API3 Public Token Distribution Event

Published in

API3

5 min readNov 17, 2020

We are excited to announce that the API3 public token distribution event will take place between November 30th and December 14th on the Mesa DEX.

Why the delay?

We want to thank our entire community for your patience with us after we postponed our public distribution event in October. We felt this was necessary to ensure that we are working with the best possible partners for API3, many of whom we’ve since made public, and some of whom we will make public in the coming days and weeks. The additional time also allowed us to upgrade our tokenomics, not only to make them more robust and in line with our plans on how to scale API3, but also to ensure that participants in the public distribution event were on equal footing with the other project members when it came to staking and participating in the DAO. We further emphasized this by increasing the public distribution token share from 15% to 20% of the initial total supply of API3.

In addition to polishing our tokenomics, the time gap allowed us to publish a lot more digestible information about API3, to make sure that all interested contributors had a chance to build a sufficient understanding of the project before the token distribution. We hope you take the time to read our blog posts on Medium!

Public Token Distribution Event details

Starts on November 30th, 2pm CET
Ends on December 14th, 2pm CET (or whenever the total allocation is claimed)
Hosted on Mesa DEX
20,000,000 API3 tokens will be available, which is 20% of the total token supply.
Initial price will be $0.30, ceiling price will be $2.00
Proceeds and unsold tokens will go to the API3 DAO

Mesa DEX

The token distribution event will be hosted by DXdao’s Mesa, a permissionless decentralized exchange built on the Gnosis Protocol. The batch auction mechanism provided by the Gnosis Protocol allows for a fair token launch, as it limits the front-running and gas wars typical of token launches on AMM-based decentralized exchanges. We will release a step-by-step tutorial on how to get API3 tokens on Mesa soon.

Bonding Curve

We will utilize a logit-shaped bonding curve for the API3 token distribution. The initial price of the bonding curve will be $0.30 (the price provided to our institutional investors), and the ceiling price will be $2.00. Unsold tokens at the end of the distribution period will go back to the DAO bank.

Token Allocations

Token Lockups

Founders: 3-year* linear release with a 6-month cliff.
Partners & Contributors: 3-year* linear release with a 6-month cliff.
Seed Investors: 2-year linear release.
Prior Investors: 2-year linear release.
Public: Unlocked.
Ecosystem fund: Supply subject to distribution by the DAO.

All tokens subject to lockups are released linearly, block by block.
* Extended from 2 years

This initial DAO will develop the authoritative version of the DAO and migrate to it. The staking rewards will start being paid out with the launch of the authoritative version of the DAO, and all token holders will be able to stake and take part in governance.

Use of Token Sale Funds

Funding Building Projects

The API3 DAO will give out grants from the DAO bank and by consequence decide on the general direction of the project. These grants will be for executing one-time projects or continuous operations that benefit the API3 Project.

dAPI Operation Costs

The API3 DAO will operate dAPIs and cover their operational costs, including gas costs and API provider compensation.

What is API3?

Businesses offer a wide variety of services over APIs, ranging from providing asset price data to executing traditional financial transactions. It is critical for decentralized applications to be able to access the kind of services that APIs offer in order to interact with the real world, yet these APIs are not natively compatible with decentralized applications.

With API3, we aim for the concept of an API to take the next evolutionary step to meet the inevitably strict decentralization requirements of Web 3.0 without employing third-party intermediaries. This will be achieved by dAPIs — fully decentralized and blockchain-native APIs — which will be set up, managed, insured, and monetized at scale by the API3 DAO. Read our full whitepaper here.

The API3 Token

To decentralize the governance of both dAPIs and the project as a whole, API3 will be governed by a DAO. The governance will be entirely decentralized and open, meaning that all stakeholders will be able to participate in the governance of the project directly. This will be achieved through the API3 token, which will grant voting power in the API3 DAO. The legal entity governed by the API3 DAO is API3 Foundation Limited Company, a Cayman Islands foundation.

Decentralized governance necessitates well-balanced incentive mechanisms that accurately model both positive and negative outcomes. In other words, the governing entities should be rewarded for good results and penalized for bad ones. The API3 token is designed to facilitate this through three main utilities:

Staking: Grants dAPI revenue and inflationary rewards.
Collateral: Backs insurance services that protect users from damages caused by dAPI malfunctions.
Governance: Grants direct representation in the API3 DAO.

The staking utility provides a financial incentive for participating in API3 and contributing actions that increase revenue. The collateral utility has the participants share API3’s operational risk and incentivizes them to minimize it. Finally, the governance utility gives the participants the ultimate instrument to enact these incentives.