API3

About API3 (API3)

What Is API3 (API3)?

API3 is an oracle project built on a single contrarian idea: the company that owns the data should be the one putting it on chain. Instead of paying a network of third-party node operators to fetch data from an API and relay it, API3 has the API provider itself sign its own data. The project calls this a first-party oracle, and it is the term API3's own whitepaper introduced.

The second idea is newer and is what the project leads with today. Every oracle update creates value that someone can capture, usually a searcher bot racing to liquidate a position the moment a price moves. API3 calls this Oracle Extractable Value, sells the right to perform those updates, and pays 80 percent of the resulting revenue back to the application whose feed created the opportunity. The project's own shorthand is "oracles that pay you."

API3 is the governance and staking token of the API3 DAO, which controls the project's parameters and treasury.

Official sources:

• Api3
• Api3 documentation
• API3 whitepaper
• api3dao on GitHub
• API3 on Etherscan

Who Founded API3? (History)

API3 was launched in late 2020 by Heikki Vanttinen, Burak Benligiray, and Sasa Milic, with the token going live in December 2020. In July 2021 the project launched its authoritative DAO along with staking, so that token holders staking into the DAO pool received governance weight proportional to their share of the pool.

The technical foundation was Airnode, a serverless oracle node an API provider could deploy without running blockchain infrastructure or holding crypto, which is what made the first-party model practical. From there API3 built dAPIs, aggregated data feeds assembled from multiple first-party sources, and then the Api3 Market, a self-service storefront where a developer can buy a feed with the update parameters they need and integrate it without contacting anyone.

OEV came next. API3 built the OEV Network, an Arbitrum Nitro rollup that ran public auctions for oracle update rights. That public auction chain and its auctioneer were retired, with funds bridged out by the end of November 2025, and API3 moved to a two-track model: private auctions run with partnered searchers on non-delayed data, and public signed data endpoints on delayed data that anyone can search against. The underlying on-chain machinery, the Api3ServerV1OevExtension contract, remained.

Two more recent developments are worth knowing. API3 now acts as a vault curator on Morpho, running its own lending markets, and it has introduced AirnodeHub, an early-access marketplace where autonomous agents discover, call, and pay for APIs and the data source is paid per response.

How API3 Works

The system has three moving parts and they connect cleanly.

1. First-party data reaches the chain Each API provider runs Airnode feed software that continuously queries its own API and signs the result with its own Airnode wallet. That signed data is pushed to a Signed API, which serves it publicly. Because the data is signed at source, anyone can verify who produced it, and no intermediary is trusted to have relayed it faithfully.

2. Feeds are aggregated on chain Each provider powers a single-source feed, identified by a beacon ID derived from its Airnode address and a template ID. Multiple beacons are combined into a beacon set, and the value an application reads is the on-chain median of the contributing feeds, with the timestamp being the median of their timestamps. Aggregation happens on chain rather than off it, which is a deliberate security choice. Applications read the result through an Api3ReaderProxyV1 contract, which also implements a widely used aggregator interface so it can drop into contracts written for another oracle.

3. Updates are triggered and auctioned Feeds update on two conditions: a deviation threshold, meaning the off-chain value has moved more than a configured percentage away from the on-chain one, and a heartbeat interval, offered on the Api3 Market as a one-day maximum gap between updates and initiated two minutes early to reduce the chance of borderline reverts. On top of that, API3 sells the exclusive right to execute valuable updates. A searcher who wins can update the feed and act on the resulting opportunity atomically, with no gas auction against rivals, and the application receives 80 percent of what the searcher paid.

The trade-off is stated openly in API3's documentation: applications using this system see a 0 to 15 second delay in their base feed, in exchange for the OEV revenue that delay makes capturable.

Key Ecosystem Components

• Airnode and Airnode feed, the software an API provider runs to sign and publish its own data
• Signed APIs, the public endpoints that serve provider-signed data
• Beacons and beacon sets, the single-source feeds and their on-chain aggregates
• Api3ReaderProxyV1, the deterministic proxy contract an application reads, deployed per application when OEV Rewards are enabled
• Api3ServerV1OevExtension, the contract that gates OEV updates behind a valid signature and payment
• Api3 Market, the self-service storefront for buying feeds with chosen update parameters
• OEV Rewards, the monthly payout of 80 percent of OEV revenue to partner applications, paid in the native gas token of the chain the application runs on
• Api3-curated markets, where API3 curates lending vaults on Morpho and keeps the entirety of the OEV those markets generate
• AirnodeHub, the early-access marketplace for agents to discover, call, and pay for APIs
• The API3 DAO and its staking pool

API3 Token Utility

The API3 token has an unusually tight coupling between governance and risk:

• Staking into the DAO pool is what grants governance weight, proportional to the staker's share of the pool
• Staked tokens double as collateral backing the project's service coverage, so stakers carry economic exposure to feed failure rather than only voting on it
• Rewards are minted to the pool, making API3 an inflationary token with no fixed cap
• The reward rate is adjusted weekly toward a target proportion of supply being staked, rising when the pool is under-staked and falling when it is well funded
• Unstaking is subject to a seven-day waiting period, which exists to blunt proposal spam and last-minute governance capture
• Reward tokens are locked for a year on a rolling schedule after they are received

Two nuances matter for readers. Staking exposes principal to coverage claims, so it is not a risk-free yield. And OEV Rewards are paid to applications in the native gas token of their chain, not in API3, so the token is not a claim on that revenue stream.

