directly impact APR of owners and stakers. It is worth noting that in [app.phala.network](app.phala.network) all values you see are also block based.
If you calculate your APR time based you will see it differs for 30%

Worth noting (mentioned by team):
This issue occurs because substrate has limited (obvious) throughput in processing blocks and simultaneously Phala extremely utilize onchain actions.

Compare Moonriver and Khala below (at most it is even 100x more transactions).
Btw. Moonriver is second most used chain ;)
![](https://forum.phala.network/uploads/default/optimized/2X/d/d31d143f303165c97e6bec7075d642d53e1a4c07_2_690x209.jpeg#/w690/)
 
As you can see lot of things happens on Khala and it is probably not possible to improve throughput in short term.

However this proposal is to reduce impact of that issue.
IMO block time in any contract calculations should not be fixed to target 12s value.
I think we should periodically adjust that value to reflect real block time.
Depending how much it will vary we should adjust it monthly based on last month average block time.

Adjust tokenomics params to reflect difference in block time

Untitled - public proposal #7

### ***This proposal is consist of one proposal and two sub-bounty proposals***

# Context
The Phala core team took a very small (5%) amount of tokens compared to other blockchain projects to be able to distribute more to the community and the miners. By doing this, **it was always our vision to use the Treasury to support those most active in making the network a success and compensating for a professional advisor team that helps to develop Phala in many respects.** Doing this on-chain maximizes transparency and avoids opaque advisor deals. This proposal is the first attempt to implement such a plan using the Bounty system. Although the Council does have the power to spend Treasury funds, **we decided to put this up for a community referendum to avoid any conflict of interest and to get the maximum discussion and buy-in from the Phala stakeholders.** That means, we will not use the Council's power to execute this bounty directly but have the public decide on it.

# BOUNTY ONE (Previous task)

**Bounty Proposal:** Bounty to compensate expert advisors of the Phala team
**Proponent:** 3zfavDwAsV83TGCDYko4gs3uYPQq4fuS8mcy5BtFqjzyPes8
**Date:** 11.11.2021
**Requested allocation:** 225000 PHA
**Proposed Curator reward:** 100 PHA

**Short description:**

This bounty is used to compensate the expert advisors for their work previous to the launch of Khala as well as for ongoing work until October 2021 and the future work from November to December. The expert advisors provided us with their professional opinion, industry experience and guidance for a successful inception of the network. Furthermore, the experts pledge to further help the Phala team in the future. They hold important knowledge in growth management, strategic and economic analysis, technical support and dev education, all important skills for a successful network.

## Context of the bounty:

We have three excellent expert council advisors, they are: Joe, Jonas, Zoe. They are all experts in their respective fields, and have made great contributions for the development of Phala, which will be compensated with the proposed bounty.

Expert advisors will help Phala in the long-term development of growth, technology and analysis&research, and establish reputations in the crypto world. They are Phala's "think tank".

For their outstanding contributions, we will give them incentives through this bounty. This task bounty will be a long-term incentive bounty, which will be split into different stages of sub-bounty. For example, in 2021 we will apply for one bounty from March to October, and another from November to December. Each bounty will be rewarded with different tokens according to the contributions made by expert advisors.

The incentives for expert members will only come from the bounty program of the treasury, and rewards will be given based on their contributions.

## Problem statement:

Different skill sets are required to help the Phala ecosystem. Those are:

1. Growth: Penetrate the European market to raise user awareness and create an active and larger developer community.
2. Research and Analysis: Research and analyze new tokenomics mechanisms that suit the innovative nature of the Phala network. Additionally, the complex nature of the parachain slot auctions require thorough analysis and planning.
3. Technology and Product: Suggest new products and opportunities for the Phala core technology.

## Solutions:

### Milestone 1: Growth

**Mission: Activate the European market and acquire more reputation in Europe for Phala**
**Person in charge: Zoe**
**Budget: 75k PHA**
**Time: Mar.- Oct. 2021**

**Achievements:**
* created speaking opportunities for Marvin before Khala Launch
* Clubhouse with community over 1k members
* BerChain event
* moderated community events on crowdcast with Marvin and Hang
* Formed a developer education team. Reach out and Interview developer advocators.
* Promoted the hackathon in the European dev community.

