API3: Is It A Good Buy?

Last Updated May 18th 2022
5 Min Read

Move over Chainlink; consider investing in API3 ecosystem to be a part of blockchain technology’s future.

Decentralized Autonomous Organizations (DAOs) are an increasingly common way of providing hands-off governance for blockchain projects, and one of the projects recently in the spotlight is API3.

The API3 protocol aims to tackle the Blockchain Oracle problem and find a way to connect the various APIs of data providers. The approach of building a decentralized API network (dAPI) has drawn attention to the project. It has also been called the 'Chainlink Killer,' bringing additional hype to the project. 

So is API3 a good buy? Find out more about the protocol and its services to make an informed buying decision.

API3: An Overview 

With the digital revolution gaining ground globally, the blockchain economy is expanding rapidly. Blockchain technology has been the backbone for decentralized finance (DeFi), supply chain management, etc. The team behind the API3 project says it has never been more critical for smart contracts to provide "timely, reliable real-world data."

Advanced Encryption Standard 13, also known as API3, is an encryption algorithm used in the crypto industry. The API3 project aims to decentralize application programming interfaces (APIs) to build, manage, and monetize APIs at scales. 

API3 is considered more secure than AES and is currently being used by a number of organizations and companies in the crypto industry, including Microsoft, Google, and Facebook. Its main objectives are to provide a more secure encryption algorithm and help transition the crypto industry to newer technologies. It is also being considered for use in future versions of the Bitcoin protocol, making API3 a good buy in 2022.

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API3: Pros 

Blockchain Oracle Problem 

API3 solves several issues by finding a more efficient way of bringing data to blockchain’s smart contracts. The biggest contribution of API3 is that it solves the Blockchain Oracle Problem, which focuses on using oracles. While they have helped bring off-chain data to the blockchain, oracles are still third-party technology, making them an additional cost for the network. Furthermore, they are offered by specific projects, such as Chainlink, which makes them centralized.

API3 solves this by enabling API providers to operate their own nodes. The solution is simple, but it could be a major game-changer in the API world.

The project also enables decentralized APIs, which provide superior data transparency all the way to the factual data source level. In comparison, oracles do not consider the data source API to be within the scope of their solution. These factors make API3 a good buy in 2022.

Reliable Real-world Data 

APIs are known to play a significant role because they supply blockchains with off-chain data as, without it, the decentralized ledgers would not have a clue about how many coins should actually be worth.

In order to set apart API3 from the rest of them, the team explains how decentralized APIs can provide much more data transparency all the way to the factual data source level, which actually do not consider the data source API to be within the scope of their so-called solution.

The API3 offers a unique solution called Airnode. It is deployable on-chain and requires little onboarding for the API provider. The API3 team is able to assist, making the addition easy. The data is live on-chain and available to anyone who wishes to call it. There are no nodes required, no need for incentive costs, and no added attack vectors. 

These unique offerings have helped affirm the tremendous growth potential of this crypto project, making API3 a good buy. 

Read Also: Could API3 Be A Millionaire-Maker Coin

API3 Tokenomics 

API3 uses a decentralized autonomous organization (DAO) for its governance, which means every participant in the ecosystem will have their own say in the development and security of the network. As a result, the API3 token plays an essential role in staking, governance, collateral, and payments. 

Governance, specifically decentralized governance, seems to be a requirement of any blockchain project these days. API3 has that covered as it plans on following a DAO governance model. This factor adds more value to the tokens, making API3 a good buy in 2022 and beyond. 

Don't Miss: API3 Coin Price Predictions

API3: Buy? Hold? Sell? 

As blockchain usage grows and developers build more novel and complex use cases, the dApps created will also need better ways to interface with third-party data sources. The existing Oracle solutions are functional. However, there have been compromises made in their design that could lead to serious problems as the solutions need to scale. 

The solution from API3 that enables the API providers to operate the Airnode oracle would give us interoperability with third-party services in a decentralized manner. And it also ensures that the API providers are incentivized to provide trusted, high-quality data. 

Unless something superior comes along, it appears that API3 is bringing a powerful solution to the problem of connecting traditional API services and decentralized blockchain technology. It is certainly too early to determine if API3 will be the solution to the oracle problem, but things do look very promising in these early days.  

For all the above reasons, crypto experts believe API3 is a good buy in 2022 and beyond.

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