Crypto Startup API3 Wants To Break LINK’s Dominance On The Market

The crypto startup API3 wants to break Chainlink’s dominance on the market as it raised $3 million in a seed funding round led by the VC Company Placeholder so let’s learn some more about it In our crypto news today.

API3 will use DAO-governed open-source software to provide blockchain-based apps with real-world data. It also plans to lower the costs of oracle data by removing the middlemen that are usually used by other oracle data providers like Chainlink. This new crypto startup API3, is a new oracle provider that hopes to get some of the market share of Chainlink. The startup announced that it closed a $3 million seed funding round led by Placeholder. The round drew participation from Digital Currency Group and CoinFund. The funding round shows that despite LINK Being dominant, the oracle problem is not resolved and that there’s still a lot to be done when it comes to bringing real-world data into decentralized applications.

Oracles are providers of the external data to blockchain-based apps that require most information to operate than they are available from any given blockchain itself. Since most codes for these apps are automatically executed via smart contracts, it’s important that external data is trusted and resilient to manipulation. With oracles like Chainlink, many different users run nodes that collect asset prices and other data from original sources, and then these users charge fees for replicating the data in order to prevent tampering but by doing so, they increase the data price and complexity of the network.

API3 uses the existing cloud of API providers and aims to cut out the middlemen thus lower the costs by providing aggregated data from the first-party sources. The co-founder of the crypto-startup Heikki Vanttinen explained:

 “This allows us to leverage the data providers’ off-chain reputation as collateral, which is only possible with the first-party oracles that we propose. This gets rid of all of the security risks of a third-party oracle node layer and makes the first-party oracle exactly as trustworthy as the API it is getting its data from.”

The startup will allow the data providers to run “airnodes” applications that run on the same cloud hosting platform that hosts their API services. Airnods are open-source software that transmits data from first-party providers so the codes will be built and maintained by decentralized autonomous organizations and stakeholders will share responsibility for governance and maintenance of the framework.