Decentralized API (dAPI)

Understanding Decentralized API (dAPI)

APIs play a crucial role in the digital economy, serving as a fundamental component of digital solutions and driving the API Economy.

While APIs have traditionally been centralized, decentralized platforms leverage blockchain technology to offer fully decentralized APIs.

Decentralized API (dAPI)

Decentralized API (dAPI)

Empowering Seamless Communication

An Application Programming Interface (API) is a well-defined and well-documented mechanism that enables communication and data transfer between web and mobile applications.

Online companies can expose their data and services as marketable service modules through APIs, which developers can then integrate into their applications.

This significantly enhances software development efficiency in terms of both cost and time.

APIs have become the essential building blocks of the digital world, replacing the need for developers to create every feature of their program from scratch.

Decentralized API Gateways

In a decentralized system, the API gateway redirects queries to other API endpoints, which could be the backend of an application or a public API provided by the app’s trading partner.

The API gateway handles the appropriate protocols, security, and data conversions during runtime.

Centralized Data Storage

In a centralized setup, data is stored in a central data store, part of the API platform.

This central data store maintains near real-time bi-directional synchronization with connected backend applications and business partners through asynchronous connections.

API queries are sent directly to the central data store in this scenario.

The Oracle Problem

The “oracle problem” refers to the inability of smart contracts to access data not already available on the blockchain.

Smart contracts within these applications cannot directly access APIs from the blockchain in which the contract resides due to the consensus-based security provided by decentralized network nodes as the application platform.

A solution is needed that allows smart contracts to access API data while maintaining the security assurances of the underlying system, minimizing the introduction of new attack surfaces.

Enhancing Data Source Transparency

Decentralized API services address this problem by managing various data providers within the blockchain.

What sets dAPIs apart from existing decentralized oracle solutions is that they encompass the APIs that serve as the data source within the context of the solution.

This distinguishes them from current decentralized oracles that do not consider the data source API within the scope of their solution, providing greater transparency down to the actual data source level.