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API3 is a collaborative project to deliver traditional API services to smart contract platforms in a decentralized and trust-minimized way. It is governed by a decentralized autonomous organization (DAO), namely the API3 DAO. Therefore, API3's code is open source and its operations are transparent. At the core of the API3 network is the Airnode, an oracle designed for first-party oracles. the Airnode is essentially a lightweight cloud service that wraps the API backend and makes it accessible on the Blockchain. This means each API is served by an oracle that is operated by the entity that owns the API, rather than a third- party. The API3 DAO will govern over the dAPIs or data feeds comprised of the aggregation of these oracles. oracles operated by the API providers themselves. API providers operating their own oracles means they would be signing their responses with their private keys at the smart contract platform protocol-level, which is the best proof that the data is not tampered with. Moreover, first-party oracles are private by default, as a third party cannot observe the raw data from the API being processed, which allows them to be used in a wider variety of use cases natively. A data feed comprised of first-party oracles would be more cost-efficient compared to one employing middlemen, as one needs to pay middlemen both for their services and to incentivize them against attacking the data feed (referred to as the middleman tax in Section 3.2). In addition, a data feed comprised of first-party oracles will need fewer oracles, as it would not need over-redundant decentralization at the oracle level to protect against attacks from third-parties. Assuming that each API is typically served by at least two third-party oracles, data feeds powered by first-party oracles would be at least 50% more efficient in terms of gas costs, by a conservative estimate. First-party oracles also provide much-needed transparency in terms of the data 11 API3: Decentralized APIs for Web 3.0 source and the degree of decentralization. Since each API provider will operate an oracle—which will be visible on-chain—the number of oracles serving a data feed will accurately represent how decentralized it is, as there is a one-to-one mapping between oracle and data source. Furthermore, the API providers would publish their on-chain identities through off-chain channels, which would allow the users to verify whose data they are consuming at a given time. Finally, having the API providers operate the oracles solves the legal issues mentioned in Section 3.4, as the API services no longer need to be licensed to a third party and the API providers receive the entire revenue. Furthermore, API believes this solves the rent-seeking third-party oracle problem, and allows the funds to be redirected to the group that is doing the heavy lifting, the API providers. Incentivizing API providers aligns their financial interests with the ones of the API3 ecosystem, resulting in a strong combined incentive between the two.