The research on API3 stems from the fact that it is a DAO, but API3 is still very unfamiliar to many people. Some people say that it will be the killer of ChainLink. API3 officially published an article to explain this rumor. Then, API3 What the hell is it? I am just starting to learn, and I have simply compiled a little information for your reference.
What is API3?
Before explaining API3, let’s take a look at what API is. The following explanation comes from Wikipedia:
Application Programming Interface (Application Programming Interface), abbreviated as API, is a type that defines the types of (call) or (request) that can be made, how to make calls or make requests, and the data format that should be used , Conventions to be followed, etc. It can also be provided so that users can expand existing functions to varying degrees in various ways. The API can be fully customized, specific to a component, or designed based on industry standards to ensure interoperability. Through, the API is implemented, allowing users to use the interface independently.
In other words, API can provide us with various services (applications, plug-ins, websites, APPs, etc.). Of course, it can also provide asset price data to be applied to financial transactions (this is why some people say it will Is the killer reason for ChainLink). For DAPP, it is particularly important to be able to access the services provided by the API to achieve interaction with the real world. However, these APIs do not have inherent compatibility with DAPP.
The goal of API3 is to allow the API to meet the needs of Web 3.0 decentralization without using third-party intermediaries. API3 achieves this goal through dAPI. API3 said that dAPI is a completely decentralized blockchain native API, which is constructed, managed, guaranteed and profitable by API3 DAO. Click to read its white paper.
Gordion knot and oracles dilemma
API3 tells us an ancient legend. Alexander arrived in Gordion, where he met the late King Midas of Phrygia. He tied an ox cart to a pillar to greet him and “telled” him: if who would untie him With this knot, this person will become the ruler of Asia. After hearing this prophecy, Alexander tried to untie the knot, but was unsuccessful. Finally, he cut the knot in half with a sword, and then turned the prophecy into reality.
API3 applies this philosophy to oracles. They believe that the oracle technology in the blockchain world should have eliminated middlemen, but in fact, most of the oracles are just replaced by other middlemen. The dilemma is manifested in:
- The API services available on the blockchain are provided by third-party oracle node operators, and these operators are personally selected by a centralized management agency (meta-middleman);
- The realization of current oracles relies on third-party oracles, and these oracles are operated by entities that do not own the data or services they provide. API3’s solution is to cut off the Gordion knot and directly use the “first party oracle”, an oracle operated by the API provider.
Based on these dilemmas, API3 applies the philosophical enlightenment of the Gordion knot to the oracle. API3 lists the differences between API3 and the current oracle in the solution:
The aggregator of the existing decentralized oracle is managed centrally and does not include the source API in its management scope
dAPI is composed of first-party oracle nodes and manages its data feed through DAO
API3 operation logic
The above schematic diagram still does not specifically explain how API3 runs. The following figure briefly introduces the operating logic of API3:
There are four roles:
- dAPPs: service users;
- Pledger: Managers, guarantors, and pledgers pledge API3 tokens to the pledge pool managed by API3, provide insurance money, and obtain API3 DAO governance rights and API subscription fee sharing;
- API3 DAO: manage API source, manage pledge pool;
- API provider: Provide API data for API3 DAO
Briefly explain its business process:
- The pledger pledges API3 tokens to the pledge pool, provides insurance money for the pledge pool, and obtains the governance rights of API3 DAO
- API3 DAO selects high-quality service providers from many API providers to enter the aggregator
- dAPP subscribes to the dAPI service, pays the subscription fee, obtains data or services, and the pledger obtains the subscription fee share
- If there is a problem with API data (fake or other), dAPP can obtain insurance claims from the mortgage pool, and the pledger pays the price
Several obvious features:
- API service providers directly play the role of oracles, which reduces intermediary links to a certain extent and makes data services smoother and real-time
- The credibility of API data is provided and guaranteed by the DAO composed of pledgers. Once there is a problem, API users (dAPPs) can obtain claims
- The role of the pledger has become the object of power and responsibility, weighing the game of reward and responsibility
Some possible problems:
- DAO governance dilemma, DAO governance is not as simple as imagined in the process. Real issues such as the number of participants, voting rate, voting mechanism design, and voting quality (51% attack) will all be the challenge points of this model;
- Lack of constraints and punishment mechanisms for API providers;
- Can the claim amount compensate for the losses suffered by dAPP as a result
API3 DAO
In order to realize the decentralized governance of dAPI and the entire project, API3 is governed by DAO. The governance is completely decentralized and open, and all stakeholders can directly participate in the governance of the project. In addition, the legal entity governed by API3 DAO is a Cayman Islands foundation: API3 Foundation Limited Company.
The main mission of API3 DAO is:
- Vote for API service provider
- Management agreement, including modification, upgrade, etc.
- Handling disputes and claims
- Manage some API3 tokens
API3 token
API3 token is not only the governance token of API3 DAO, but also the pledge token of the pledge pool.
API3 believes that decentralized governance needs to establish a balanced incentive mechanism, or that the entities it manages should be rewarded for good results and punished for bad results. API3 tokens achieve this goal in three main ways:
- Pledge: the income generated by voting on dAPI and inflation rewards
- Collateral: Support insurance services that protect users from dAPI failures
- Governance: Governance of API3 DAO
Staking provides economic incentives for participating in API3 and promoting income behavior; collateral allows participants to share the operational risks of API3 and encourages them to minimize them; governance provides participants with the ultimate realization path for formulating these incentives.
API3 token distribution
Lock up
Token lock-up and release schedule
- Founder: locked up for 2 years, 6 months release period
- Partners and contributors: locked up for 2 years, 6 months release period
- Seed investors: locked up for 2 years
- Early investors: locked up for 2 years
- Public offering: no lock-up
- Ecological Fund: exercised by DAO
All tokens that need to be locked will be released block by block in a linear manner.
This initial DAO will be migrated to after the development is complete. With the release of the official version of the DAO, the pledge rewards will be launched, at which time all token holders can participate in governance.
Use of token sale funds
API3 DAO will provide grants to DAO Bank and determine the overall direction of the project. These grants will be used to implement one-time expenditures or ongoing operating expenditures that benefit the API3 project.
dAPI operating costs
API3 DAO will operate dAPI and pay its operating costs, including GAS fees and API provider compensation.
Public Offering Information
API3 will launch a public offering on Mesa DEX from November 30th to December 14th. The details are as follows:
- Starting at 2 p.m. on November 30 (CET)
- 2 p.m. on December 14 (or the total quota is claimed) (CET)
- Held on Mesa DEX
- 20,000,000 API3 will be released, accounting for 20% of the total supply
- The initial price is $0.30, and the price cap is $2.00
- Proceeds and unsold tokens will enter API3 DAO
Mesa DEX
This token issuance will use DXdao’s, which is a DEX based on. API3 stated that the batch auction mechanism provided by the Gnosis protocol can achieve fair token launch, because it limits typical issues such as front-end operation and gas fees during the token issuance process of AMM-based DEX. In addition, API3 stated that it will soon publish a detailed tutorial on how to obtain API3 tokens on Mesa.
Joint curve
API3 will use a logit-shaped bonding curve to distribute its API3 tokens. The initial price is $0.30 (the price offered to institutional investors) and the maximum price is $2.00. Unsold tokens at the end of the issuance period will be returned to DAO Bank.
Related Links
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