What Is API3?
API3 is a native token of the API3 network — a DAO-governed solution combining an oracle functionality, which provides real-world data access on the blockchain, and APIs through which this data is received. API3 was presented to the public in late 2020 when its whitepaper was published, followed by API3 token public sale.
The growing number of dApps, especially those which can be classified as DeFi applications, require an easy way to get live data feeds from outside the chain, e.g. asset prices. Oracles and API are the two pieces of technology needed to make this work. Various organizations provide APIs, but using them means introducing the middleman into the flow of operations, which goes against the blockchain’s key principle of decentralization. Using a third-party oracle means, again, relying on a middleman; besides, contemporary oracles are often too universal, treating all data the same, no matter what its source — which is not always wise. API3 aims to solve this problem by building a network of decentralized APIs, provided to the dApp developers as a service. Those APIs are operated by the same nodes that comprise the oracle network, which keeps both components providing off-chain data as one solution. API3 token is at the heart of this system: it can be staked to secure the oracle, used for governance, and as fees within the network.