**Detailed information with attachments and links:**

1. Brought more exposure for Phala in the European market and enhanced the awareness of Phala in the European market.

* European Blockchain Convention: https://www.linkedin.com/feed/update/urn:li:activity:6861646035043835904/

![](https://forum.phala.network/uploads/default/original/2X/0/04e00d20788cd2cc27a0da71f85cfecfd5e1874f.jpeg#/w730/)

* Get the opportunity to participate in the AsiaBerlinSummit2021 for Phala, and representing Phala at AsiaBerlin Summit: https://www.linkedin.com/posts/zora-meckbach_blockchain-privacy-decentralized-activity-6851873133293568000-_9rm

https://twitter.com/MeckbachZoe/status/1446463415468298248

![](https://forum.phala.network/uploads/default/original/2X/1/1c0c36863384a879541862f33ee98e03f7f263a8.png#/w730/)

2. Interacted with and established a closer relationship with users in the European community

* Phala und Web 3.0 für Beginner meet-up: https://www.meetup.com/phala-privacy-meetup-dusseldorf/events/281590671/?_xtd=gqFyqTI3ODQxOTc4NKFwo2FwaQ&from=ref

![](https://forum.phala.network/uploads/default/original/2X/f/f0180ff28aa136622d52631ed21ab9ef097716b7.jpeg#/w730/)

* Created Ambassador program events guide: https://www.notion.so/phalanetwork/Global-Ambassador-Events-Guide-8b73e2e561a7462caf13b7313ebd8cb1
* German ambassador communication: Since Zoe is based in Germany, she had undertaken some tasks in collaboration with the German ambassador and they co-organized an offline meet-up in Germany.
* 2021 Phala Berlin meetup: https://www.meetup.com/Polkadot-Berlin/events/281710295/

![](https://forum.phala.network/uploads/default/original/2X/5/5352d4be167b646d97bf4a177be23ec7c4a4341a.png#/w730/)

3. Growth Business Development

* Successfully promoted Phala to become the official member of[ BerChain](https://berchain.com/) - a Berlin based Blockchain community with over 150 members from the European and global blockchain ecosystem.
* Expanded cooperation opportunities for Phala within the European universities.

### Milestone 2: Tech and development

**Mission: Give tech support to team and help to build tech community**
**Person in charge: Joe**
**Budget: 75k PHA**
**Time: Mar.- Oct. 2021**

**Achievements:**
* Suggested topics for hackathon with Encode.
* Gave suggestions of building a dev community.
* Assisted the technical team to successfully launch the mining system.
* Helped Phala solve the technical difficulties in the mining program, and shared technical skills. Helped to solve the on-chain issue.

### Milestone 3: Research and Analysis

**Mission: Completion of related research on the Phala project**
**Person in charge: Jonas**
**Budget: 75k PHA**
**Time: Mar.- Oct. 2021**

**Achievements:**

* Conducted rigorous market research for Phala in the early stage of the tokenomics creation, studied the tokenomics of well-known projects in the field of crypto currency, and gave adjustments and suggestions to the former Phala tokenomics.
* Fully participated in the discussion of the current tokenomics and the continuous revisions, pointed out risk issues, and provided solutions.
* Conducted market research on the Kusama and Polkadot slot auctions, analyzed publicly available blockchain data and slot auction data and gave mathematical model calculations and inferences to Phala's slot auction rewards. This laid the foundation for Phala's successful low-cost slot auction.
* Provided constructive input on incentives in Kusama slot auctions, put forward the NFT reward plan, negotiated a partnership with RMRK and actively communicated with partners and developers to promote the progress.
* Developed the outline for the upcoming thought leader tournament that incentivizes community members to create content about Phala and thereby help to grow the outreach of the network.



# BOUNTY TWO (Future task)

**Bounty Proposal:** Bounty to compensate expert advisors of the Phala team
**Proponent:** 3zfavDwAsV83TGCDYko4gs3uYPQq4fuS8mcy5BtFqjzyPes8
**Date:** 11.11.2021
**Requested allocation:** 75000 PHA
**Proposed Curator reward:** 100 PHA

**Short description:**

This bounty is used to compensate the expert advisors for their work previous to the launch of Khala as well as for ongoing work from Nov to Dec 2021. The expert advisors provided us with their professional opinion, industry experience and guidance for a successful inception of the network. Furthermore, the experts pledge to further help the Phala team in the future. They hold important knowledge in growth management, strategic and economic analysis, technical support and dev education, all important skills for a successful network.

## Problem statement:

Different skill sets are required to help the Phala ecosystem. Those are:

- Growth: Penetrate the European market to raise user awareness and create an active and larger developer community.
- Research and Analysis: Research and analyze new tokenomics mechanisms that suit the innovative nature of the Phala network. Additionally, the complex nature of the parachain slot auctions require thorough analysis and planning.
- Technology and Product: Continue to support Phala with new ideas of how to deploy the core technology in user-facing or developer products.

