Proposal to whitelist API3

Clarification: Whitelist, Not Liquidity Mining

The previous whitelisting attempt was inhibited by the LM rewards governance issues at the time, which have since been resolved. This proposal is not seeking to activate liquidity mining on API3. Rather, we are seeking to add API3 to the Bancor whitelist for the purpose of offering impermanent loss protection to API3 liquidity providers.

API3

Contract address: 0x0b38210ea11411557c13457D4dA7dC6ea731B88a

Project Website: https://api3.org/

Discussion

API3 is a DAO-governed project that seeks to support the creation, management, and monetization of decentralized application programming interfaces (dAPIs). The API3 community will operate oracle nodes free from third party interference. The project and its community are committed to the future vision of Web 3.0.
API3 is an on-chain oracle service.

Tokenomics

The API3 token sale occurred over 30Nov – 4 Dec 2020, raising $23,000,000 in ETH (API3 (API3) - All information about API3 ICO (Token Sale) - ICO Drops). The distribution was handled via Mesa DEX, and there are approximately 20,000,000 unlocked API3 tokens in circulation. 15,000,00 API3 (15% of the total supply) are vested linearly from the end of the public distribution, 40,000,000 (40%) are vested linearly from the end of the public distribution, in addition to a 6 month lockup period. A further 25% is held for future distribution by the API3 DAO.
Decentralized governance requires well-balanced incentive mechanisms that accurately model both positive and negative outcomes; 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 (dAPI revenue and inflationary rewards). The staking utility provides a financial incentive for community participation, and contribution to the API3 ecosystem. The API3 DAO will set a target staked amount, and the inflationary rewards paid out to stakers will float to meet this target
  2. Collateral (backs insurance services that protect users). The collateral utility creates and operational risk for active participants on the platform, thus creating a selfish incentive to preserve the quality of the product, system functionality, public profile, and industry engagement.
  3. Governance (Voter/stakeholder representation in the API3 DAO). The governance features give API3 community member agency in the growth and direction of the project. All governing entities provide funds as collateral, again, creating a selfish incentive to govern the system to the best of their ability.
    These three prongs of the API3 tokenomics model are one and the same – there is a single staking contract that fulfills all three of these features. Staking API3 tokens in this pool affords its user governance privileges, but also exposes them, to the risk of covering insurance claims as needed. The API3 DAO revenue is burned. Paired with the floating inflation rate, the intended outcomes is a smooth revenue distribution to community members.
    .

Available Audits

Not yet audited. Once DAO development is finished it will be audited.

Market and Trading Data

API3’s price at the time of writing is $5.09
All-time high: $6.16 (January 24, 2021)
All-time low: $1.06 (1st December, 2020)
Price 90 days ago: $1.07
20,422,621 tokens currently in circulation
100,000,000 maximum supply
The current market capitalization is $100,708,187.
The API3 token is available on decentral exchanges, including Uniswap and Mesa.
The 24-hour volume is $17,637,761

[ Social Networks and Community ]
Twitter — https://twitter.com/API3DAO
Telegram — Telegram: Contact @API3DAO (Community Chat)
Keybase — Keybase (Developer Chat)
Github — API3 · GitHub
Reddit — https://www.reddit.com/r/API3/
Medium — API3 – Medium
DAOtalk — API3 DAO - DAOtalk

Proposed Insurance Tier

As API3 has confirmed itself as a bona-fide presence in the cryptocurrency space, and given the considerable market capitalization since the intial whitelist proposal in December 2020, we feel that API could be considered a „mid-cap“ asset similar to OCEAN. However, we realize the pool is also new, and we accept without reluctance that expecting equal footing with established communities is naive. However, from the interest of building and maintaining healthy liquidity, and to help attarct more attention to the pool, we are asking the BancorDAO to consider our whitelist launch with a mid-range BNT coinvestment limit of 500,000 BNT (approx. $1m).
We look forward to further discussions with the Bancor community. We have an active API3/Bancor discussion group on Telegram, and we are also frequent visitors to the Bancor Discord server. If you would like to reach out, we will happily explain our interest in API3, and why we feel Bancor is the only best location for our liquidty for the foreseeable future.
Link to BNT/API3 TG group: Telegram: Join Group Chat

References

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I’m not a fan of API3 because of two reasons.

