API3

Api3 is a decentralized oracle solution that provides secure, cost effective data feeds to dApps across various blockchain networks. It operates the OEV Network, which auctions off the right to determine the order of operations around data feed updates. This unique mechanism generates revenue, 80% of which is then paid directly back to dApps as OEV Rewards. Api3 data feeds are designed for seamless integration, working identically to traditional feeds without requiring dApps to modify their existing smart contracts, allowing projects to immediately begin earning revenue.

Api3 solves the critical problem of Maximal Extractable Value (MEV) exploitation that plagues dApps relying on traditional data feeds. MEV bots manipulate transaction order around data feed updates, leading to significant financial losses for decentralized applications. Api3's OEV Network acts as an antidote by auctioning off the privilege to determine the order of operations. This redirects Oracle Extractable Value (OEV) that would typically be captured by third parties, paying 80% of this revenue as OEV Rewards directly to the dApps, turning a vulnerability into a sustainable income source.

Api3 uniquely differentiates itself by directly paying dApps for using its data feeds through OEV Rewards. Unlike traditional oracle solutions, Api3 redirects Oracle Extractable Value (OEV), often captured by third parties, back to dApps, providing 80% of the revenue generated from OEV auctions. Additionally, Api3 offers data feeds at cost, prioritizing dApp benefit over its own profit from data provision. Its seamless integration, requiring no smart contract modifications, and extensive support across numerous EVM-compatible blockchain networks further set api3 apart as a user-centric oracle.

API3 eliminates third-party node operators entirely. While protocols like Chainlink use independent node operators between data providers and blockchains, API3 enables data providers to run their own Airnode oracles directly. This removes intermediary trust assumptions and attack vectors. First-party architecture also allows cryptographic verification of data provenance on-chain, whereas third-party models obscure original sourcing. The economic model differs fundamentally: API3 doesn't pay external node operators, reducing costs while aligning rewards with data providers and stakers.

The OEV Network converts oracle updates from cost centers into revenue streams. During liquidations, searchers bid for the right to update prices in MEV auctions. Previously, this value went to searchers/validators, but with OEV integration, proceeds return to the originating protocol. For example, lending protocols recapture 60-90% of liquidation MEV typically lost to external actors. This directly improves protocol treasury health and can reduce user fees. Integration requires minimal changes – just pointing to OEV-optimized proxies.

Security employs three layered approaches: 1) Source-level decentralization through multiple independent API providers per feed; 2) On-chain aggregation where each provider's response is recorded before median calculation; 3) Quantifiable collateral coverage where staked API3 tokens back service-level agreements. If data inaccuracies cause financial losses, users can file cryptographically proven claims against the collateral pool. This model provides verifiable security rather than subjective 'brand trust' assurances used by competitors.

Yes, via Airnode's 'set-and-forget' design. API providers deploy the serverless Airnode container through AWS/Azure with zero blockchain-specific configuration. The node auto-adapts to blockchain state changes and gas fluctuations. Integration uses Oracle Integration Specifications (OIS) mapping existing API endpoints to blockchain calls without code changes. Maintenance is minimal – API3 handles chain upgrades and edge cases. Businesses receive API call payments in stablecoins without managing crypto transactions.

The API3 DAO controls critical technical parameters through stakeholder voting: 1) Staking reward rates and inflation controls; 2) Collateralization ratios for service coverage; 3) Treasury funding for core development; 4) dAPI composition and provider approvals. Technical teams submit grant proposals for specific upgrades (e.g., OEV Network development), with milestones enforced through multi-sig payouts. This ensures development aligns with stakeholder incentives while preventing unilateral control by founding teams.