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Decentralized API in the WEB3.0 world

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The goal of API3 is to allow APIs to meet the needs of Web 3.0 decentralization without using third-party intermediaries

Original title: "In-depth understanding of decentralized API services: API3"

Original source: DAO Square

For API3 The research 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. So, what exactly is API3? Stuff? I am also just starting to learn, and I simply summarized a little information I have learned for your reference.

——Typto

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 computing interface that defines the communication between multiple software intermediaries Interaction, and the kinds of calls or requests that can be made, how to make calls or requests, the data formats that should be used, the conventions that should be followed, etc. It can also provide an extension mechanism so that users can extend existing functions to varying degrees in various ways. APIs can be fully custom, component-specific, or designed based on industry standards to ensure interoperability. Through information hiding, the API enables modular programming, allowing user implementations to use the interface independently.

That is to say, the API can provide us (applications, plug-ins, websites, APPs, etc.) with various Of course, it can also provide asset price data to be applied to financial transactions (this is why some people say it will be the killer of ChainLink). For DAPPs, it is particularly important to be able to access the services provided by APIs to interact with the real world. However, these APIs are not inherently compatible with DAPPs.

The goal of API3 is to allow APIs to meet the needs of Web 3.0 decentralization without using third-party intermediaries. API3 achieves this goal through dAPI, API3 said, dAPI is a completely decentralized blockchain-native API, which is built, managed, secured and monetized by API3 DAO. Click here to read its white paper.

The Gordion Knot and the Oracle Dilemma

API3 tells us an ancient legend, Alexander arrived in Gordion, where he met Midas, the late King of Phrygia, who brought Bullock carts tied to posts greeted him and "told" him: whoever untied the knot would become the ruler of Asia. Alexander heard the prophecy, tried unsuccessfully to untie the knot, and finally cut the knot in half with his sword, and made the prophecy a reality.

API3 applies this philosophy to oracles. They believe that the oracle technology in the blockchain world should remove the middle merchants, but in fact, most oracle machines 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 in turn managed by Centralized management agency (meta-middleman, meta-middleman) hand-picked;

Current oracle implementation relies on third-party oracle machines, and these oracle machines do not own the data or services they provide Physical operations. The solution of API3 is to cut off the Gordion knot and directly use the "first-party oracle machine", which is an oracle machine operated by the API provider.

Based on these dilemmas, API3 applies the philosophical inspiration of Gordion knot to the oracle machine, API3 lists API3 and the current oracle machine Differences in solutions:

Existing aggregators of decentralized oracles are managed centrally and do not include source APIs within their scope of management

dAPI by first party Oracle nodes are composed and their data feeds are managed by DAO

Operation logic of API3

The diagram above still does not specifically explain how API3 operates. The following figure briefly introduces the operation logic of API3:

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There are four roles here:

dAPPs: Service users;

Pledgers: managers, guarantors, pledgers pledge API3 tokens to the pledge pool managed by API3, provide insurance money, and obtain API3 DAO

API3 DAO: manage API source, manage pledge pool;

API Provider: Provide API data for API3 DAO

Briefly explain its business process:

Pledgers pledge API3 tokens to the pledge pool, provide insurance money for the pledge pool, and obtain the governance rights of API3 DAO

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API3 DAO selects high-quality service providers among many API providers to enter the aggregator

dAPP subscribes to dAPI services, pays Subscription fee, access to data or services, pledgers get subscription fee share

If there is a problem with the API data (false or otherwise), dAPP can get it from the mortgage pool Insurance claims, the pledger pays the price

Some obvious features:

The API service provider directly acts as the oracle machine, which reduces the intermediary links to a certain extent and makes the data service more smooth and real-time

The credibility of the API data is provided and guaranteed by the DAO composed of pledgers. Once a problem occurs, API users (dAPPs) can obtain compensation

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, the number of participants, turnout rate, voting mechanism design, voting quality (51% Attacks) and other practical issues will be the challenges of this model;

Lack of constraints and punishment mechanisms for API providers;

Whether the compensation amount can compensate the losses suffered by dAPP?

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 Project governance. Additionally, the legal entity governed by API3 DAO is a Cayman Islands foundation: API3 Foundation Limited Company.

The main mission of API3 DAO is:

Voting for API service provider

Management agreement, including modification, upgrade, etc.

Handle disputes and claims

Manage some API3 tokens

API3 tokens ;

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 Rewarded for good results and penalized for bad results. The API3 token does this in three main ways:

Staking: Voting dAPI generated revenue and inflation rewards

Collateral: Backing insurance services that protect users from dAPI failure losses

Governance: Governance of the API3 DAO Rights

Staking provides an economic incentive to participate in API3 and drive revenue; collateral allows participants to share API3’s operational risk and incentivizes them to minimize it; governance provides participants with the ultimate path to develop these incentives.

API3 Token Allocation

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Lock

Token lockup and release Timetable

Founder: 2-year lockup, 6-month release period

Partners and contributors: 2-year lockup, 6-month release period

Seed investors: 2-year lockup

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Early investors: lock up for 2 years

Public offering: no lockup

Ecological Fund: Allocated by DAO

All tokens that need to be locked will be freed block-by-block in a linear fashion.

This initial DAO will be migrated to after the official version of DAO is developed. With the release of the official version of The DAO, staking rewards will kick in and all token holders will be able to participate in governance.

generation

Project Development Fund

API3 The DAO will provide grants to the DAO Bank and thus 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 program.

Operating Cost of dAPI

API3 DAO will operate dAPI, And pay for its operating costs, including gas fees and compensation for API providers.

Public offering information

API3 will The public offering will be launched on Mesa DEX from November 30th to December 14th, and the details are as follows:

Starting at 2 pm on November 30th (CET)

2pm on December 14th (or the total quota is claimed) (CET)

Hold on Mesa DEX

20,000,000 will be released API3, 20% of total supply

Initial price is $0.30, price cap is $2.00

Proceeds and unsold tokens will go to API3 DAO

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Mesa DEX

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This token offering will use DXdao's Mesa, which is a DEX based on the Gnosis protocol. API3 stated that the batch auction mechanism provided by the Gnosis protocol can achieve a fair token launch, because it limits the typical problems such as front-end operation and gas fees during the token issuance process of an AMM-based DEX. In addition, API3 said that it will soon release a detailed tutorial on how to get API3 tokens on Mesa.

Joint Curve

API3 will distribute its API3 Tokens using a logit-shaped bonding curve. Its initial price will be $0.30 (the price offered to institutional investors), with a maximum price of $2.00, and unsold tokens will be returned to the DAO Bank at the end of the offering period.