API3 (API3)

Overview

API3 is a blockchain oracle project that helps smart contracts pull in real‑world data directly from the companies that create it. Instead of relying on third‑party middlemen, API3 enables “first‑party oracles,” where the API provider itself runs a lightweight node called an Airnode to place signed data on‑chain. These first‑party feeds are packaged as decentralized APIs—“dAPIs”—that developers can subscribe to across major EVM chains. The goal is simple: make data delivery to decentralized apps (dApps) more transparent, secure, and cost‑effective. (old-docs.api3.org)

A key part of API3’s design is oracle extractable value (OEV). When price updates trigger liquidations or rebalances in DeFi, value can leak to external searchers. API3’s OEV approach routes that value back to the dApp that generated it, turning data updates into a protocol revenue stream instead of a cost sink. API3 has integrated OEV into its feeds and, during 2025–2026, has been updating the OEV mechanism while continuing dApp‑partnered OEV recapture. (blog.api3.org)

API3 also offers a free quantum random number service (QRNG) built with the Australian National University (ANU). This service supplies truly unpredictable randomness for on‑chain games and other apps, delivered through an Airnode and available on multiple networks. (businesswire.com)

History & Team

Origins and vision

API3’s whitepaper was introduced in September 2020 by co‑authors and co‑founders Heikki Vänttinen, Burak Benligiray, and Saša Milić. The paper reframed the “oracle problem” as an API connectivity problem and proposed first‑party oracles as the fix. The API3 token launched later in 2020 following a public sale. (chainclarity.io)

Founders and background

• Heikki Vänttinen has led product and ecosystem efforts, drawing on prior work with blockchain/API ventures.
• Burak Benligiray is the core technical lead behind Airnode and the dAPI architecture.
• Saša Milić contributes research and systems design experience from software engineering and data science. (bestdapps.com)

Funding and investors

API3 closed a $3 million seed round in November 2020 led by Placeholder, with Pantera Capital, Accomplice, CoinFund, Digital Currency Group, and Hashed participating. Those investors received 10 million API3 (10% of the then‑100 million initial supply) with a two‑year linear vest. The public allocation was later raised to 20% of supply. In a later strategic treasury diversification round, the project raised $4 million USDC led by DWF Labs, with Spartan Group, Laser Digital (Nomura), and Caladan participating. (medium.com)

DAO launch

In 2021 API3 launched its authoritative DAO on Ethereum, opening on‑chain governance and staking to all token holders. The DAO treasury control and staking design were core steps toward its community‑run model. (businesswire.com)

Technology & How It Works

First‑party oracles and Airnode

Most oracle networks rely on third‑party relayers. API3 flips this by letting the source of truth—the API provider—run an Airnode that writes signed values on‑chain. Airnode is a serverless, “set‑and‑forget” node that can be deployed on AWS/GCP or via Docker, making it practical for data companies to participate directly. Its design isolates calls to external APIs and blockchain nodes to improve reliability and reduce single points of failure. (airnode-docs.api3.org)

dAPIs, beacons, and beacon sets

API3 turns multiple first‑party data sources into on‑chain beacons. Individual beacons can be aggregated into “beacon sets,” and the human‑readable mapping of these feeds is what API3 calls a dAPI. Anyone can update a feed with valid signed data, and dApps read the freshest value via a simple proxy contract. This structure makes data transparent from source to chain and supports multi‑source aggregation when needed. (docs.api3.org)

Oracle Extractable Value (OEV)

Price updates can create profitable opportunities (like liquidations). Traditionally, external searchers capture that value. API3’s OEV approach auctions short windows to update a dApp’s feed, then routes proceeds back to that dApp. During the transition to a more efficient design, API3 paused the public OEV Network and Auctioneer but continues OEV recapture with partners—keeping the core idea: dApps should get paid for the value around their own oracle updates. (docs.api3.org)

QRNG for unpredictable randomness

For use cases like gaming, lotteries, or randomized NFT traits, API3 QRNG delivers randomness sourced from quantum vacuum fluctuations (via ANU). It is free aside from gas, accessible through RRP (request–response) calls, and deployable across many chains. (old-docs.api3.org)

Tokenomics & Utility

Governance, staking, and adaptive rewards

API3 is a governance and utility token used to steer the DAO and align incentives. Holders can stake in the DAO pool to gain voting power and receive weekly minted rewards. Rewards unlock on a one‑year rolling schedule, designed to encourage long‑term participation and reduce short‑term governance swings. The reward rate adapts: if staked tokens are below a target percentage, APR steps up; if above, it steps down—bounded by DAO‑set limits. (dao-docs.api3.org)

Service coverage backed by the staking pool

Staked tokens also serve as collateral for on‑chain “service coverage.” If a covered dAPI malfunction were confirmed via dispute resolution, payouts would come from the staking pool, creating a direct tie between governance quality and financial responsibility. This mechanism is intended to align the DAO’s incentives with data reliability. (old-docs.api3.org)

Distribution and early sales

At launch, API3 used an initial total supply of 100 million tokens. The seed round allocated 10% with a two‑year vest; the public allocation was raised to 20% through its token distribution event. The team and partner unlock schedules were later extended to three years (six‑month cliff) to signal long‑term commitment. Ongoing staking rewards mint new tokens over time, with burn mechanisms designed to offset emissions from protocol revenue. (medium.com)

