About API3 (API3)
API3 (API3) is a collaborative project to deliver traditional API services to smart contract platforms in a decentralized and trust-minimized way. It is governed by a decentralized autonomous organization (DAO), namely the API3 DAO. Therefore, its code is open source and its operations are transparent. They are witnessing the birth of decentralized applications that are able to interact with the real world, which is immediately reflected in the value they capture. The most prominent example of this phenomenon is the recent surge of value flowing into DeFi (decentralized finance) with more than $8B total value locked in various applications as of September 2020 .
API3 (API3) A DeFi application typically requires asset prices to be delivered to its smart contract platform through a data feed . This data feed facilitates the application’s interaction with the real world, ultimately allowing it to provide meaningful services such as derivative exchanges and lending. What is unfolding right now is not only the rise of DeFi but the rise of decentralized applications that can meaningfully interact with the real world, and DeFi is only the tip of the iceberg.
API3 (API3) Businesses offer a wide variety of services over Web APIs, ranging from providing asset price data to executing traditional financial transactions. It is critical for de- centralized applications to be able to access the kind of services that Web APIs offer in order to interact with the real world, yet these APIs are not natively compatible with decentralized applications.
API3 (API3) Existing middleman-based interfacing solutions are centralized, insecure, and expensive; and are only being used for lack of a better alternative. With API3, They aim for the concept of an API to take the next evolu- tionary step to meet the inevitably strict decentralization requirements of Web 3.0 without employing third-party intermediaries. The will be using the term dAPI to refer to this new generation of decentralized APIs.
API3 (API3) Storage Key Points
|Circulating Supply||13,847,549.00 API3|
|Source Code||Click Here To View Source Code|
|Explorers||Click Here To View Explorers|
|Twitter Page||Click Here To Visit Twitter Group|
|Official Project Website||API3|
The vast majority of the external integrations that decentralized applications need are to commercial Web APIs that traditional businesses have built to monetize their data and services. Therefore, what is widely known as the oracle problem is in practice an API connectivity problem.
Existing oracle solutions fall short because they fail to make this distinction, resulting in inferior solutions that depend on third-party oracles and ecosystems that exclude API providers. By refining the definition of the problem, API3 aims to provide a much more optimal solution.
At its core, API3 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 application (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. Airnode is designed with mechanisms to remove the on-chain or off-chain concerns of API providers. The set-and-forget framework of Airnode is all about ease of implementation
API3: Decentralized APIs for Web 3.0
To eliminate these problems and have the API providers engage in the ecosystem further, API3 data feeds will be composed of first-party oracles operated by the API providers. This will be made possible by Airnode, a fully-server less oracle node that is designed to require no know-how, maintenance, or upkeep from the API provider. The resulting dAPIs will be cost-efficient and secure against attacks from an intermediate layer of third parties.
In the case of a malfunction, the dAPI user will be able to claim compensation up to a pre-negotiated amount from the staking pool. Kleros , an on-chain dispute resolution protocol, will be used to decide if the claim is to be paid out based on the presented evidence. This will incentivize stakers to actively participate in governance to ensure that dAPIs are being managed transparently and in a way that minimizes security risks. Successful governance—generating revenue from dAPIs while avoid- ing mistakes that will result in paying out insurance claims—will be rewarded in API3 tokens, which will create a positive feedback loop that will continually improve governance.
API Connectivity Problem
An application programming interface (API) is a well-standardized and documented protocol that is used to communicate with a specific application to receive services from it. These services may be in the form of receiving data or triggering an event. Applications can communicate with each other through their APIs, allowing them to be integrated to build more complex applications. Because of this, APIs are called the glue that holds the digital world together.
As a result of businesses using APIs to monetize their data and services, the con- cept of an API has transcended its initial meaning. The term no longer refers to the technical implementation of an interface, but to a full-fledged product that in- cludes the service it wraps . Global enterprises that provide APIs generate 25% of their organizational revenue from APIs on average .
Oracle Problem: A Source-Agnostic Misinterpretation
Decentralization defines Web 3.0, which is characterized by distributing computation and settling outcomes through predetermined consensus rules . The business logic of a decentralized application is implemented as a smart contract , which runs on a blockchain-based smart contract platform . Decentralization allows participants to cooperate without requiring mutual trust or a trusted third-party, and thus provides robustness against attacks and censorship.
To enforce consensus rules, smart contract platform nodes have to verify that each contract invocation has resulted in the correct outcome by repeating the computa- tion locally. For this to be possible, smart contracts can only operate on information that is accessible to and agreed upon by all smart contract platform nodes. In sim- pler terms, smart contracts can only operate on the information that is readily available in the blockchain, and cannot interact with the outside world directly. This is widely known as the “oracle problem”, referring to an idealized agent that can deliver an arbitrarily defined piece of truth to the blockchain.