What Makes API3 Unique?

Removing the middleman is the whole thesis. In API3's model there is no separate class of node operators between the data source and the chain, which means there is no second consensus system whose incentives can drift from the data's, and no operator that can be bribed independently of the provider. API3's documentation argues that intermediary designs create two points of failure, the providers and the relayers, where a first-party design has one.

The OEV work is the more commercially distinctive part. API3 turned a cost that other applications quietly bleed to bots into a revenue line for the application, and stated a specific split rather than a vague promise. The project goes further and argues that auditors should treat a lack of OEV capture as a finding, which is an aggressive position but a legible one.

How API3 Differs from Similar Oracles

• Data is signed by the API provider itself, not fetched by third-party node operators
• Aggregation is performed on chain as a median of provider feeds, rather than agreed off chain and posted as a single value
• Feeds are bought self-service through a market with chosen deviation and heartbeat parameters, rather than negotiated per client
• The reader contract implements a common aggregator interface, so migration from another oracle usually requires no contract changes
• Value extracted around updates is auctioned and returned to the application, where most designs let it leak to searchers and validators
• The price of that model is a short base-feed delay, which competing designs do not impose

Use Cases of API3

• Lending markets pricing collateral and triggering liquidations, and earning OEV Rewards on the liquidations their own feeds enable
• Perpetuals, options, and synthetic asset protocols needing frequent price updates
• Stablecoins and tokenized asset systems referencing external values
• Applications migrating off another oracle without rewriting their contracts
• Searchers competing for exclusive update rights through partnered auctions or public signed endpoints
• Autonomous agents paying per API call through AirnodeHub
• Token holders staking to govern the DAO and back its service coverage

How API3 Is Secured

Security rests on provenance, aggregation, and economics. Every value can be traced to a signature from a specific provider's Airnode wallet, and providers rotate their Airnode mnemonics every six months as a matter of practice, so the authoritative addresses should always be read from the Market or from chain rather than cached. Feeds are medians of independent first-party sources, so a single bad source does not move the aggregate on its own. Changing which providers contribute to a feed requires signatures from all owners of the relevant multisig.

Because the feeds are asynchronous rather than round-based, they are designed for availability, which is why the reader contract deliberately does not implement round-based functions of the aggregator interface it otherwise mirrors. API3's documentation is explicit that OEV updates offer the same guarantees as ordinary updates, since both are on-chain aggregations of provider-signed data. On the token side, staked API3 acts as collateral for service coverage, putting stakers behind the feeds they govern.

Risks and Considerations

• The base-feed delay is a real trade-off. Applications accept a 0 to 15 second lag in exchange for OEV revenue, and that is not the right trade for every design.
• OEV revenue is not paid to token holders. It goes to partner applications in their chain's gas token, so token value must come from governance and coverage rather than from a direct revenue share.
• Staking is collateral, not just yield. Stakers can be called on to pay coverage claims.
• API3 is inflationary with no cap, and rewards are locked for a year after they are received, so the position is illiquid in practice as well as exposed.
• Concentration risk is inherent to first-party design. Fewer, higher-quality sources also means fewer sources.
• The OEV architecture has already changed once, with the public OEV Network and its auctioneer retired. Private auctions with partnered searchers are less open than a public auction chain.
• Curated lending markets are a different business from selling data, and they carry lending, liquidation, and parameter risk that a pure oracle does not.
• Oracles are a consolidating and competitive market where integrations, not features, decide outcomes.

Why API3 Matters

API3 is one of the few oracle projects to have argued for a genuinely different architecture and then shipped it, and its OEV work reframed a cost that applications had accepted as unavoidable. Whether or not the first-party model wins outright, the idea that a protocol should be paid for the extractable value its own price updates create has already changed how the sector discusses oracle design.

Where Can You Buy API3 (API3)?

API3 is an Ethereum ERC-20 token listed across a broad set of centralized exchanges as well as decentralized venues. Availability and pairs vary by jurisdiction.

Major Centralized Exchanges (CEX)

API3 is commonly available on:

• Binance
• OKX
• Kraken
• HTX
• Bithumb
• MEXC

Common pairs include API3 against major stablecoins and, on regional venues, against local currency.

Storage Options After Purchase

API3 can be stored:

• On an exchange, under that exchange's custody
• In any Ethereum self-custody wallet, since API3 is a standard ERC-20 token
• Behind a hardware wallet paired with compatible wallet software

Staking is done by depositing into the DAO pool contract through the DAO interface, which means giving up liquidity for the unstaking waiting period and accepting the collateral role that comes with it. Confirm the network and contract address before any deposit or withdrawal.

Related Coins

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