Dot Pulse #13 — Parachain szn & Khala Deep Dive

Learn about the Khala parachain, Polkadot parachain auctions, new Sushi farms and governance watcher! 📣

Welcome to Dot Pulse, your window into the Polkadot DeFi ecosystem.

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Our parachain tour continues with Khala Network, the canary deployment of Phala Network. In a nutshell, Khala is a privacy blockchain based on Trusted Execution Environment (TEE) hardware. We’ll uncover what this means and everything else worth knowing about Khala!

Khala: The Decentralized Cloud Computer

Khala and Phala aim to be a generalized computation platform, taking a stab at the original promise of Ethereum as a world computer. Like Shiden, our previous entry, Khala focuses on WebAssembly smart contracts, which as we’ve seen are far more ambitious in scope than the EVM.

The kicker with Khala is that it also supports data privacy by relying on TEEs, or Trusted Execution Environment cells. While the tech sounds fancy, in reality many Intel-based home computers feature these cells in the form of the Intel SGX, a TEE enclave system that’s been around since 2015.

The benefits and drawbacks of trusted hardware

The TEE is an encrypted region of a computer’s processor that can’t be tampered with by any other software or hardware. In theory, TEEs are an amazing solution for trusted computation and blockchain privacy. 

In Khala, a special TEE operating system called pRuntime allows executing arbitrary smart contract code without having to leak its inputs and outputs. This could enable use cases like private token transactions, private DeFi trades and much more! And the best thing is that it’s all essentially live now, and doesn’t require “MoonMath” breakthroughs like with zk-SNARK technology. 

“But wait, we’re expected to trust an external piece of hardware?” we hear you say. And the concerns would be justified, we definitely shouldn’t just trust that some remote hardware is behaving properly! 

In the case of the TEE chips, cryptographic signing methods give us a reasonable guarantee that we’re interacting with a particular TEE enclave, thanks to a process called Remote Attestation.

All SGX enclaves feature internal private keys that should be inaccessible to anyone but the TEE itself. These keys are then used to verify the TEE’s proof of execution, so it is absolutely vital that they remain inside the chip.

You can see where this is going: there have been several instances of confirmed vulnerabilities that could leak the keys. Sgaxe is the most famous, but there have been others. Now, this isn’t all as bad as it sounds. The hardware can be patched in most cases, while unpatchable vulnerabilities so far only affect a few specific chips. The attacks have also been purely theoretical so far.

How Khala tackles security

The developers behind Khala are aware of these issues, which is why they chose to combine TEEs with a blockchain-based verification system. In Khala and Phala, the chain is mostly  maintained by Gatekeepers, a unique spin on basic Kusama/Polkadot collators. 

Collators usually don’t need to stake assets or participate in some form of consensus, on Khala they do. This is necessary to maintain the security of the TEE nodes. Becoming a Gatekeeper requires staking an amount of PHA dictated by your “CPU score,” a kind of reputation system. You also need to have the proper hardware, including the SGX cell.

The PHA you stake as a gatekeeper will be slashed if the results of your TEE calculation do not match that of your peers, which should hopefully localize any potential attack to the TEE hardware. Also, gatekeepers are selected randomly by the system, so a potential attacker would need to break a lot of them to compromise the network. 

Regular desktop computers can run Gatekeeper nodes, though you may need to beef up your storage with high-speed NVMe SSDs. So far, more than 1200 nodes have signed up for gatekeeping tests on Phala.

Crowdloan and deployment

One unique aspect of Phala is that it didn’t create separate tokens for its Kusama version. For Phala, Kusama is a way to deploy a “pre-mainnet”, so Khala’s token is simply called K-PHA. The team allocated just 1.5% of the combined maximum supply for the Kusama crowdloan, though it’ll take a while to reach full dilution.

The ROI for crowdloan contributors is around 30%, which is comparatively lower than other parachains in its batch. But Khala’s time’s yet to come — its focus is not so much on DeFi but on general computation.

