Bessie Liu

API3, an oracle data feed provider, is moving into a new phase of an ongoing tech rollout.



API3’s first phase brought a self-funded decentralized application programming interface, or dAPI. This was automated oracle infrastructure from a single source data feed, according to Ugur Mersinlioglu, a product owner at API3.



The second phase of dAPI is the release <a href="https://medium.com/api3/introducing-phase-2-managed-dapis-b204670d2545">of managed aggregated data feeds</a>. This new phase enables users to select specifications, such as deviation and time. The team behind the project <a href="https://twitter.com/API3DAO/status/1691804516549902425">announced</a> the second phase on Wednesday.&nbsp;



Oracles are commonly used in Web3 to bring off-chain data onto the blockchain to enable smart contract functionality. They’re a key plank in how information reaches decentralized protocols.&nbsp;



Typically, in Web3, oracle providers have a decentralized middle layer where various different data sources feed the price of the Oracle, according to Mersinlioglu.



The problem, Mersinlioglu explains, is that this doesn&#8217;t guarantee that all these data sources are completely different.



“You could still have a middle layer of 30 people, but they all use one data source and that is not decentralization,” Mersinlioglu said. “We don’t want &#8216;some rando in the middle&#8217; running this oracle node. We want to get data directly from the API so we don’t have to trust another layer.”



For this reason, API3 ensures that all their oracle nodes are operated by the API directly.&nbsp;



“These companies, it is their core business model to sell data, and if they put the wrong data onchain with us, it’s visible, their reputation is on the line,” Mersinlioglu said.



<h2 class="wp-block-heading">The four phases to achieve decentralized APIs</h2>



According to Mersinlioglu, there are currently around three to four hundred active self-funded APIs.



This type of infrastructure is designed like a pay phone and can be used by people who might need price notifications.



The newly-announced second phase builds on that initial stage of work.&nbsp;



“You basically buy a subscription, where we will cover the gas costs and maintain this together with the API providers of oracle nodes on the respective chain that you want to consume it on,” Mersinlioglu said.



In a forthcoming phase three, API3 will introduce an auction function built on top of oracles that will enable anyone to come in and make a bid, receive tamper-proof signed data from providers, and update the price on-chain.



This is possible because there are times when there are values in updates that are not defined by managed parameters.



“They don’t need to essentially wait. They can force an update by paying for it,” Mersinlioglu said.



The final phase for API3, according to Mersinlioglu, would be to create a Nexus Mutual for oracles, referring to the decentralized insurance alternative platform.



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API3 wants to make oracle data more transparent

Michael Bodley

<div id="highlights-block_245540472118b82752189a8e66aaa978" class="highlights">
 <ul>
 <li>The solution is available on more than a dozen blockchains, with plans to expand to additional protocols in relatively short order</li>
 <li>Most random number generators actually have a limited data set, the startup told Blockworks</li>
 </ul>
 
</div>



A random number generator that relies on quantum mechanics to produce smart contract-driven data sets empowered by blockchain technology has launched on more than a dozen cryptocurrency protocols.&nbsp;



API3, in partnership with a group of researchers from the <a href="https://anuquantumoptics.org/" target="_blank" rel="noreferrer noopener">Australian National University’s Quantum Optics Group,</a> has dubbed its new product, ANU QRNG, the first “true” random number generator for smart contracts.&nbsp;



Ten of the 13 blockchains the startup is launching on don’t yet have a random number generator available, the company told Blockworks. Some of those protocols use a random number generator that doesn’t employ quantum technology — meaning their data set is limited, or a “pseudo random number,” in industry speak.&nbsp;



A truly randomized dataset, combined with blockchain technology, allows for a number grouping for the likes of crypto gambling that cannot be manipulated to serve the needs of the house. To produce random numbers now, the company said, startups use what amounts to a &#8220;random&#8221; <a href="https://blockworks.co/news/what-are-seed-phrases">seed phrase</a> that allows for the data set to be predicted — and perhaps taken advantage of — if the holder or a nefarious third party wants to do so. 



“Say we take something simple, like a coin flip, for example,” Ugur Mersinlioglu, product manager at API3, said. “If you have a conflict with a ‘pseudo’ random number, you’re going to notice, at some point, that certain patterns are going to be repetitive…Whereas, if you have a process that practically doesn’t spit out any detectable patterns, you can actually say that this is not capable of [manipulation] by anybody.”



The quantum randomness in this case stems from measuring the random fluctuations in phase and amplitude of an electromagnetic field in a vacuum, according to the <a href="https://qrng.anu.edu.au/contact/api-documentation/" target="_blank" rel="noreferrer noopener">project documentation</a>.



The service is available on blockchains including <a href="https://cms.blockworks.co/?s=Avalanche" target="_blank" rel="noreferrer noopener">Avalanche</a>, <a href="https://cms.blockworks.co/?s=Fantom" target="_blank" rel="noreferrer noopener">Fantom</a>, <a href="https://cms.blockworks.co/?s=Metis" target="_blank" rel="noreferrer noopener">Metis</a>, <a href="https://cms.blockworks.co/?s=Moonbeam" target="_blank" rel="noreferrer noopener">Moonbeam</a>, <a href="https://cms.blockworks.co/?s=Polygon" target="_blank" rel="noreferrer noopener">Polygon</a> and RSK — with plans for additional future integrations.&nbsp;



The company doesn’t make money on the random number generation, instead tapping it as a loss-leader into its other product lines, such as its oracle solutions and data integration services, including a validation pool that relies on staking its native token to function.



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