Welcome to this week’s Wealth Mastery coin review. Today we’ll be looking at a new project working to upgrade the current Application Programming Interface (API) protocol. Preparing it for blockchain disruption by utilizing Oracles with what they’re calling dAPIs in anticipation of Web 3.0. So let’s begin digging into API3.
Introduction
API3 is developing a brand new approach to how programs connect and relay information on the blockchain. Decentralized applications need to access the same kind of services that traditional web APIs offer to interact with the real world. But, these APIs are not compatible with decentralized applications. With existing middleman based interfacing solutions being centralized, insecure, and expensive without a better alternative. With decentralized finance, there has been an increasing need for applications to receive data or trigger events using traditional web APIs. But, the generic oracle solutions fail to address the API connectivity problem. To begin fixing this issue, API3 will drive a collaborative effort to create a new generation of blockchain native, decentralized APIs, also known as “dAPIs”. With each dAPI composed of first-party oracles operated by API providers. This will create a more secure and cost-efficient alternative solution. As a result, the API3 Project will allow all smart contract platforms to leverage APIs for the building of meaningful applications in a decentralized and trust-minimized way.
In order for Oracles to enforce consensus rules, smart contract platform nodes have to verify that each contract invocation has resulted in the correct outcome by repeating the computation locally. For this to be possible, smart contracts can only operate on information that is accessible and agreed upon by all smart contract nodes. Meaning, smart contracts can only operate on the information that is 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. Another pervasive issue with interoperable Oracle solutions is that since they are low-level protocols, they regard the interface as a technical component and middleware, rather than a complete product. As a side effect, the governance of the interface gets left out. But, governance is not a trivial problem, because a decentralized interface only requires independent and competing parties to cooperate. The currently used solution is a trusted centralized entity to govern the interface, which is at odds with the main goal of decentralization. With the governing entity having full control over the output of an oracle network, this means decentralized oracle networks with centralized governance models are really just a centralized oracle with extra steps.
API3 is being developed as a collaborative effort to build, manage, and monetize dAPIs at scale. To achieve this in a decentralized way, the incentives of the participants will be reconciled through the governance, security, and value capture utilities of the API3 token. API3 will have a completely open and direct governance model, where any API3 token holder will be able to stake and get direct voting privileges in the API3 DAO. The staked API3 tokens will additionally back an on-chain…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
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