Reference → dAPIs → Understanding dAPIs

dAPIs are data feeds ​

dAPIs are on-chain data feeds sourced from off-chain first-party oracles owned and operated by API providers themselves and are continuously updated using signed data. dApp owners can read the on-chain value of any dAPI in realtime.

dAPIs can serve a variety of continuously updated streams of off-chain data, such as the latest cryptocurrency, stock, and commodity prices. They can power various decentralized applications such as DeFi lending, synthetic assets, stable coins, derivatives, NFTs, and more.

Data feeds values stored on-chain ​

API providers, owners of first-party Airnodes, store data feed values on-chain as individual beacons that in are turn sourced by the Api3ServerV1.sol➚ contract as dAPIs.

Api3ServerV1.sol manages the definitions for hundreds of dAPIs, each of which is an aggregated value of multiple beacons or the value of a single beacon.

• Self-funded dAPIs: sourced from a single data feed (beacon)
• Managed dAPIs: sourced from multiple data feeds (beacons)

Functions in Api3ServerV1.sol expose dAPIs values to API3 Market proxy contracts. dApps do not call the Api3ServerV1.sol contract directly but use intuitive proxy contracts to get the value of a dAPI.

The role of Airnode ​

Airnode is a flexible off-chain module that can support multiple protocols. Most noticeably are its implementation of the request-response protocol (RRP) and data feeds.

An Airnode is owned by an API provider and integrates itself along side their API operations. Functionality within Airnode monitors one or more API operations hosted by an API provider and looks for a preset deviation of a data feed value (e.g., plus or minus 1%). When the deviation threshold is reached, Airnode pushes the new value on-chain into the beacon store. Each beacon represents a value from a single API operation.

In the diagram above, company ABC has two API operations (B and C) and a single Airnode that monitors the API operations. When the deviation threshold is reached for either operation it will update the corresponding beacons, in this case 1FeexV6A and 1AC4fMwg.

Note that company XYZ has an operations (A) that provides the value of ZIL/USD just like operation (B) from company ABC. A dAPI can now aggregate the value of operations (A) and (B) since they are the same data feed but from different companies.

dAPI roadmap ​

Currently dAPIs are under an expansive development cycle and as of August of 2023 both Self-funded dAPIs and Managed dAPIs are available.

Development and expansion of dAPIs beyond self-funded and managed dAPIs will include OEV and service coverage. More details on these concepts will be forthcoming. Please feel-free to ask questions about the evolution of dAPIs on Discord➚.

Self funded dAPIs ​

Self-funded dAPIs were made available in March 2023. These are community funded and community manage dAPIs that are only sourced from a single data feed (beacon). The funding is used to pay gas costs incurred by an Airnode as it places the dAPI's value on-chain when a deviation threshold is reached.

Any dApp owner can fund a dAPI and any dApp owner can use the dAPI. Meaning that if three dApp owners are using the dAPI and only one provides funding, the other two would benefit. However this is not best practice for the two that do not provide funding as their dApp could fail if the original dApp decides to discontinue further funding. So the community benefits from a community funding approach.

Single source data feed ​

Unlike managed dAPIs, self-funded dAPIs are sourced from one data feed (beacon). This may not make them ideal to use on a production chain.

See the guide Subscribing to self-funded dAPIs and learn more on how to fund a dAPI. Also see the guide Reading a self-funded dAPI proxy and learn how to use a proxy contract address to read a dAPI.

Managed dAPIs ​

A managed dAPI is actually the process of upgrading a self-funded dAPI to become a managed dAPI. Here the dApp that does the upgrade pays a small fee which is used to pay gas costs incurred by the Airnode to place the dAPI value on-chain. Unlike self-funded dAPIs, API3 will manage the gas cost with the fees collected. This is advantages as the dApp owner does not need to worry about the community based funding model that might cause the dAPI to shut down due to lack of funding.