The decentralized cloud computing ecosystem built on Polkadot and Kusama networks continues to evolve, with Khala Network—the canary network of Phala Network—announcing a significant upgrade to its Kusama parachain auction strategy. This update aims to boost community participation, enhance incentives for KSM stakers, and strengthen the network’s competitiveness during the critical crowdloan phase.
Enhanced Reward Structure for KSM Stakers
On June 25, 2021, at 21:00 Beijing time, Khala officially revealed an upgraded incentive model for contributors supporting its Kusama parachain slot bid. The new structure increases both base and tiered rewards to attract more decentralized support.
- Base reward increased by 20%: Contributors now receive 120 PHA per 1 KSM staked (a KSM:PHA ratio of 1:120), up from the previous 100 PHA.
- Tiered bonus at 30,000 KSM threshold: If total contributions surpass 30,000 KSM, the reward escalates to 150 PHA per KSM (1:150 ratio)—a 50% increase over the original base.
These incentives apply to all participants in the crowdloan and will be distributed automatically upon successful parachain lease acquisition.
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At the time of reporting, Khala had already secured over 20,790 KSM through its crowdloan campaign. With an updated annual percentage yield (APY) exceeding 45%, the project presents one of the most attractive returns in the current Kusama ecosystem.
Introduction of Exclusive NFT Rewards
In addition to token incentives, Khala has introduced a novel NFT-based recognition system to honor long-term supporters. Users who contribute more than 1 KSM from a single account will receive a special Khala Honor Gem NFT as a digital collectible.
This move not only adds a gamified layer to participation but also fosters stronger community engagement by offering permanent, verifiable recognition on-chain. Each Honor Gem is unique and serves as a badge of early support for the Khala network.
Such integrations reflect broader trends in Web3 adoption, where projects combine financial incentives with digital identity and ownership through NFTs, enhancing user retention and emotional investment.
How to Participate in the Khala Crowdloan
Supporting Khala’s parachain bid is straightforward and accessible through multiple non-custodial and custodial platforms. Contributors can lock their KSM via:
- Khala’s official Crowdloan portal
- Integrated wallets such as Math Wallet, Polka.js, imToken, TokenPocket, Atoken, and Nutbox
- Centralized exchanges including OKEx, KuCoin, Kraken, MEXC, and Newland
All contributions are securely recorded on the Kusama blockchain, ensuring transparency and decentralization. Upon completion of the lease period, staked KSM will be returned to users regardless of whether Khala wins the slot—only the winning bid locks tokens for the duration of the lease.
It's important to note that even if Khala does not secure a slot in this round, contributors still retain eligibility for partial PHA rewards based on participation duration and amount.
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Understanding Khala’s Role in the Polkadot Ecosystem
Khala operates as a canary network for Phala Network, mirroring functionality on Kusama before deployment on Polkadot. It leverages Trusted Execution Environments (TEEs) to deliver scalable, private cloud computing services for decentralized applications.
Unlike traditional cloud providers, Khala enables computation on encrypted data without exposing sensitive information—even from node operators. This makes it ideal for use cases involving identity verification, financial analytics, healthcare data processing, and confidential smart contracts.
By securing a parachain slot on Kusama, Khala gains continuous block production rights, enabling stable service delivery and long-term development planning.
Core Keywords Driving Visibility
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- Khala Network
- Phala Network
- Kusama parachain auction
- KSM crowdloan
- PHA token reward
- TEE-based cloud computing
- Web3 infrastructure
- NFT reward for staking
These keywords reflect high-interest topics among crypto investors, developers, and Web3 enthusiasts exploring next-generation blockchain scalability and privacy solutions.
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Frequently Asked Questions (FAQ)
What is the difference between Phala Network and Khala Network?
Phala Network is the main privacy-preserving cloud computing platform deployed on Polkadot, while Khala Network serves as its canary version on Kusama. Khala tests new features and upgrades in a live environment before they are rolled out to Phala.
How are PHA rewards calculated during the crowdloan?
Rewards are distributed based on the amount of KSM contributed. At launch, the rate was 120 PHA per KSM. If total contributions exceed 30,000 KSM, all participants benefit from an increased rate of 150 PHA per KSM.
When will I receive my PHA tokens and NFT?
PHA rewards and Honor Gem NFTs will be distributed after Khala successfully wins a parachain slot. Distribution occurs automatically via the crowdloan system.
Can I unstake my KSM during the auction?
No—once KSM is locked in the crowdloan, it remains bonded until the end of the lease period if Khala wins. If unsuccessful, KSM is released immediately.
Is there any risk in participating?
The primary risk is opportunity cost—your KSM cannot be traded or used elsewhere during the lease term (typically 48–96 weeks). However, principal KSM is always returned after the lease expires.
Does using a centralized exchange affect my rewards?
No—exchanges participating in the crowdloan pass through full rewards to users. However, NFT distribution may require manual claiming or wallet-based participation depending on the provider.
Final Thoughts
Khala’s strategic upgrade reflects a deeper understanding of community-driven fundraising dynamics within the Polkadot and Kusama ecosystems. By combining enhanced tokenomics with symbolic NFT recognition, the network strengthens both economic and social layers of decentralization.
As competition intensifies among parachain candidates, projects like Khala demonstrate that sustainable growth stems not just from technology—but from meaningful alignment between builders and users.
For developers building privacy-first dApps and investors seeking high-yield opportunities in Web3 infrastructure, Khala represents a compelling intersection of innovation, incentive design, and real-world utility.