The API3 project was created to help solve an underlying problem with blockchain-based projects, an issue commonly described as “the blockchain oracle problem”. Simply put, the oracle problem arises because blockchains cannot bring reliable data on-chain or off-chain without the use of costly third parties called blockchain oracles.
The API3 project allows data providers to build, maintain, and monetize dAPIs (decentralized APIs), or APIs that meet Web3 standards for decentralization. dAPIs allow Web3 protocols and smart contract providers to effortlessly bring data on-chain without third-party involvement.
API3’s main product, Airnode, is a fully-serverless oracle node that allows API providers to deploy and operate their own first-party oracles in a cost-effective manner. By essentially functioning as a lightweight wrapper around a conventional API, Airnode allows API providers to operate their own oracles without in-depth know-how, on a set and forget basis.