First-party oracles are the next-generation technology to access off-chain data. API3 is leading the movement from legacy third-party oracle networks to first-party oracle solutions that deliver more security, efficiency, and data-source transparency.
The first part of the research will offer a basic review of Oracle before digging into API3: For example, a smart contract requires off-chain data to enforce its agreement but neither the blockchain nor the smart contract can access it. So now we need a third-party service that acts as a bridge between the blockchain and the outside world. This is the essence of the oracle.
Source: Chainlink
API3 Provides a solution called dAPI. DAPI is a decentralized approach for providing a conventional API service to smart contracts that is both safe and cost-effective. It is made up of the following components:
API3 will connect decentralized applications with the abundant data and services offered by traditional Web APIs, thereby expanding the applicability of the blockchain without sacrificing decentralization. This will be achieved by dAPI—fully decentralized and blockchain-native APIs—which will be set up, managed, and monetized at scale by the API3 DAO.
Without third-party node operators, API3 data feeds are never exposed to data tampering and denial of service attacks by middlemen. This enables them to reach higher cost-efficiency while having fewer attack surfaces. Source-level decentralization of dAPIs is enabled by Airnode, a fully serverless oracle node that can be deployed by any API provider for free, and requires minimal day-to-day management.
The most important one among these is security. dAPIs do not depend on third-party oracles, which are a constant and significant risk factor in the alternative solutions. In addition, the dAPI insurance service provides quantifiable and trustless security guarantees to its users, further cementing API3’s place as the most secure solution to receiving API services as a decentralized application.
Decentralized APIs or dAPIs for short, are networks of API provider-operated first-party oracles that are governed in a decentralized way. In contrast, decentralized interoperability solutions consist of an oracle network of third-party middlemen governed by a centralized entity, which is necessitated by their under-specified problem definition.
Enhance transparency, lower the danger of third-party data manipulation, eliminate the need for middlemen, and increase income for API providers by aggregating data directly from first-party suppliers.
At its core, Airnode brings the ability for API providers to easily run their own oracle nodes. This allows them to provide their data on-chain, without an intermediary, to any decentralized app (dApp) interested in their services.
At the heart of this mechanism sits Airnode, an open-source oracle node. It’s designed to be easily deployed by any API provider with almost no maintenance. Because of Airnode, dApp developers can write smart contracts to interact with the on-chain data of API providers.
First-party oracles are integral to the API3 solution. This means each API is served by an oracle that is operated by the entity that owns the API, rather than a third party.
To decentralize the governance of both dAPIs and the project as a whole, API3 is governed by a DAO. The governance is entirely decentralized and open, meaning
that all stakeholders are able to participate in the governance of the project directly. Decentralized governance necessitates well-balanced incentive mechanisms that accurately model both positive and negative outcomes. In other words, the governing entities should be rewarded for good results and penalized for bad ones. The API3 token is designed to facilitate this through three main utilities:
Staking: Grants dAPI revenue and inflationary rewards.
Collateral: Backs insurance services that protect users from damages caused by dAPI malfunctions.
Governance: Grants direct representation in the API3 DAO.
Note that it is critical for these three utilities to coincide. All governing entities must receive staking rewards for them to govern in a way that maximizes usage. All governing entities must have their funds used as collateral for them to govern in a way that minimizes security risks. To this end, API3 will have a single staking pool. Staking API3 tokens in this pool will grant presentation and staking rewards, but at the same time, the staked tokens will be used as collateral to pay out insurance claims as needed.
API3 token had listed many exchanges and DEX. So you can trade API3 at some exchange with real big volume: Binance, Coinbase, Uniswap, Houbi, Gate, Kucoin…
The initial supply of API3 is 100,000,000 tokens with the scheduled distribution of API3 tokens as follows:
The API3 token is used as a governance token, payment token, and fee-earning token. Its primary function is to align incentives between various stakeholders in the API3 protocol and facilitate smooth operations.
API3 is also a work token, which is required by dapp platforms to pay for the consumption of data feeds. Last but not least, API3 tokens can be staked in an insurance module by tokenholders to receive a pro-rata share of the protocol staking rewards in exchange for taking on the risk of API malfunctions.
Within the fragmented ecosystem that Web3 is right now, interoperability is a key purpose in an effort to make progress. Blockchain oracles are a elementary a part of the so-called Web3 ecosystem, as they may also help obtain this purpose. Their function is to mediate between numerous blockchains and knowledge sources that lie past them.
API3 has crossed the mark of 40.2K Followers on Twitter.
API3 will connect decentralized applications with the abundant data and services of-fered by traditional Web APIs, thereby expanding the applicability of the blockchain without sacrificing decentralization. This will be achieved by dAPIs—fully decentralized and blockchain-native APIs—which will be set up, managed and monetized at scale by the API3 DAO.
Find more information about:
Website: https://api3.org/
DAO – http://api3.eth.link
Discord – https://discord.com/invite/qnRrcfnm5W…
Forum – http://forum.api3.org
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
DISCLAIMER: The Information on this website is provided as general market commentary, and does not constitute investment advice. We encourage you to do your own research before investing.
Alan
Coincu Ventures
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