API3 is introducing Managed dAPIs: Building Trust through Source Transparency

United Arab Emirates, 6th Jun 2023 – Today, API3 is thrilled to announce the launch of Managed dAPIs, a groundbreaking solution that revolutionises the way decentralised applications (dApps) interact with off-chain data. Managed dAPIs offer developers a secure, reliable, and scalable approach to accessing real-world data on-chain, while prioritising source transparency and trust.

In the rapidly evolving landscape of the Web3 data economy, the need for reliable and transparent connections between real-time market data and smart contracts has become paramount. Managed dAPIs, powered by API3, address these challenges by providing high-quality reference data served on-chain by first-party oracles. By eliminating third-party intermediaries and enhancing data integrity, Managed dAPIs establish a new standard for fostering trust through data source transparency and embody the core values of blockchain technology.

What Makes Managed dAPIs Better?

Managed dAPIs offer a wide range of features that not only ensure reliability and efficiency but also significantly improve security. These attributes make Managed dAPIs the ideal choice for dApps seeking accurate, reliable, and secure data in the rapidly changing oracle space.

1. First-Party Oracles
Managed dAPIs utilise first-party oracles, enabling data to be served directly from reputable API providers via the API3 Airnode. This direct connection eliminates the need for third-party intermediaries, reducing the possibility of data manipulation or bias. The first-party oracle architecture fosters trust through source reputation and end-to-end transparency. Developers can verify the data source on-chain, providing confidence in the integrity and accuracy of the accessed data.

2. Multi-Source Data Feeds
Managed dAPIs aggregate data from numerous first-party oracles, creating multi-source data feeds. This approach ensures a broad and diverse range of data points, contributing to the overall accuracy and reliability of the data. Each beacon or data point in a Managed dAPI represents a unique provider that is verifiable, ensuring data integrity and reducing potential bias.

3. Push Oracle Architecture
Managed dAPIs utilise a push oracle architecture, actively pushing data to the blockchain and making it readily available for dApps. This push architecture enhances efficiency and ensures timely data feed updates, benefiting both developers and end-users. Furthermore, this design makes it easy for dApps to migrate from existing oracle services.

4. Improved Security With Native-Chain Aggregation
To provide maximum security, Managed dAPIs use native-chain aggregation, combining data on the same chain that the oracle is being used on. Native-chain aggregation maximises security by eliminating the need for bridges, which come with their own risks and vulnerabilities. With native-chain aggregation, developers can rely on a secure and reliable data feed.

These features make Managed dAPIs a powerful solution for building better oracles in the DeFi ecosystem. By focusing on end-to-end transparency, high-quality data sources, efficient data delivery, and robust security, Managed dAPIs set a new standard for how dApps access real-world data on the blockchain.

Accessing Managed dAPIs

Managed dAPIs have been designed to be developer-friendly and easy to implement. They can be accessed via the API3 Market, providing developers with seamless access to aggregated data feeds. The market offers a range of multi-source dAPIs with various deviation thresholds and heartbeat specifications, allowing developers to choose a service that aligns with their unique requirements.

While existing dAPIs are always free to read, the creation of a new multi-source feed requires the user or ‘sponsor’ to pay for the upgrade to create the data feed. Users are required to pay for the upgrade to a Managed dAPI in native chain currency, covering the operational expenses associated with gas costs. The sponsoring dApp essentially upgrades the service to a multi-source data feed, which API3 creates and maintains. Once established, the feed becomes accessible to all users, as long as the sponsoring dApp continues to fund the Managed dAPI. This flexible and scalable nature of the service accommodates changes to contracts during their term, providing additional scalability to developers.

Operational Oversight

The API3 DAO dAPI team provides 24/7 monitoring of Managed dAPIs, ensuring continuous checks on wallets and API responses for reliability and security. The team can also update or “re-map” dAPIs to meet evolving requirements, ensuring a continuous improvement cycle. This level of operational oversight guarantees that Managed dAPIs maintain their integrity and reliability at all times.

Simple Integration

Managed dAPIs have been designed for easy integration. Comprehensive documentation and guides are available to simplify the process, and a dedicated developer community provides technical support and best practices. Whether you’re a seasoned developer or a newcomer, you’ll find the integration process smooth and intuitive.

Managed dAPIs are supported across 12 different networks, including Ethereum, Arbitrum, Polygon zkVM, and Optimism, with data feed contracts adapted to the specific duration limits of each chain. This multi-chain support expands the reach of Managed dAPIs, providing more opportunities for developers and blockchain networks to leverage the power of decentralised data feeds.

Paving a Road to Better Protocol Performance with Oracle Extractable Value

As API3 progresses into the next phase of the dAPI rollout, they are turning the challenges posed by Maximal Extractable Value (MEV) into an opportunity to optimise the DeFi ecosystem. Traditionally, MEV has caused significant value loss for dApps and contributed to a poor user experience. API3 is addressing these challenges by designing a process to capture Oracle Extractable Value (OEV), a subset of MEV related to oracle updates.

Outlined in the API3 OEV Litepaper, they will introduce an off-chain marketplace that allows dApps to auction off meta-transactions signed by first-party oracles for updating data feeds. Searchers bid for the right to perform these oracle updates, capturing the MEV associated with the transaction. This shared benefit model ensures that price feeds are updated according to the dApp’s needs rather than solely relying on deviation thresholds, similar to a pull-based oracle.

The transformative aspect of OEV lies in the fact that the value captured by searchers is shared with the dApps through the auction process. This approach minimises the negative impacts of MEV extraction, fostering the creation of accurate and low-latency oracles, which, in turn, enhance protocol performance and efficiency. One profound impact of OEV is its ability to create more accurate and low-latency oracles, increasing the profitability and sustainability of liquidity provision. This, in turn, improves market-making and attracts more liquidity to the application, fostering better performance and a superior user experience. By introducing a process to capture OEV, API3 demonstrates the power and potential of Managed dAPIs, paving the way for a sustainable and profitable future in DeFi.

Building a Better Oracle Service with Managed dAPIs

Managed dAPIs are transforming how dApps access and handle data on the blockchain. They represent a significant leap towards realizing a truly decentralized data economy by addressing critical issues of data integrity, security, and transparency.

By leveraging Managed dAPIs, developers and networks can proactively foster transparency and reliability, building on the “don’t trust, verify” principle. This approach delivers a better user experience and establishes long-term trust with users.

API3 encourages developers and blockchain networks to explore their technical documentation to learn more about using Managed dAPIs to power their applications.

Explore Managed dAPIs today and join API3 in building the future of decentralised finance.

For more information about Managed dAPIs and to explore the possibilities they offer, please visit API3’s website and access the comprehensive technical documentation.

About API3:
API3 is a leading provider of decentralised oracle solutions, committed to bridging the gap between blockchain applications and real-world data. By leveraging the power of first-party oracles and advanced technology, API3 offers developers and dApps a reliable, secure, and transparent approach to accessing off-chain data on-chain. With the launch of Managed dAPIs, API3 is driving innovation in the DeFi ecosystem and setting new standards for decentralised data feed.

Media Contact

Organization: API3

Contact Person: Adonis Cyril

Website: https://api3.org/dao

Email: [email protected]

Country: United Arab Emirates

Release Id: 0606233957

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