📂 Introduction

# Why use Beacons?

As on-chain first-party data feeds, Beacons offer a simple and trusted composability layer for building more transparent, reliable, and cost-efficient dAPIs, dApps, and more.

One major advantage of Beacons is data source transparency: a Beacon is operated by a singular first-party oracle and therefore carries the reputation and trustworthiness of that data provider.

By combining Beacons, dAPIs can gain resiliency and reliability without sacrificing the trustworthiness and transparency of individual Beacons. This is a compelling alternative to the obscurity of other "decentralized" oracles that do not report the number nor identities of the APIs powering their data feeds. One only has to look at the numerous instances of mis-reported cryptocurrency prices by third-party oracles for evidence that greater transparency in data feed composition will enable more resilient data feeds, fewer catastrophic failures, and an overall better user experience.

Beacons are also a cost-efficient mechanism for obtaining trustworthy off-chain data. In situations where a standalone Beacon is reliable enough and further decentralization would create unnecessary overhead, costs can be minimized by leveraging this singular source of data. For situations requiring dAPIs, Beacons enable the transparent composition of the appropriate number of data sources for the specific use-case.

Another major advantage of Beacons is their simplicity. Developers can quickly integrate Beacon data by accessing on-chain contract storage.

Lastly, select dAPIs composed of curated sets of Beacons will power new applications demanding specific security guarantees. These guarantees will be provided by API3 in the form of coverage service, payable in the case of dAPI malfunction.

Altogether, Beacons offer developers an improved solution for accessing off-chain data in a simple, transparent, reliable, and cost-efficient manner. This new primitive is appealing both for traditional oracle use-cases and for novel, previously infeasible blockchain applications.

Last Updated: 5/15/2022, 11:04:51 AM