Informational Report on API Network
This is a live document and will be updated based on most recent information.
The following report is NOT intended as advice to purchase software. This report is presented for purely informational purposes. ALWAYS conduct your own research before buying digital tokens associated with a software project during a crowdsale.
The API Network http://www.apinetwork.co/ is an open source project to build a competitive marketplace for developers to access APIs with a crypto currency called API Coins or XAP for short. Their crowdsale starts June 18th at 11:00 a.m. U.S. central time. The team is has the full technical stack covered, but should recruit more developer evangelists. This will be one of the first federated market places for APIs and relies on the Bitcoin and Master Protocols to function. The price of the tokens will rise during the period of the crowdsale based on the volume of API coins (XAP) that are purchased with bitcoins. See http://buyxap.com/ for details. BTC is the only currency accepted during the crowdsale.
View presentation and Q&A at the following link:
https://docs.google.com/a/dappsfund.com/uc?id=0B2R_eSvAkuXSbU5IaTRPQWpGRmM&export=download
The API Network is born out of a 3 year effort by its core team members (who originally formed a company Engine Inc. / www.Engine.co) to make accessing API’s easier for developers, to build a standard which others can use, and create the tools and interfaces involved so that any developer can benefit from offering their API to the rest of the community of developers. In January of 2014, the project shifted from proprietary to 100% open source (and later created a new entity “API Network Foundation”) in its backend and user interfaces in order to broaden the effort outside of the core team and get the community more involved. The API Network team decided that in order to offer an incentive to API providers, and create a seamless billing / access process for users the API Network would issue its own digital token (XAP) on the Master Protocol in order to facilitate this new marketplace for APIs. This process will start June 18th at 11:00 a.m. U.S. central as part of a crowdsale.
Problem / Solution / Value Proposition
For those that have built a modern application you know connecting to each service’s API is a big pain. So a few services such as http://singly.com/ have popped up that offer to give the developer an interface that already has the API connected. However, for those of you those that have dealt with these services though there are a bunch of problems.
1. Its a single source for accessing these API’s so there isn’t any price competition and Singly takes a margin so the price the developer pays for convenience is a higher price per API call.
2. Singly is a private centralized company, and so if it doesn’t support the API you want, the developer is out of luck. You can send in a request and maybe one day they will support it.
3. Since its not open source the developer can’t see the back end of how Singly’s code is handling the data from the API to the developers application. So the developer has a much simpler interface with less power to it.
The Solution API Network is proposing is:
1. A marketplace where API providers compete on price, with a seamless digital payment layer to make payment frictionless and peer to peer.
2. An open standard so anyone can add additional APIs that people want support for.
3. An open source view into how all the data is handled so that developers can customize it for your application if you need a more powerful solution.
This is a large market by volume of API calls and growing at around 20% per year. Once there is an open source marketplace for API’s then we can build more powerful and less centralized versions of applications such as https://ifttt.com/
IFTTT lets you connect together all of your different applications and create triggers to do just about anything. Now imagine that with a competitive market for people creating agents to perform just about any action on the internet. Thats the vision the API Network team is going for.
Crowdsale On June 18th at 11:00 a.m. U.S. Central Time
A total of 3,000,000 API Coins (XAP) are available for sale during the crowdsale event which runs for a period of 30 days or until the total number of API Coins is sold.
The pricing of the API tokens is determined based on the volume that is sold. Specifically the API Network is selling API Coins (XAP) at a rate of 1.6 mBTC per XAP for the first 500 bitcoins worth of sales. The price increases to 2.13 mBTC per XAP during the sale of the next 1,000 bitcoins worth of XAP. The price then increases to 2.66 mBTC per XAP during the sale of the next 2,000 bitcoins worth of XAP. Lastly, the price increases to 3.12 mBTC per XAP during the sale of the last 4,692 bitcoins worth of XAP.
Details found at: http://buyxap.com/
It is worth noting that the API Network team does not expect to collect the maximum number of bitcoins by selling out all of their tokens (though it is possible if demand has been underestimated). Instead, the project has set a range of price points and is leaving it up to the market to decide the proper price of API Coins (XAP). If the market decides this projects is highly valued, than the price of the coins will reach a higher level during the crowdsale. Conversely, if the market decides that this projects is not as highly valued, than the price of the coins will not rise as high during the crowdsale. Either way the pricing of these tokens is for the market to determine.
The API Network has both a geographically diverse team (Baltimore, Philadelphia, Austin, and India) and it members have a range of different skill sets. Here I will highlight a few of the key developers.
