API3 brings first-party data feeds to zkEVM from launch
API3 is simplifying how Web3 builders access real-world data by solving the API connectivity problem through first-party oracles. This enables data providers to host the oracle node themselves, eliminating the need for third-party middlemen. For developers, access to secure, transparent, and decentralized data feeds through Airnode-enabled APIs will be available on Polygon zkEVM alongside API3’s oracle tooling.
zkEVM will be a true game changer for scalability and security of smart-contract applications. We are delighted to share that the dAPIs will serve a variety of data feed services for builders on Polygon zkEVM soon after the launch. For DeFi protocols, this means that 100+ data feeds will be accessible through the API3 Market in a self-funded & managed format.
Decentralized APIs (dAPIs): Data feeds for DeFi
A dAPI is an API-like service that delivers off-chain data to smart contracts. Just as web applications are powered by APIs, dAPIs provide dApps with a user-friendly interface to connect to data feed services.
Through the API3 Market, developers will be able to request data feed services in two formats:
- Self-funded dAPIs provide developers with the tools to use single-source data feed services with minimal associated costs and no upfront commitment, served in a fully permissionless fashion through the API3 Market. Once gas funds have been provided in the oracle sponsor wallet, a dAPI will begin to automatically post data on-chain when price deviation thresholds are met.
- Managed dAPIs are sourced from multiple first-party oracles and aggregated using a median function. Compared to self-funded dAPIs, managed dAPIs require user authorization through the API3 Market. Accessing dAPIs means builders can utilize secure & accurate data in their DeFi protocols and dApps, with managed data feeds providing additional benefits to security and decentralization as well as the API3 DAO overseeing oracle management.
The oracles serving dAPIs will be operated by reputable data providers, with source transparency being realized through the first-party oracle architecture.
A Fresh Approach to Revenue: Oracle Extractable Value
Oracle Extractable Value (OEV) allows dApps to benefit from the MEV opportunities they generate through order flow auctions. OEV auctions are similar to those for block space (MEV), but with the added advantage of providing timely data feed updates for the corresponding smart contract use cases.
Dapps can benefit from a sustainable source of income with OEV, as well as incentivize the timely updating of data feeds. This results in an oracle with minimal latency, allowing incumbents and innovators in DeFi to explore novel use cases while achieving long-term sustainability through the value captured being retained by the protocol.
OEV is accessed alongside first-party oracles, meaning DeFi protocols need to integrate dAPIs into their oracle contracts to realize the potential revenue stream presented by OEV.
Summary
Polygon zkEVM is a Layer Two (L2) scaling solution for Ethereum that leverages the scaling power of zero-knowledge (ZK) proofs while maintaining EVM Equivalence. Developers and users on Polygon zkEVM can use the same code, tooling, apps, etc that they use on Ethereum, but with higher throughput and lower fees.
API3 is pleased to see the first-party oracle infrastructure accessible to the zkEVM DeFi ecosystem from launch. dAPIs have been designed to be a simple interface for developers to access data feed services. Alongside the enhanced infrastructure that zkEVM and first-party oracles represent, we look forward to introducing services such as OEV that will further benefit DeFi protocols by providing a sustainable source of revenue.
“We’re really impressed with not only the pace but also the quality at which Polygon has delivered a truly builder-friendly zero-knowledge scaling solution. API3 has had a strong EVM focus from the start, manifested in the prioritization of our integrated networks, so we’re big believers in what Polygon is delivering with zkEVM, and how they’re doing it. Zk-rollups paired with first-party oracles and OEV have us very excited for the next generation of DeFi.”
Heikki Vanttinen — Founder & Core Contributor
Developers looking to take advantage of API3’s dAPIs can join the API3 community and utilize the #dev-support channel where the API3 development team is on hand.
If you’re migrating to zkEVM and require price reference data from day one, share your requirements below: https://api3dao.typeform.com/to/O1Uvxc8m?typeform-source=api3.org
