API3: Superglue of the Web 3.0 Ecosystem

about 3 years ago

If revenue from global enterprises like Expedia is largely comprised of API sales, then what is the potential for API’s in the new Web 3.0 economy?

As dApps are becoming more prevalent and continuing to provide multi-functional services in DeFi, there is an increasing need to have data triggered using traditional (Web 2.0) API’s.

For those non-techie folks like myself, API’s in short are a kind of standardized protocol that allow applications to communicate and efficiently integrate with each other to produce more marvelous creations!

Ecologically speaking you could think of API’s as the facilitating force for a type of synergy, where the sum of the parts eventually become greater than the whole.

Or in carpentry terms,

API’s would be the superglue that connects those seemingly ill-fitting board pieces together to make the chair and desk that you are sitting at right now (if they’re wooden).

Yet the issue we’re now facing in this new wonderful world web (Web 3.0), is that its underlying driving technology (smart contracts on blockchain) can not effectively interact with the legacy API’s.

As these traditional API providers are also not accustomed to blockchain, complications arise when running an oracle node requires transacting with cryptocurrencies.

This is where API3 comes in:

“With Airnode, API3 allows any API provider to make their services, that are already used and available in web 2.0, available for blockchain applications. This is why we refer to API3 as the Glue that is connecting the blockchain to the digital world”

Ugur Mersin: Social Media Manager API3

Decentralized API’s, or dAPI’s, are their solution to this which enable smart contracts to connect with real-world data. The means behind this is a decentralized network of first-party oracles that are operated by the API providers themselves.

Stakers within the network are primed to receive a portion of dAPI revenue, while dApps that have paid a subscription fee will gain access to dAPI’s.

So while there are currently decentralized oracle networks in the industry providing a similar service, they mostly employ third-party oracle solutions which consist of a somewhat redundant process at the oracle level.

Airnodes are the answer API3 has developed to eliminate many of these inefficiencies and complete the transition from third to first-party oracles.

According to the website, “Airnode is Web3 middleware that connects any web API directly to any blockchain application.”

This comprehensive communication with smart contract platforms are poised to put API3 ‘ahead of the curve’ in the Web 3.0 inter-operability race. Airnodes are also free to use and the revenue can be kept by providing dAPI’s to any blockchain.

API3 is DAO-governed and inherently open source. The native token is the same as its namesake, $API3.

For those looking to get involved with a low-risk, long-term approach, staking $API3 is the best way to do this as the insurance pool generates shares in the API3 DAO.

Below is the link to the app where you can start staking:

https://api3.eth.link/

The DAO itself includes some promising initiatives including:

• An API3 alliance- with other high-profile partners.
• A university- encouraging the advancement of education of their technology.

‘All-in-all’ API3 seems to have the right ingredients going for them to make a significant impact across the blockchain and cryptocurrency realm. Their vision seems clear as evidenced by the alliance, and university initiatives, and they have already planned out their second layer scaling solution with xDai.

What remains to be seen is how well the revenue model will deliver, as they’re still in the dreaded ‘pre-revenue’ stage. The USP (Unique Selling Proposal) though has wide-ranging implications, so assuming stellar execution from the API3 team, they should be ‘good-to-go’.