Why is Phala suddenly sought after by the market?

Standing on the wind of AI Agent, hugged the thigh of ai16z.

Written by: Haotian

Many people are puzzled as to why $PHA suddenly became popular for no reason. To put it abstractly, even @PhalaNetwork may not have expected to become the chosen one all of a sudden. This is because the popularity of PHA has both accidental and inevitable factors, and it is not something that can be achieved by any conspiracy. There are three key points: sufficient preparation of TEE technology, the support of a16z, and the perfect timing of AI Agent.

1） The cultivation of Phala Network in TEE technology is the “inevitable” catalyst for this matter, why is that?

Although TEE (Trusted Execution Environment) is not a new concept, it has always been a “niche” in the mainstream technical narrative of Crypto in the past few years. For example, there have been many high-performance chains competing with language advantages such as RUST and MOVE, and there has also been a ZK technology trend with ZK as the main theme. TEE, MPC, FHE, Blind Compute, and other encryption technologies occasionally appear in the differentiated positioning of individual projects, but they are not at the same level as the popular ZK.

In fact, while mainstream chains are focusing on the efficiency of ‘block space’ (MEV, TPS, Gas, etc.), ZK technology is only applied to the most basic trusted state changes between layer1 and layer2. The advantages of ZK technology in more aspects such as the underlying zkVM virtual machine, zkSNARKs chain data structure evolution, etc., have not yet reached the point of being used, let alone achieving a larger scale Mass Adoption.

The main reason is that previous technical narratives have pursued a pure ‘on-chain’ environment. ZK is considered the first step of separating off-chain computation and on-chain verification, but the ultimate goal is still to serve ‘on-chain’. The trusted execution environment (TEE) is naturally a ‘pre-processing’ process in the secure enclave environment ‘off-chain’.

It can serve on-chain, and it is the result of the gradual expansion of Pre-confirmation new narratives brought by leading projects such as Unichain and Flashbot. In other words, without integrating with the chain, TEE is definitely a mature technology of pure web2. When combined with the chain, it can bring about ingenious uses such as trusted pre-processing and isolated privacy computing.

Therefore, those who dare to apply TEE technology to the field of blockchain must have the endurance to withstand loneliness, as well as unique and wise insights. In this regard, PhalaNetwork does indeed have a mature solution for TEE, without a doubt;

2. Unexpectedly, a mysterious customer named ‘ai16z’ emerged and adopted their own TEE solution, which is the biggest ‘accidental’ factor in the PHA explosion.

After seeing AI-Pool’s official announcement about AI Agent issuing coins, I immediately tweeted a technical analysis of the TEE solution (TEE enables AI to achieve autonomous management of private keys and sign applications in a secure enclave that is available but invisible), as well as the historic opportunity that Phala and ai16z’s collaboration may bring (which is also an excellent entry point for most retail investors).

It goes without saying that ai16z currently holds a prominent position in the AI Agent field. The adoption of Phala’s TEE solution by AI-POOL indicates at least two things:

• Phala’s TEE solution has many mature business cases and has been selected by ai16z;
• Phala’s TEE solution will be the first to enjoy the benefits in the grand business idea of AI Agent PumpFun, which controls the private key for issuing coins.

If you understand this, you will naturally understand what Phala can gain from the phenomenon of AI-Pool and intelligent agent issuing coins. It is a natural logic that as the AI agent issuing coins continues to drive, the private key management and remote authentication services provided by TEE will become a “rigorous demand” business, and a set of on-chain verifiable consensus suitable for TEE off-chain environment adaptation will become a bonus point, which can be regarded as the new infrastructure of the AI agent era.

So, after buying PHA, I may not truly understand Phala Network, but it doesn’t matter. I think I have a better understanding of the market potential and incremental opportunities that AI Agent+TEE and AI Agent+Chain may bring.

3. What really gives Phala Network a sense of foresight is the currently popular AI Agent narrative. I have pinned several articles about AI Agent narrative in my Twitter profile highlights. New friends who follow me can take a look. Those articles can be summed up in four words: ‘Don’t miss it, don’t miss it, don’t miss it’.

Because the AI Agent derives from AI MEME, it appears on launchpad platforms such as Virutual, Vvaifu, and so on.

@aixbt_agent, monolithic AI such as Zerebro, to the emergence of frameworks and standards such as ELIZA and ARC, until old chains like Phala are blown into the wind, everything is evolving rapidly, almost beyond everyone’s imagination. Why？

Just one point, because this is a historic opportunity for the main uptrend of the DeFi Summer level. The burst of innovative gameplay, the thirst for hot money, the opportunities for information asymmetry and so on are destined to be “hot and spicy” all the time.

So, I shouted the slogan loudly, just hoping that more retail investors can seize the Alpha growth opportunities, and more project parties can break free from the ‘unable to deliver’ dilemma of the traditional VC coin narrative.

A new narrative tornado is blowing, and its purpose is not just to blow dust (chicken feathers) on your face as the wind passes, but to take you to the forefront and become the little pig that is rich and oily.

By the way, the subtext of this paragraph is not to worry about missing out on PHA, because Phala is just one of the beneficiaries of the trend, who first enjoyed the trend dividend. Please believe that there will definitely be more opportunities.