  1. Only 20% of the total supply was sold to the public, a large part (8% of circulating supply) of which was bought super cheap using an exploit. This was something a lot of people warned about, but the team chose to continue anyway using this platform. One might think they were in on this exploit. Since then another 7% was sold on the open market (which is 35% of what was sold to the public) with no communication what this was for. Did they already burn through the crowdsale money of +50M USD in three months? Weird.
  2. Their antics of antagonization of competitors. Their whitepaper mentions Chainlink 18 times. They got named Chainlink killer in an article on Coindesk, which is owned by the same organisation that is a backer of API3 (DCG). They have written many passive agressive mediumarticles focused on attacking the main player in the Oracle space, using false narratives of a first-party oracle, which is something that Chainlink enables as well and already does for Kraken, Huobi and Binance price data. They also lied about an exclusivity contract for a hackathon.
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Nice points - I will see if I can get the API3 enthusiasts to prepare a response for you. Thank you!

I’m trying to react polite to the seemingly rather impolite criticism. There are some misinformation and some outright “aggressive” arguments visible in the text.

First and foremost, this proposal here IMo is about “Are you a fan of being able TO TRADE / PROVIDE LP for / with API3 on Bancor” and not “Do you hate or love APi3 personally and what rumors have you heard and because you hold some competitors token you want to bash a little bit, here is your chance?”

A) the rest is (with time-lock) vested. See proposal details.

B) Mesa exploit buyer sold almost immediately again for just little profit. There are multiple sources for all this. Because naturally we as API3 investors were the first to be sensitive about this issue and the team could provide us with an explanation and we saw the guys transactions, so nobody felt concerns for more than a few days in the begin.

C) You are making blind allegations regarding api3 team exploiting / selling / being the bad guy. That’s just your opinion and bla-bla. I don’t even know how to reply to opinion- but not fact-based bla-bla. Honestly. If I now say “I believe the opposite to be true and api3 team to be the good guys here” your opinion stands against my opinion and we don’t discuss facts but chit-chat about gut-feelings or sth.

D) the DAO funds are still there, you can see it in the aragon client. Their time-locked api3 are also there. The rare movements of any funds or payments to e.g. dOrg (for developing the next version of the DAO) are also clear. You are very misinformed and you don’t show ambition to research for yourself, before making so bad allegations.

A) and here your real intention comes to light. You’re insulted by that coindesk article’s title “chainlink killer” but at the same time either to illiterate or too ignorant to read in the api3 blog how the team said that is not their choice of words, they are not coindesk and surely cannot be blamed for what other entities are writing?

B) you’re saying they lied about the hackathon. I’m saying they didn’t. So, what now? If you’re not Sergey and I’m not Burak then we can’t know and we’re just two guys in the internet fighting with opinions but 0 facts.

Again, I would like to remind you that Bancor isn’t the best place in my eyes to FUD against an unloved and obviously very much feared competitor.

I’m also surprised we’re not talking about trading volume or liquidity or some other factually visible and debatable things. Opinion? Yeah, I don’t like LINK, so what? Still a very good asset with much volume and many holders.

API3 has significant volume, we can provide high liquidity, and it has almost 17000 holders after relatively short time. You love that or you want to childishly discuss about the narrative LinkVSapi3

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Ok, I will just ignore all the ad hominem attacks and try to dissect this wall of text to explain why API3 might not be the best token to list on Bancor.

  1. The teams hold 80% of the tokens, which is not very balanced. Especially not for a project that is supposed to be a DAO. The team effectively controls 80% of all voting power. This is a red flag for a scam project that could rugpull.
  2. There is a 75% APY promised for staking. This will remove all volume for liquidity when staking goes live in March/April.
  3. For the hackathon: see the URL I provided, where the hackathon hosts told their side of the story. There’s a good reason API3 team shut up afterwards, because they were called out.
  4. You claim there’s good volume but there’s only 10% volume vs market cap (only taking into accout circulating supply). That’s not at all impressive.
  5. You claim there’s high liquidity but no proof, your telegram group has only 21 members. 17000 holders doesn’t mean a thing since 1 person can have multiple wallets.
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It wasn’t a lie. There is a papertrail of public posts from third partys talking about API3s involvement in the ETH India hackathon. The fact that chainlink bought exclusivity rights speaks volumes. On your point about telegram group, you do realise that a large amount of all API3 holders would glady provide liquidity, as it’s basically free yield. It’s very obvious from your opposition to this whitelisting that you have a personal vendetta against API3. Likely a bagholder of another oracle project. On your point against the staking, the APY for staking will sharply decrease as more people do it. Many tokens on bancor have staking rewards. On your point about founder tokens, tokens are in a 3 year vesting period and many team tokens are being used for staking rewards.

