API3, a pioneering blockchain oracle provider championing the shift from conventional third-party oracle networks to first-party oracle solutions, has rolled out its managed data feed service. This service is designed to support the growth of Total Value Locked (TVL) on Polygon zkEVM, an initiative by Polygon Labs, a leader in developing Ethereum scaling solutions for Polygon protocols.
This development comes in the wake of Polygon zkEVM’s launch earlier this year, which aimed to harness the capabilities of zero-knowledge proofs while ensuring EVM equivalence. Since April 2023, API3 has been at the forefront, offering first-party oracle services to Polygon zkEVM. The recent unveiling of managed dAPIs on the API3 Market now empowers builders with access to multi-source, decentralized data feeds (dAPIs) delivered by first-party oracle nodes, complete with native-chain aggregation.
The DeFi landscape, with lending protocols and perpetual DEXs at its core, hinges on real-time market data. This data necessitates on-chain integration via an oracle. A significant portion of DeFi applications, representing tens of billions in TVL, predominantly rely on push-type oracles. However, existing blockchain oracles often come with high fees and limited source transparency, sometimes introducing vulnerabilities.
Addressing these challenges, API3 has crafted a novel push oracle solution centered around first-party architecture. This innovation facilitates DeFi protocols, currently using push oracles on other EVM chains, to seamlessly transition to Polygon zkEVM. The move is poised to accelerate the adoption and scaling of DeFi, potentially reaching the next billion users.
API3’s groundbreaking push oracle is constructed around the Airnode first-party oracle node. This design eliminates the need for intermediaries, paving the way for a safer and more efficient method to bring real-time market data on-chain. With features like native-chain aggregation and multi-source data feeds, developers can tap into more dependable data, minimizing downtime and enhancing data accuracy.
In a departure from traditional oracle designs that involve third-party node operators, API3’s first-party push oracle sources data directly from the origin. These oracle nodes, managed by the data providers themselves, ensure that cryptographically signed data is integrated onto the blockchain. This approach offers unparalleled data source transparency, setting a new industry benchmark.
Prominent DeFi platforms like Aave, Compound, and various DEXs have historically depended on push oracles. But API3’s innovative push oracle is set to redefine the playing field. This model harmonizes the interests of data providers, networks, and dApps. The introduction of API3’s managed dAPIs heralds a new industry standard, granting direct access to a diverse range of real-world data, encompassing crypto, forex, equities, and commodities.
The DeFi ecosystem is already benefiting from the DAO-managed oracle service of API3. Platforms like QuickSwap Perps and Dovish, a perpetual swap protocol, are leveraging dAPIs for precise pricing. MantisSwap, a DEX focusing on stable assets trading, employs dAPIs to bolster their protection mechanism against stablecoin depegging, highlighting the enhanced security features of dAPIs for DeFi applications.
Tropykus, a lending and borrowing dApp that branched out from AAVE V2, utilized self-funded dAPIs for a swift launch on Polygon zkEVM. With dAPIs requiring minimal alterations to tried-and-tested code, developers gain a competitive edge, potentially enabling rapid deployment on emerging networks.
API3’s collaboration with Polygon zkEVM underscores the pivotal role oracles play in scaling Ethereum. The upcoming generation of blockchain oracles promises heightened security and transparency through first-party oracle solutions. API3 DAO remains enthusiastic about exploring the vast potential of decentralized finance as the capabilities of smart contracts come to fruition.
Jack Melnick, Head of DeFi BD at Polygon Labs, remarked, “It’s very exciting to see API3 deploying on Polygon zkEVM, enhancing the DeFi ecosystem with an innovative push oracle solution. The integration of managed dAPIs with Polygon’s scalable infrastructure marks a significant step towards a more transparent and secure future for decentralized finance.”
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