Api3 Crypto: Smart Investment Or Risky Gamble?

Launched in December 2020, API3 is an Ethereum token that aims to bridge traditional APIs with blockchain networks. It is a decentralised application programming interface (API) that enables API providers to run their nodes without relying on centralised oracle monitoring. The API3 token is at the core of the platform's governance, security, and value capture mechanics. It is also the governance token for the decentralised autonomous organisation (DAO). API3 has a market cap of $2.182 trillion and is ranked #282 on CoinGecko. As of July 2024, API3 is trading at 1.79, a 9.82% increase since the beginning of the trading day. While some analysts predict a positive uptrend for API3, others claim it is a bad long-term investment with high risk.

API3's price history and future predictions

API3's price history has been a rollercoaster ride since its launch in December 2020. It hit an all-time high of $10.31 on 7 April 2021 and is currently trading at $1.79 as of 8 July 2024, 54.86% below its peak. However, it is 275% higher than its all-time low of $1.24 on 2 December 2020. In the past month, the API3 price has increased by 15.10%, outperforming the global cryptocurrency market.

API3's price prediction for the next 90 days is estimated to be around $1.23, and it is predicted to be worth $1.51 by the end of 2024. Looking further ahead, API3 is expected to reach $4.04 in 2025, but its price could drop to $0 by 2026 and remain there until 2030.

The short-term outlook for API3 is bullish, indicating a possible price reversal and making it a potentially sound investment for the 2024 bull run. However, it's important to remember that cryptocurrency investments are highly volatile and subject to market dynamics.

According to CoinCodex, the API3 coin value is expected to rise by 16.40% and could reach $5.13 by 19 February 2022. Based on the internet's year-over-year growth, the API3 target price is set at $5.70. Wallet Investor, on the other hand, stated that API3 is a bad long-term (one-year) investment with high risk. By 2027, prices are predicted to average $4.327, and API3 may not be able to surpass bitcoin anytime soon.

In contrast, Price Prediction and DigitalCoinPrice provided more optimistic forecasts. Price Prediction expects API3 prices to average $6.18 in 2022, $9.07 in 2023, $13.31 in 2024, and $20.10 in 2025. By 2027, the price is expected to hit $42.44 and climb to $122.80 by 2030. Similarly, DigitalCoinPrice predicts that API3 prices will grow to $6.03 by the end of 2022, $7.15 by 2023, $7.13 by 2024, and $9.65 by 2025. By 2030, the price is expected to surpass $6.93, reaching $21.03.

It is important to note that these predictions are based on algorithms that analyse past performance, and investors should always do their research before investing, considering the coin's fundamentals and potential risks.

API3's market cap and competition

API3's market cap has fluctuated since its launch in December 2020. As of February 2022, its market cap was $17.168 million. As of September 2024, its market cap is $2.182 trillion.

API3 is an oracle service that provides blockchain applications access to off-chain and real-world data. It focuses on creating decentralized APIs (dAPIs), which allow blockchain-based applications to interact with data and services from the traditional web. This fills a significant gap in the blockchain ecosystem, enabling more complex, secure, and reliable decentralized applications (dApps).

API3's dAPIs aggregate data directly from first-party oracles on the native chain, enhancing data reliability and eliminating the need for centralized points of failure. This is in contrast to oracles, which are a form of middleware that sits between APIs and smart contracts, increasing costs and centralization.

API3's unique features include its focus on decentralization and governance, as well as its blockchain agnosticism. The API3 DAO (Decentralized Autonomous Organization) plays a crucial role in the project's decision-making, giving the community a say in its development. This enhances transparency and reduces the risk of centralized control.

However, it is worth noting that API3 may face competition from specialized oracles on alternative blockchains, as it is particularly well-suited for Ethereum. As of January 2022, API3's market cap was $140 million, and it was ranked 360th.

API3's price and market cap have seen significant changes since its launch. As of April 2021, its all-time high was $10.31, and as of August 2023, its all-time low was BTC0.00002199. Its current market cap and ranking fluctuate, with rankings of #281 and #282 noted in September 2024, and a market cap of $136,026,379.

The risks of investing in API3

API3 is a cryptocurrency with a market cap of $2.182 trillion as of September 14, 2024. It is designed to bridge traditional APIs with blockchain networks, allowing API providers to run their nodes without relying on centralised oracle services. While this presents an appealing investment opportunity, there are several risks to consider:

Volatility and Market Dynamics

Cryptocurrency investments are highly volatile and subject to dynamic market forces. API3 has been on a "rollercoaster ride" since its launch in December 2020, and its price has fluctuated significantly. While it reached an all-time high of $10.31 on April 7, 2021, it is currently trading significantly below that value.

Regulatory and Security Concerns

Cryptocurrencies like API3 are susceptible to errors, hacking, and a lack of regulation. The decentralised nature of blockchain technology means that API3, as a DAO, is governed programmatically through an on-chain voting mechanism. This lack of central authority and regulatory oversight may introduce risks related to security and governance.

Competition and Innovation

API3 faces fierce competition from other similar crypto projects. It may struggle to stand out in an increasingly crowded market, especially if it fails to innovate and bring unique value to the market. The team behind the project is relatively unproven, and the community supporting it is small, which could hinder its long-term growth prospects.