## Solutions:

### TASK 1: Growth

**Mission: Activate the European market and acquire more reputation in Europe for Phala**
**Person in charge: Zoe**
**Budget: 25k PHA**
**TIME: NOV.- DEC.2021**

**TODO LIST:**

* Follow up promotion of Berchain collaboration & BerChain community expansion & BerChain BlogPost
* Continue to build a dev community education team, keep reaching out and interviewing candidates.
* Push Phala PR in German magazines
* Minerva University students Visit at WeWork Berlin to learn about Phala Network
* Follow up European Blockchain Convention
* Conduct 2021 Phala Berlin meetup:
* https://www.meetup.com/Polkadot-Berlin/events/281710295/

### TASK 2: Dev support

**Mission: Give tech support to team and help to build technical community**
**Person in charge: Joe**
**Budget: 25k PHA**
**TIME: NOV.- DEC.2021**

**TODO LIST:**

* Give suggestions for building a dev community.
* Assist technical team to optimize the mining system.
* Assist technical team to solve any problems encountered on-chain.

### TASK 3: Research and Analysis

**Mission: Completion of related research on the Phala project**
**Person in charge: Jonas**
**Budget: 25k PHA**
**TIME: NOV.- DEC.2021**

**TODO LIST:**

* Will work on an improvement and updated version on the tokenomics of Phala to solve challenges that are imposed by the innovative technology.
* Analyzing and optimizing the strategy for the upcoming Polkadot slot auctions and guiding the future actions to acquire a slot on Polkadot.
* Continue the work on the Phala thought leader tournament.

Bounty to compensate expert advisors of Phala team - public proposal #6

Untitled - public proposal #5

Untitled - public proposal #4

Hello, community leaders,
I’m a teacher. Eager to get your attention and help!
As the title suggests, I was robbed. I’m really sorry to take up public resources. One year ago, I was very lucky to participate in phala network test and I also got a hard-won reward of 15,000Khala during the growth together with Phala. But now I can’t sleep all night. I know this has something to do with the mnemonic leak that may have occurred during my accidental community test exchange, but I wish I could get more support and help to make the Villains fail! Move to freeze stolen assets!

So if possible, I ask for a referendum:

Permanently freeze their stolen assets!
Account theft is: 41 uqxayg7r3ztktfmjdhkdjoppqmpxyzwsv61xnf8xhzys1c
Preplan hash:
0xa00af5dd50cb26e37cd0dc81821cf486ddb57a5d9daf9c8eca35e49f13ad666b

My theft details and evidence of stolen accounts are in the following files

Request community referendum on stolen Khala account assets!

[![opzaFg.md.png](https://z3.ax1x.com/2021/11/23/opzaFg.md.png)](https://imgtu.com/i/opzaFg)

You can comment on this document to raise questions (if necessary, I will do my best to provide the required information to send to you!


【腾讯文档】副本-英文翻译edit
https://docs.qq.com/doc/DTllwTGVoa2FTbEVx

Regarding stolen assets request community support to freeze the accounts of the money thieves         

# Proposal Overview

This proposal below is initiated for the community referendum. The proposal itself does not contain any specific `runtime_update`.

* Open Khala Transfer
* Launch Khala-Ethereum bridge for $PHA transfer

If the community’s opinion is `“AYE“`, then the proposal will be successfully passed. Khala Council will implement two ` fast_track` proposal separately:
- Motion A : on this proposal take effect `Day 0`, use `runtime_update` to open Khala transfer
- Motion B:  on this proposal take effect `Day +5` , use `runtime_update` to launch Khala-Ethererum bridge

# On-chain Info

The proposal `0xd1229f749b7633ba995b70f26886be0bdc9c6563e21a2ce2002991c9bae9830a ` is now available on the Polkadot.js app:

> **Vote here**:[ https://polkadot.js.org/apps/?rpc=wss%3A%2F%2Fkhala-api.phala.network%2Fws#/democracy ](https://polkadot.js.org/apps/?rpc=wss%3A%2F%2Fkhala-api.phala.network%2Fws#/democracy)

There will be a **7-day** `Voting Period` and **3-hour** `Enactment Period` before execution. To learn more about how to participate in our democratic structures please read:[ https://wiki.phala.network/en-us/docs/governance/1-participate-in-democracy/ ](https://wiki.phala.network/en-us/docs/governance/1-participate-in-democracy/)

* ***Preimage***: `0xd1229f749b7633ba995b70f26886be0bdc9c6563e21a2ce2002991c9bae9830a `
* ***Proposal Hash***: `0xd1229f749b7633ba995b70f26886be0bdc9c6563e21a2ce2002991c9bae9830a `