API3 Raises $3M to Solve the Blockchain API Connectivity Problem
Lead by Placeholder with participation from Pantera, Accomplice, CoinFund, Digital Currency Group, Hashed, and more, the project is launching a network of decentralized API’s managed by decentralized governance
GRAND CAYMAN–(BUSINESS WIRE)–November 12, 2020–
API3, a decentralized API (dAPI) network that enables data providers to become their own blockchain ‘oracles,’ has closed $3M in a private fundraising round lead by Placeholder and with participation by Pantera, Accomplice, CoinFund, Digital Currency Group, Hashed, and more. When live, API3 will enable off-chain API data and service providers to connect their APIs to the blockchain without the use of any middlemen.
An Application Programming Interface, or API for short, is an incredibly common protocol in web and mobile applications that enables them to interact with one another, sharing data and services. However, real-world businesses cannot interact with blockchain applications because those applications can only interact with information that is accessible to and agreed upon by all nodes in the network. Until now, ‘Oracles’ solved this issue by acting as a centralized third party, introducing vulnerabilities, costs, ineffective redundancies, and a lack of transparency.
API3 proposes to solve this API Connectivity Problem through the new paradigm of ‘decentralized APIs’ composed of ‘first-party oracles’. Allowing the traditional API provider businesses to become their own oracles with no third-party middlemen means that they will be able to monetize their services cost-efficiently, securely and with control of how their data will be used. Decentralized APIs, which are networks of these first-party oracles that are governed decentrally by the API3 DAO, will provide optimal trust-minimization.
“Crypto’s largest oracle system by network value, Chainlink, is composed of data-reselling middlemen, where the source and quality of data are suspect,” said Chris Burniske, Partner with Placeholder. “While heavily marketed, Chainlink isn’t well enough designed or maintained to remain a long term solution for crypto or DeFi’s information needs, and those that rely on Chainlink do so at their own users’ risk. Enter API3.
“With its Airnode design, API3 makes it seamless for primary data providers to pipe their information into cyptonetworks with zero blockchain expertise. That means the reputation and quality of existing data providers can carry into cryptoland, simultaneously allowing these entities to turn a profit from crypto participation. Furthermore, API3’s organizational DAO structure provides a framework for truly decentralized on-chain data feeds, which the team calls dAPIs.”
“We couldn’t be more excited about the team of investors that have decided to back API3 as we work towards solving the blockchain API Connectivity Problem, which is a key challenge for our whole space,” said Heikki Vänttinen, Co-Founder of API3. “We are confident that the API3 solution will not only enable smart contract developers to build applications that might have been previously unthought of, but also provide API providers with a more direct, transparent and incentive-aligned way of selling their data and services to Web 3.0. It is our honor to work on this with some of the most well-known investors and thought-leaders in our industry, led by Chris Burniske’s Placeholder.”
To manage the decentralized dAPI network, and to improve upon the current standards of decentralization and trust-minimization employed in the governance of existing oracle solutions, dAPIs composed by API3 will be fully and transparently governed by a Decentralized Autonomous Organization (DAO) of dAPI consumers, service providers, industry experts and partners.
API3 has raised $3M in its initial fundraising round to support tech development and growth of their ecosystem. The round was also supported by Solidity Ventures, Equilibrium, Rarestone Capital and Block0.
Shortly, API3 will be launching the alpha-version of Airnode, a piece of cloud services infrastructure that acts as a ‘blockchain gateway’ for web and mobile applications. The project will be hosting hackathons using the Airnode technology in the coming months.
Learn more at www.api3.org
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