Financial Distress

There is a high chance that API3 will experience financial distress in the coming years. The cryptocurrency has generated negative returns for investors over the last 90 days. Its performance has been bearish, and it currently falls under the 'Nano-Cap' category, indicating a small market capitalisation.

Oracle Dependence

While API3 aims to address the Blockchain Oracle Problem, it is still dependent on oracles for integrating off-chain data with blockchains. Oracles are third-party technologies that incur additional costs for the network, and they can introduce centralisation and increase expenses for API providers.

In conclusion, while API3 presents an interesting use case and has the potential to exploit a growing market, it is a high-risk investment. Investors should carefully consider these risks and conduct thorough due diligence before deciding to invest in API3 or any other cryptocurrency.

How to invest in API3

API3 is an oracle service that provides blockchain applications access to off-chain and real-world data. It is currently traded on several exchanges, including Binance, OKX, Mandala Exchange, DigiFinex, and Huobi Global. It can also be purchased on Uniswap, where it is paired with wrapped ETH. Here is a step-by-step guide on how to invest in API3:

Step 1: Research and Understand API3

Before investing in any cryptocurrency, it is essential to conduct thorough research to understand the project, its technology, and its potential risks and benefits. API3 is a decentralised API service that aims to bridge the gap between off-chain data and blockchain applications. It provides a more direct and convenient method for smart contracts to access real-world data.

Step 2: Assess the Risks and Potential

Investing in cryptocurrencies carries inherent risks due to the volatile nature of the market. API3, in particular, may be considered a high-risk investment as it is still in the early stages of development. While it offers a unique solution to the Blockchain Oracle Problem, there are potential challenges and risks associated with its implementation and adoption. Therefore, investors should carefully consider their risk tolerance and financial situation before deciding to invest.

Step 3: Choose an Exchange

API3 is available on multiple exchanges, including Uphold and Kraken, which are popular options for investors in the United States, the United Kingdom, and other countries. It is crucial to compare the features, fees, and security measures of different exchanges before selecting one that aligns with your preferences and requirements.

Step 4: Fund Your Account

After selecting an exchange, you will need to create an account and fund it with fiat currency or other cryptocurrencies. Ensure that you understand the deposit and withdrawal options, processing times, and any associated fees. Some exchanges may offer different funding methods, such as bank transfers, credit/debit cards, or crypto transfers.

Step 5: Purchase API3

Once your account is funded, you can proceed to purchase API3 on the chosen exchange. Carefully review the available trading pairs, such as API3/USDT or API3/USD, and place your buy orders accordingly. Consider the current market price, order book depth, and liquidity before executing your trades.

Step 6: Store Your API3 Tokens Securely

After purchasing API3 tokens, you will need to decide how to store them securely. You can choose between hot wallets, which are online or software-based, or cold wallets, which are offline hardware devices. Each type of wallet has its own security considerations, so it is essential to research and select a storage option that suits your needs and risk tolerance.

Step 7: Monitor the Market and Stay Informed

Investing in cryptocurrencies often requires active monitoring and staying informed about market trends, project developments, and industry news. Keep track of API3's price movements, technical indicators, and any updates from the API3 team to make informed decisions about your investment. Remember that the cryptocurrency market is highly volatile, and the value of your investment can fluctuate significantly.

In summary, investing in API3 involves understanding the project, assessing your risk tolerance, choosing a suitable exchange, funding your account, purchasing API3 tokens, securely storing them, and staying informed about market dynamics. Remember to always conduct your own research, diversify your investments, and never invest more than you can afford to lose.

API3's decentralised APIs (dAPIs)

API3 is a decentralised network that provides real-world data to blockchain applications through decentralised APIs (dAPIs). dAPIs are blockchain-native, decentralised API services that are built by combining multiple provider-operated oracle nodes into aggregated data feeds, without the use of third parties. They are designed to feed blockchain applications with timely and reliable data directly from sources without intermediaries.

DAPIs are on-chain data feeds sourced from off-chain first-party oracles owned and operated by API providers themselves. They provide DeFi with a secure and transparent solution that is verifiably decentralised data feed from curated sources. dAPIs have a standardised, code-friendly interface that intends to abstract away technical complexity. They exist in a fully permissionless format and on-chain as smart contracts that are updated by first-party oracles.

API3's dAPIs are fully decentralised API services composed of multiple data provider-operated nodes. They differ from existing decentralised oracle solutions in that they include the APIs underlying the data feed in the scope of the solution. This enables them to provide superior data transparency all the way to the factual data source level, compared to existing decentralised oracles, which do not consider the data source API to be within the scope of their solution.

DAPIs are decentrally governed data feeds, composed of first-party oracle nodes. They are fully and transparently governed by a Decentralised Autonomous Organisation (DAO) of dAPI consumers, service providers, industry experts and partners. This new level of transparency, cost efficiency, decentralisation and alignment of data provider incentives with those of the solutions they serve, will lead to a proliferation of new data feeds available to the growing community of smart contract developers worldwide.

Frequently asked questions