Ian Stewart ( www.linkedin.com/pub/ian-stewart/11/b04/9bb) one of the senior engineers for API Network focused on the front end (user interfaces) spent a few years at Booz Allen Hamilton before venturing into the startup world the last couple of years with Engine Inc. (https://apps.engine.co) and Square Knot (http://squareknot.com).
Marv Schneider (user experience) and Faiz Khan (back end developer) both have worked the last few months contributing to the Master Protocol clients and tool sets and will help with the issuing of the API Network digital tokens on top of the Master Protocol.
The team’s other members (Becky, Jalal, Vineeth, and Parag) cover all the technical bases including: search, NLP, system integration and design, that are required in order to successfully develop the proposed clients. However, what the team is currently lacking is a developer evangelist and will need to recruit one or more in order to be successful in gaining market share in this space.
The economics are straightforward, in that they resemble that of a competitive marketplace similar to Ebay, however in this case there is zero overhead being collected by a central company. Instead, API providers are directly compensated by those using their services (API calls) with the API coins enabled on the market. Pricing of the API coins (XAP) will adjust dynamically based on the changing price of the crypto currency in order to provide USD denominated pricing (similar to merchant services for bitcoin pricing of items).
This requiring the use of the APIcoins (XAP) in the purchasing of API calls in the marketplace gives the APIcoin its utility and thus if more developers demand APIcoins overtime in order to access the API Network, then that will provide additional demand for these tokens.
Additional features may add to the demand for APIcoins over time after the launch of the SAFE Network. The API Network white paper includes a feature where those digital tokens generated by demand for the APIs listed on the market (such is the case with content providers hosting providing content on the SAFE Network) will flow back to the holders of APIcoins. Offering additional rationale for the purchase and holding of APIcoins (XAP).
The creation of the APIcoin (XAP) and the clients for the API Network are not technically difficult in the sense that they do not have to research or provide any new cryptographic proofs for the functioning of the system. Instead, the system relies on the existing Bitcoin and Master Protocols for its basic functions and transfer of value.
See details on Github in the Protocol Spec / White Paper: https://github.com/APINetwork/ProtocolSpec
With that said the API Network has a great deal of code that it is inheriting (acquiring) from Engine Inc. as part of the crowdsale, which took the better part of two years to develop and build with completely open source components. The challenges will come in mostly from how to progressively decentralize all the bottlenecks in the system when it comes to hosting the marketplace and providing for reputation and other systems so that users can build confidence in the system. Many of these issues can be eased once the SAFE Network is launched and can provide the decentralized storage required for distributing the API Network completely.
There are a number of existing API services for developers including Singly and Mashape. While today, these services are subscription based (in the case of Singly), or have restrictions on their free APIs or friction in paying for their paid APIs. If these competitors were to warm up to crypto currency and change their models to that of open source they would be tough competition for API Network. Depending on how much network size effect the API Network project is able to gain before its competitors adopt the same or similar model will largely determine its success.
On the other side of the coin the existing legacy market competitors face the “innovators dilemma” given that adopting the API Network model will flatten their existing profit margins. Thus, legacy players will delay adopting such a model until their fear of losing too much market share outweighs their desire to protect existing profits.
Those involved in preparing this informational report were among the co-founders and advisors of Engine Inc. in 2012 (the original API effort that was proprietary and is now being open sourced) and the views expressed here (while intended as neutral), should be taken as friendly to the project and its success.
2. This is Not Stock or Equity
Participation in the API Network / XAP crowdsale will not provide you with a “security” or “equity” stake in this project. The digital token known as XAP is only useful for accessing the API Network software after its development is complete.
No refunds of BTC will be made to purchasers of XAP, should they change their mind at a later time, as the creation of the XAP tokens is locked in. Of course, once the purchaser receives his or her tokens after the crowdsale, they are free to send or sell them to anyone of their choice.
4. If You Send BTC From Coinbase You Can’t Claim Your XAP
If you send the API Network Crowdsale address BTC from a wallet that you do not control the private key for (example Coinbase), then you will not be able to claim the API Coins (XAP) you purchased and the API Network will be unable to generate new ones for you.
5. Low Liquidity / Ability to Sell These Digital Tokens Will Be Limited
If you purchasing token XYZ in order to hold it as “a store of wealth or value” please understand that this project is in its early days of development and that the market for these tokens will be very shallow and thus make it will be harder to buy and sell these tokens without effecting the price on the market.
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