Smart contracts often struggle to access dependable data, but application programming interfaces (APIs) have been touted as a solution to this problem. API3’s stated goal is to allow decentralized versions of APIs to be built, managed and monetized at scales. As blockchain technology plays an ever bigger role in the economy — from decentralized finance to supply chain management — the team behind this project says it has never been more important for smart contracts to provide “timely, reliable real-world data.”
The whitepaper for API3 Defi Coin was unveiled in September 2020 and set out the main problem that’s associated with APIs at present: connectivity. At present, there’s no way for smart contracts to establish a direct connection with APIs for the latest data — and this has led to an explosion in the popularity of oracles.
Although this has helped solve the problem to some extent, the industry has since been grappling with the “Blockchain Oracle Problem.” Oracles are a form of middleware that sit in between APIs and smart contracts — increasing costs and centralization. API3 intends to get around this problem by enabling API providers to operate their very own nodes. API3’s token went live at the start of December following on from a token sale that generated tens of millions of dollars.
API3 Defi Facts
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Who Are the Founders of API3?
Three people have come together to bring API3 to life. The first is Heikki Vanttinen, who has written extensively about the project and what it hopes to achieve. He previously worked as founder and CEO at CLC Group, a blockchain lab “developing real-world connected smart contract solutions for a more trustless, efficient and secure future.” Vanttinen also served as chief marketing officer at Zippie, a mobile operating system that aims to help blockchain technology achieve mainstream adoption.
Vanttinen has been joined by Burak Benligiray. He also worked at CLC Group, serving as CTO. Benligiray has previously written posts highlighting the merits of ChainAPI, which serves as the integration platform for API3. This has been described as the “spiritual successor” to Honeycomb, which was one of the innovations that had been pursued by CLC Group.
And last but by no means least, the third co-founder at API3 Defi Coin is Saša Milić. As well as serving as a sessional lecturer at the University of Toronto, where she taught core curriculum courses to computer science students, she’s also worked as a software engineer for Facebook, and as a simulation data scientist for Gauntlet.
The Governance Token of the API3 DAO
API3 is the native token of the project. It gives its holders the right to take part in the governance of the ecosystem through the DAO. To generate shares in the DAO, token holders have to stake the tokens into the insurance pool, which also gives them access to weekly staking rewards.
Insurance staking pool
By staking your API3 Defi Coin tokens into the insurance staking pool, you take part in providing users with quantifiable security guarantees in the form of insurance. Insurance staking pool funds are used to cover potential financial losses from dAPI malfunctions that the dAPI consumer might incur. As you stake to the insurance pool, you generate shares in the DAO.
What Makes API3 Unique?
In the world of blockchain and crypto, they all too often hear about projects that are aiming to bring this technology to established industries such as real estate and finance. One of the most compelling attributes of is how it’s aiming to fix some of the problems that have emerged within the blockchain space itself.
API3 Defi Coin are crucial because of how they supply blockchains with off-chain data — without it, these decentralized ledgers wouldn’t have a clue about how much coins should be worth.
In setting out why is unique, Vanttinen explained how decentralized APIs can “provide superior data transparency all the way to the factual data source level, compared to existing decentralized oracles, which do not consider the data source API to be within the scope of their solution.”
Light and robust middleware called Airnode has been created to make a reality — and the distinctive qualities of this tool concern how it can be deployed in minutes, enhancing transparency and substantially reducing transaction fees in the process.
Decentralized, Secure, Interoperable
dAPIs are networks of first-party, API provider operated oracles with decentralized governance.
Decentralized to the core
API3 data feeds are governed by an open DAO of stakeholders, industry experts and project partners. This allows dAPIs to be operated with maximal transparency, minimal required trust in centralized operators, and no centralized attack surfaces. API token holders can take a direct part in governing the project by staking API3 tokens into the insurance staking contract, which grants them shares in the DAO.
Nodes operated by API providers
Without third-party node operators, API3 Defi Coin 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.
Decentralized safety net
API3 Coin provides dAPI users with the option of on-chain insurance, powered by the API3 token and Kleros’ decentralized courts. API3’s insurance feature gives dAPI users a quantifiable safety net in the event of a malfunction, holds the API3 DAO directly responsible for the security of the dAPIs and incentivizes a security-first governance approach for dAPIs and the API3 project as a whole.
Connectable to any blockchain
As a multi-layer, cross-platform data solution, dAPIs can be bridged to any blockchain, in order to provide smart contracts on various platforms with reliable access to premium real-world data. The ’s cross-platform approach enables any smart contract platform to leverage API3’s ecosystem of dAPIs and data-integration tools by simply creating a bridge between API3 Coin and the network.
How Is the API3 Network Secured?
API3 is an ERC-20 token, meaning that it’s based on the Ethereum blockchain.
Where Can You Buy API3 (API3)?
One of the most popular exchanges where API3 Coin can be purchased include Uniswap, where it is paired with Wrapped ETH. It’s also available against UDST on Huobi Global and KuCoin, and paired with ETH on OKEx and 1inch.