BIP: Proposal to whitelist API3

BIP_X: Proposal to whitelist API3

Contract address: 0x0b38210ea11411557c13457D4dA7dC6ea731B88a

Project Website: https://api3.org/

[ Discussion ]

API3 is a DAO-governed project for the creation of dAPIs — fully decentralized and blockchain-native APIs — which will be set up, managed, insured, and monetized at scale by the API3 DAO. With dAPIs, API3 aims 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.

API3 provides smart contract developers with oracle data feeds that are:

  • Free of middlemen

  • Source-transparent

  • Truly decentralized

  • Quantifiably secure
    [1]

[ Tokenomics ]

After the initial public distribution on Mesa DEX, there are now (up to) 20,000,000 unlocked API3 tokens in the circulating supply. Of the initial total supply, 15% (15M API3) is vested linearly from the end of the public distribution, 40% (40M API3) is vested linearly from the end of the public distribution, in addition to including a 6 month cliff lockup, and 25% is subject to distribution by the API3 DAO.
[1]

Decentralized governance requires 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:

  1. Staking: Grants dAPI revenue and inflationary rewards.

  2. Collateral: Backs insurance services that protect users from damages caused
    by dAPI malfunctions.

  3. Governance: Grants direct representation in the API3 DAO.
    The staking utility provides a financial incentive for participating in API3 and con
    tributing to increase its 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.
    Note that it is critical for these three utilities to coincide. All governing entities must
    receive staking rewards for them to govern in a way that maximizes revenue. All governing entities must have their funds used as collateral for them to govern in a way that minimizes security risks. To this end, API3 will have a single staking pool.
    Staking API3 tokens in this pool will grant representation and staking rewards, but
    at the same time, the staked tokens will be used as collateral to pay out insurance
    claims as needed.
    [2]

• The API3 DAO will set a target staked amount, and the inflationary rewards paid out to stakers will float to meet this target.

• The API3 DAO revenue will be burned. Paired with the floating inflation rate, this will correspond to the revenue being distributed to the stakers in a much smoother manner, resulting in stability in terms of aligning the governing parties’ incentives with of the DAO’s.
[3]

[ Available Audits ]

Done, but not published yet.

[ Market and Trading Data ]

API3’s price at the time of writing is $1.31

All-time high: $1.45 (1st December 2020)

All-time low: $1.06 (1st December, 2020)

Price 90 days ago: N/A

14,757,494 tokens currently in circulation

100,000,000 maximum supply

The current market capitalization is $20,303,149 .

The API3 token is available on decentral exchanges, including Uniswap and Mesa.

The 24-hour volume is $6,518,613

[ Social Networks and Community ]

  • linkedin dot com/company/api3/

  • twitter dot com/api3dao

  • t dot me/API3DAO (5,802 members currently)

[ References ]

  1. coinmarketcap dot com/currencies/api3

  2. raw dot githubusercontent dot com/api3dao/api3-whitepaper/master/api3-whitepaper.pdf

  3. medium dot com/api3/api3-tokenomics-update-f032d6e49b30

(Sorry for using “dot com” here. But there is technically no other way around to post more than 2 URLs in this forum)

5 Likes

+1 upvote concur with this write-up

1 Like

(Updated on 4h December 2020)

[Insurance tiers]
As a small market cap coin, this proposal concedes certain modifications are necessary to circumvent possible exploits, inflation, and other unwanted behavior. We propose that the impermanent loss insurance schedule remain unmodified (i.e. 30% coverage after 30 days, and 100% after 100 days); however, the maximum co-investment from the protocol should not exceed 10,000 BNT (a 99% drop compared to large market cap assets and stablecoins). The small minting limit bottlenecks the single-sided liquidity opportunity for VIDT holders, thereby encouraging dedicated LPs to purchase and deposit their own BNT in the protocol to support the pool. Moreover, the high APR should also attract additional BNT from outside the VIDT community, from those BNT holders in pursuit of the highest possible yields. Therefore the 10,000 BNT minting cap presents a low inflation risk, without sacrificing too much opportunity.

1 Like

I am happy to support this proposal. My thanks to @Fred for being so receptive to community input. I think this will be a highly profitable pool, and I look forward to engaging with the API3 community after the pool is whitelisted.

Definitely agree – gaining a lot of momentum, and represents a protocol/project heading in the right direction (full stack decentralization and DAO governance). Heavy backing, a lot of liquidity incoming.

white list that betch