Polkadot Weekly Farms

All eyes on Polkadot this time as the auctions officially started. (Woooo!)

While some of the crowdloans had already begun last week, now we have a more complete picture of the participants. 

For Kusama, everything is proceeding as planned. Bit.Country became the latest parachain with 209k KSM committed (a surprisingly large amount!).

Active Crowdloans (Polkadot)

TL;DR: Acala is offering 17% of supply for the crowdloan of its DeFi hub. Check out our deep dive on its canary Karura to learn more about the project.

TL;DR: Crowdloan participants receive 10% of the GLMR supply. Learn more about it in the Moonriver deep dive.

TL;DR: Offering a nice 20% of the supply, Astar is the main network for the Shiden canary we covered last week.

Active Crowdloans (Kusama)

TL;DR: Offering 8% of supply, now first place with 45k KSM. The project is an NFT platform for Polkadot/Kusama.

TL;DR: This DeFi-focused project collected a decent amount this week to reach second place at 29k KSM. Contributors are bidding for 12.5% of the supply.

Active Farms

Earn KAR by staking on Karura DEX

  • Yields are now 21% APR (or 42% with loyalty bonus) for KAR/KSM. 

  • KSM/LKSM farm has 12% APR (40% with loyalty)

  • KAR/kUSD offers APR is 53%, 76% with loyalty.

Earn KAR + BNC (Bifrost tokens) when staking kUSD/BNC 

  • APR is 137% with loyalty, 41% without.

Sushi farms on Moonriver are now live! Topping out at 220% APR for the MIM pool, with the rest staying between 110% and 30% APR. You’ll be earning both SUSHI and MOVR on all of them.

Solarbeam farms hit a major snag. Now only the Pool 2 earns triple digits APR, the rest are around 50%.

Parachain auctions on Polkadot started yesterday, November 11. We’re officially in parachain season!

So the main network is now accepting bids for crowdloans and parachains. You can learn more about how it all works and how to contribute in our previous edition focused on Kusama’s auctions.

Right now we’re looking at a relatively predictable top-3 made of Acala, Moonbeam and Astar, actually the same order as on Kusama! Only this time, it seems that Moonbeam may take the first slot. 

This shift is likely caused by the amazing performance of MOVR on Kusama, which was by far the most successful crowdloan in terms of returns for holders. Keep in mind that the token economics of GLMR are quite different, for example in terms of free supply and crowdloan rewards!

Still, Polkadot parachains are different. Everyone in a given batch launches at the same time, so you’re gucci as long as you make it in the top-5. But the next question is, when will we actually be able to use the DOT parachains?

That’s the billion dollar question! Kusama parachains took around one-two months to be properly launched, some faster than others. Since they can onboard to Polkadot only from the end of December, realistically we’re looking at January-February.

Still, the Kusama testing must have served something! With most of the kinks ironed out, the teams having more experience etc. it’s quite possible that we’ll see the first parachains live in early January.

HydraDX November Update.

HydraDX’s team explains why they’ll sit the first round out, plus a few more project updates on their Omnipool.

Kusama reaches 1000 Validators

A referendum upped the number of active Kusama validators to a neat 1000.

Polkadot’s 4th birthday.

Polkadot is now 4 years old, starting from the first github commit on November 7, 2017.

Moonriver reaches 5M transactions

The milestone means that Moonriver is the most active Kusama parachain, so the team has high hopes for Moonbeam.

SubQuery on Moonriver

SubQuery’s deployment on the Moonriver Network will allow both Ethereum and Polkadot devs to query historical Substrate & EVM data with GraphQL.

All info in this newsletter is purely educational and should only be used to inform your own research. We're not offering investment advice, endorsement of any project or approach, or promise of any outcome. This is prepared using public information and couldn't possibly account for anyone's specific goals or financial situation. Be careful and keep up the honest work!

A guest post by
A techie passionate about (some) humanities. Former editor at Cointelegraph, DeFi enthusiast, self-taught programmer
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