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It’s quite obvious that the URL to this thread has been shared in the telegram, and I expect to be ganged up on by a lot of API3 holders. Again, I will ignore the ridiculous ad hominem of being a bag holder. This just showcases my initial point of being antagonistic towards Chainlink.

  1. For the hackathon: again, I will refer to the URL I shared, which was a tweet by the hackathon organizers themselves.
  2. You claim a lot of API3 holders will gladly provide liquidity, but your group has only 21 members. Also, these BNT tokens could be used to expand the liquidity pool of other tokens which have been filled up for weeks on end. Surely any project wants to be listed on Bancor, the question is: which projects has most need for the extra LP space.
  3. For staking: you say yourself a lof of people will stake. If staking APY is low enough that it’s lower than Bancor’s yield, there will not be enough API3 tokens left to provide adequate liquidity. If APY for staking is higher why lock up in Bancor if you can stake?
  4. The point remains that 80% of the supply is controlled by the team, which is a very skewed token distribution.
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Post proof of the 80% distribution.
Also it’s pretty clear to those without vested interests that the hackathon organisers were trying to cover it up (https://youtu.be/oszRMlrmm6o) go to 13:50. Also it’s not ad hominem to suggest that you obviously have some motive for typing out paragraphs. Market forces will eventually find a balance between liquidity provision and staking, as well as the fact that staking won’t be live until april atleast. Also, if you think this token won’t go up in value, what’s wrong with giving it IL insurance?

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  1. 20% was sold to the public. You can check this in the whitepaper, coingecko, wherever you want to check. What happened to the other 80% is trusting the team.

  2. If I have to choose between what the hackathon organisers said themselves vs what some random youtube said, I’ll pick the organisers every single time.

  3. It is, per definition, ad hominem to disregard my arguments just because you believe I’m holding a token of a competitor.

  4. I never said the token won’t go up in value, I said that giving the IL insurance to other projects might be more worthwhile since a lot of pools are filled up.

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Nice discussion going on here!

I know crypto is tribal by nature, and emotions run high when criticizing each other’s projects. I am pleased to see you guys showing some restraint. Please try to keep the discussion respectful, and I look forward to seeing this conversation develop.

:heart:

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So you trust several neutral parties over a party which got payed, sound. The tokens are locked up in smart contracts. It’s trustless. Nobody can unvest them. Look at the etherscan. I’m not just disregarding your opinion, I’m simply saying you might be a bit biased. It makes complete sense to take you opinion with a grain of salt.

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#1 Tokenomics misconception
I don’t understand why you believe the team holds 80% of the tokens. Their tokenomics are this:
35% Ecosystem builders
30% Founders (linear vesting for 3 years + 6 month cliff where they can’t move tokens)
20% Public distribution
10% Partners and contributors
10% Seed investors (2 year linear vesting)
5% Pre-seed investors (2 year linear vesting)

Also, as levilapsley says, the vesting is locked with a smart contract that can be read by anyone on etherscan. You can see this for yourself by sorting wallets by top holders and reading the contracts that hold the most tokens. So you don’t have to trust the team on the remaining 80% of the tokens.

When it comes to ‘balanced’, I think API3 is good. I have seen multiple large projects launching recently where the public distribution is way smaller than seed+pre-sales, and where tokens are released immediately or with time periods like 25% weekly.

#2 Staking/APY
This is an old message from one of the admins in the API3 chat:
“75% is a placeholder value that will be governed by the DAO. 75% was used in the prototype because it was the initial inflation rate in whitepaper 1.0.0. Same thing with the lower limit, 2.5%, it will be governable, but the terminal inflation rate from the initial whitepaper was used as a placeholder.”

#3 “Chainlink killer” / “First party oracles”
As far as I understand it, multiple members of the team operated Chainlink nodes and knew the intricacies in and out. That’s why they decided to make API3 in the first place, as a “second-mover advantage” type of product. Doing this without describing it’s benefits to the “first-mover” doesn’t make sense. Also, the “Chainlink killer” narrative has never been pushed by the founders. It first appeared (sensationalistically) on Coindesk, and has since been pushed by community members, but never the founders.

