Streamr and API3 join forces to bring Streamr data streams to smart contracts and decentralized applications, via first-party oracles. Traditionally, data providers have had to rely on third-party oracle solutions to connect their data to blockchain-based applications. This meant that providers were required to either trust third-party middlemen with control over their data, or operate maintenance-heavy blockchain middleware in place of the third-party operator. API3 solves this issue of API connectivity by enabling data owners to provide their data to decentralized applications via a simple and serverless first-party Web3 API gateway; Airnode. Through Airnode, Streamr Marketplace data can be directly fed into on-chain smart contracts, cutting out any and all third-parties.
This yields several benefits: by providing a “set-and-forget” style Web3 API gateway for the provider to run, in addition to a significantly lighter yet more trust-minimised operation, the API3 model has concrete financial benefits. This is because the financial compensation for data sellers involves no middlemen, and thus value can flow directly from consumers to providers. Additionally, data providers remain in full control of who gets access to their data, and are not forced to cede this control to operators external to their organisation.
API3 is able to offer high-quality real-time data streams to the decentralized web. Heikki Vänttinen, co-founder of API3 explains: “This is a long-term partnership that we intend to leverage extensively. Our goal is to enable data providers to sell their data to Web3 use cases without having to rely on middlemen or operate maintenance-heavy middleware. Streamr will enable us to do this; they already have the right infrastructure in place, as well as a substantial amount of both data providers and consumers onboarded. With Streamr, we have a great partner to get more high-quality data on-chain to be utilised by smart contract developers.”
Selling Data Streams to on-Chain dApps
Streamr provides the financial incentives for any data provider to sell their data to consumer applications seeking to use it. This can, for instance, be data from an IoT Data Union, that is sold as a data product on the Streamr Marketplace to a paying customer. Traditionally, this data transport between the Streamr Marketplace and the data consumer is done through an API. But dApps cannot directly connect to APIs.
API3, with the help of Airnode, facilitates this connection, meaning that data can flow freely and directly from the Streamr API to the dApp. Alternatively, in case there is a need for an aggregated data feed, i.e. a dAPI, the data source can be connected to a smart contract that aggregates data from multiple sources into a single value. This creates a more decentralized, trust-minimised data feed, while still maintaining source-level transparency through the use of first-party oracles.
Streamr’s co-founder Henri Pihkala added: “The Streamr protocol transports secure, cryptographically signed, verifiable data points. They would be ideal to fuel data-driven smart contracts, however an oracle is needed in between. By joining the API3 ecosystem we can create the connection and unlock new opportunities for the decentralized data economy. Streamr acts as the scalable, first destination for your raw data flows, while samples or aggregates of the data can then be connected further to smart contracts.”
As a founding-level partner, Streamr will also receive governance rights in the API3 DAO. API3 is controlled by its token holder community, who vote on proposals to take part in the governance of the project. In total, 1% of the API3 tokens are being allocated to Streamr as a founding partner in API3.
Going forward, Streamr and API3 are planning to build a pub/sub Airnode implementation of the Airnode protocol. So far, request/response is the pattern most commonly used for oracles. By providing a pub/sub Airnode solution, the offering gets perfectly integrated into the pub/sub pattern used throughout the Streamr Network.