What the token does

• Governance: propose and vote in the API3 DAO.
• Staking: secure governance rights and earn adaptive, weekly rewards (unlocking after one year).
• Collateral: back service coverage for dAPI users.
• Payments: used within the ecosystem alongside other accepted assets for feed plans and services, depending on integration. (dao-docs.api3.org)

Ecosystem & Use Cases

DeFi data across many chains

dAPIs provide price data for lending markets, stablecoin systems, synthetic assets, derivatives, and more. API3’s feeds are available across major EVM networks and are accessible through the API3 Market. Ecosystem integrations include chain‑level docs and marketplaces (for example, Kava and Lumia publish guidance on using API3 feeds), and API3’s Oracle Stack has been deployed on emerging L2s like World Chain. (docs.kava.io)

OEV‑aware liquidations and protocol revenue

For lending and margin systems, OEV can be significant during volatile moves. By integrating API3’s OEV design, a protocol can auction update rights and receive the proceeds as “OEV Rewards,” improving execution and creating a new income line tied to oracle usage. (blog.api3.org)

Randomness for apps and games

API3 QRNG fits on‑chain games, raffles, and NFT minting where unbiased randomness matters. Because it is based on quantum phenomena and delivered by a first‑party Airnode, dApps can obtain unpredictable values without running their own randomness infrastructure. (businesswire.com)

Advantages & Challenges

Advantages

• First‑party data provenance: Feeds come directly from API providers via Airnodes, improving transparency and reducing trust in relayers. (old-docs.api3.org)
• Developer experience: Serverless Airnode deployments and a marketplace of dAPIs make onboarding straightforward. (airnode-docs.api3.org)
• OEV alignment: The ability to recapture value from updates lets dApps get paid for the activity their data triggers. (blog.api3.org)
• DAO‑aligned incentives: Staking provides governance power and rewards, while service‑coverage collateral ties decision‑making to reliability. (old-docs.api3.org)
• Free QRNG utility: A high‑quality randomness source available across multiple networks at gas‑only cost. (businesswire.com)

Challenges

• Evolving OEV infrastructure: The public OEV Network and Auctioneer have been in transition, with partnered recapture continuing while a more efficient platform is developed. Clarity and performance of the next phase will matter for adoption. (docs.api3.org)
• Competitive oracle landscape: Alternatives exist, and teams often standardize on one provider, so winning integrations chain‑by‑chain remains a continuous effort. (General industry context.)
• Multi‑chain operations: Running and monitoring feeds across many networks can be complex, though API3’s managed dAPI model and marketplace aim to streamline this. (blog.api3.org)

Where to Buy & Wallets

API3 can be purchased on Coinbase, Binance.US, Kraken, and KuCoin. Availability and trading pairs vary by region and platform. (coinbase.com)

API3 is an ERC‑20 token on Ethereum. It can be held in standard Ethereum‑compatible wallets such as MetaMask, Ledger, Trezor, and Coinbase Wallet. Always use the token’s official contract address when adding it to a wallet. (blog.binance.us)

Regulatory & Compliance

API3 functions as a governance and utility token for a decentralized oracle network. Its classification can differ by jurisdiction. In the United States, regulators apply the Howey framework case‑by‑case to decide when a digital asset is a security; API3’s model emphasizes network utility, DAO governance, and staking for protocol operations, but formal classification ultimately depends on specific facts and how the token is offered and used. Centralized exchanges that list API3 implement their own compliance reviews and standard KYC/AML processes for customers. (sec.gov)

In the European Union, the Markets in Crypto‑assets (MiCA) framework now governs crypto‑asset issuers and service providers. Utility tokens such as API3 generally fall under “other tokens,” while stablecoins are handled by specific titles. MiCA phases began in 2024, with continuing guidance for service providers as the regime rolls out. Projects that integrate with EU‑based exchanges and providers should expect MiCA‑driven disclosures, licensing, and conduct standards to shape access and operations. (finance.ec.europa.eu)

Regarding Islamic finance, API3’s core activity—providing data infrastructure—does not involve interest or gambling mechanics, and several independent Shariah screeners have reviewed it. Sharlife, for example, lists API3 in its crypto screening catalog and has published screening notes, indicating a favorable assessment in past reviews. As with any asset, individual scholars and services may differ, but API3’s utility‑based design aligns with common Shariah screening approaches to crypto. (sharlife.my)

Future Outlook

API3’s roadmap centers on three themes. First, deepen first‑party coverage: more providers operating Airnodes, more chains supported, and more managed dAPIs available through the marketplace. Second, mature OEV: complete the transition to a more efficient OEV platform and make update auctions and payouts routine so that dApps can plan around OEV Rewards. Third, expand specialized services like QRNG and signed data for niche verticals such as gaming, RWAs, and insurance—areas that benefit from verifiable sources and predictable costs. API3’s presence in chain‑level docs (for example, Kava and Lumia) and deployments on new L2s such as World Chain suggest that the team is focused on meeting developers where they build. (docs.kava.io)

Summary

API3 is an oracle platform built on a simple idea: the best way to get off‑chain data onto blockchains is to let the original data providers do it themselves. With Airnode, first‑party dAPIs, and an evolving OEV mechanism that pays value back to the dApps that create it, API3 aims to deliver transparent, multi‑source data with clear incentives for everyone involved. The token’s economic model ties governance, staking rewards, and service coverage together, while utilities like QRNG broaden what developers can build. As standards like MiCA come into force and DeFi spreads across more chains, API3’s first‑party approach offers a clear, developer‑friendly path to reliable on‑chain data. (airnode-docs.api3.org)