What is Airnode?
Airnode is a tool allowing off-chain API providers to easily become on-chain data oracles.
Decentralized data feeds (dAPIs) are essential for the Web3 space and the decentralized applications (dApps) within it. Oracles are data providers for decentralized applications, serving as single sources of verifiable truth. They offer data that can be easily ingested by smart contracts.
Airnode makes it simple and straightforward to create first-party oracles by bridging the “decentralization gap” between off-chain APIs and on-chain data consumers.
Once set up, it requires virtually no maintenance as it is designed around the “set it and forget it” philosophy.
How Does Airnode Work?
Airnode’s few key features:
- One-time setup: The service is designed such that it only requires initial setup and virtually no further intervention (i.e., the “set it and forget it” design philosophy).
- Ease of deployment: It’s simple to configure and deploy and requires only some technical knowledge of how APIs work.
- Pay-as-you-go: Users only pay for the service once they start generating traffic.
- No cryptocurrency requirements: No crypto is required from the data provider to use Airnode. The date requester routes all gas and other fees.
Setting up an Airnode involves installing and running an instance of an Airnode node, and connecting it to the off-chain API on one end. On the other hand, it connects to an on-chain Airnode protocol smart contract. This connection allows smart contracts to interface directly with web APIs, just like traditional web applications.
What Problem Does Airnode Solve For Decentralized APIs?
Airnode addresses a problem of on-chain data availability and consumption which can be illustrated with a simple metaphor — that of the chicken and the egg:
Essentially what the problem boils down to is that if there is no data available to be consumed on-chain by smart-contract-based apps then there won’t be any incentive to build new apps. This would, in turn, cause a continuous lack of data consumption and so on. It’s a vicious cycle of stagnation analogous to the economic concept of a poverty trap.
Airnode aims to fix this data demand and supply issue by making it as simple as possible to provide first-party, verifiable, off-chain data to the decentralized world.
API3. (n.d.). API3 documentation. API3.
https://docs.api3.org
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