As for the volume it has been low lately, but I am sure it will pick up once we near the DAO launch date in March/April. If you look at Uniswap volume in December and January it has been very high compared to the marketcap.

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@Manta_Ray
As far as I can tell, nobody in this thread is attacking you. Reading through your responses, I see many examples of exaggeration of the facts to fit your narrative. I will attempt to address a few of them here.

Also full disclosure, I hold API3 as well as Chainlink.

1. Only 20% of the total supply was sold to the public, a large part (8% of circulating supply) of which was bought super cheap using an exploit . This was something a lot of people warned about, but the team chose to continue anyway using this platform. One might think they were in on this exploit. Since then another 7% was sold on the open market (which is 35% of what was sold to the public) with no communication what this was for. Did they already burn through the crowdsale money of +50M USD in three months? Weird.

Post Moretem from Gnosis:
# API3 IDO incident - Post Mortem

## Summary

** The first auction of the API3 IDO was settled at a clearing price of $0.56 (equal to the 4th lowest limit price set by the API3 team’s sell step function). Given supply and demand at the time, the intended “fair” clearing price for this batch would have been $0.98 [[1]. All successive batches cleared at the intended prices.*
** This is a serious incident that caused the API3 team to raise ~$680.000 less in proceeds from the sale (~5% of total proceeds). The address buying the tokens at the cheaper price resold them shortly after at a price ~$1, taking most of the profit (see timeline section for trade information).*
** The malicious solution did not violate any limit prices and only matched orders by the API3 team as well as the account submitting the solutions. Investors buying the token were not affected by the settlement. Tokens were later resold at a price ~5% above the intended initial clearing price.*
** The malicious solution exploited a limitation in the optimization criterion of Gnosis Protocol which was publicly disclosed by Gnosis in February 2020 . It circumvents one of the main features of Gnosis Protocol (fair distribution of trading surplus between maker and taker) allowing a user to “take” other orders exactly at their limit price. That strategy is not risk free as it makes the malicious trader vulnerable to bad counter trades.*
** Throughout the remainder of the sale, the API3 team raised >$14M with a total surplus of $1.45M more than their limit orders specified. We believe that on other popular trading protocols this value would have likely been captured by frontrunners/arbitrageurs.*

1. The teams hold 80% of the tokens, which is not very balanced. Especially not for a project that is supposed to be a DAO. The team effectively controls 80% of all voting power. This is a red flag for a scam project that could rugpull.

I have attached a snapshot of the token distribution (this was taken from their medium page) It is clear to see that the founders hold 30% and not 80% of all tokens as you have suggested. Voting power is very much in the hands of the DAO.

1. Their antics of antagonization of competitors. Their whitepaper mentions Chainlink 18 times. They got named Chainlink killer in an article on Coindesk, which is owned by the same organisation that is a backer of API3 (DCG). They have written many passive agressive mediumarticles focused on attacking the main player in the Oracle space, using false narratives of a first-party oracle, which is something that Chainlink enables as well and already does for Kraken, Huobi and Binance price data. They also [lied ] about an exclusivity contract for a hackathon.

*The whitepaper lists Chainlink a total of 8 times in the body of the whitepaper and a further 10 times in the references. Hardly the 18 times that you suggest. Sure I agree that there could have been more references made to other oracles but the founding team are merely providing examples of why they are not going down the same paths as Chainlink. Highlighting issues and proposing solutions is hardly being antagonistic.

As for the exclusivity contract for the hackathon, this was resolved in late December. Please see snapshots of tweets.

1. There is a 75% APY promised for staking. This will remove all volume for liquidity when staking goes live in March/April.

Can you please explain further. I do not see how you have come to this conclusion.

I would invite you to also disclose your holdings for brevity but understand if you wish not to do this.

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Tweet snapshots.

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tweet2

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This post was flagged by the community and is temporarily hidden.

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The team ran the biggest nodes on chainlink for over a year

@mbr “fxxxAPI3”? even without his aggressive content the name alone is just insulting

There’s no way one can discuss with such FUDers. It’s like a virus, everyone thinks he’s a Trump and no decency nowhere

The level of fear and hate that api3 provokes in linkies… incredible

I just came here to vote, seethe more lol.

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Thanks for the catch - I flagged the post.