Sasha Milic discusses API3's decentralized oracle network

0:01i'm ashton addison from the block west capital for investment pitch media and the Crypto Coin Show and today on blockchain interviews we have sasha malice head of the dapi team at api3 sasha welcome to the show thank you so much for taking the time to come on thank you for having me you're very welcome i'm excited to dive into the world of oracle's apis

0:24development and all of that interesting stuff that not as many people are familiar with that are just involved with bitcoin ethereum and some of the larger cap coins i would love for you to kick off our discussion by first of all just giving an overview of api 3 and what the platform does and the services that it provides for the cryptocurrency industry

0:46okay so i'll try to keep it brief api 3 is the dao that maintains and manages a network of first party oracles so that's that's it in a sentence but i think i should probably get into a little bit about the oracle space because that's kind of a prerequisite to understand what we do how does that sound definitely yeah i'd love to hear more about oracle's and first party oracles

1:14okay so oracle what oracles do is that they bring data onto the blockchain and so i guess i'll go a little bit back to basics the blockchain is a very isolated network for security reasons the nodes that are able to talk to each other they don't talk to any other networks and why that's important is because the only data what this means is that

1:41the only data on the blockchain is essentially ownership data who owns what token or what information is in what address there's no notion of an outside world on the blockchain so natively the only applications you can build on something like a general blockchain like ethereum is like moving tokens around is essentially plus a few other things like it's very

2:06limited but it's not i don't want to make it sound like it's a limitation of the blockchain it's just because of the high security the high security requirements of the blockchain that makes it so it doesn't communicate with other networks which means like it doesn't communicate with apis which is how all other computer systems basically communicate

2:25these days so it's blocked off from from off chain data so to use a specific example of why this is important i imagine people that are listening are familiar with d5 like i off the top of my head i don't know of any defy app that doesn't use price data so typically ethereum price but all sorts of other prices so it's kind of ironic but the price of a crypto token isn't on the

2:50chain it's decided by it's mostly decided by external markets so pretty much all of d5 necessitates price speeds so one way you can think about it is one one category of applications that oracle's enable is d5 just through creating price speeds and enabling that kind of information on the blockchain definitely yeah i think that's a great start sasha and yeah without these

3:16oracles there would just be a bunch of tokens and how would you value them how would you determine what the price is on different exchanges and get the average and bringing that external information onto the blockchain into the internal world to actually have a value for those tokens so you talked about how api three has a dow that also includes first party

3:36oracles like what does it mean to have a first party oracle as opposed to just an oracle so you can't hear any background noise still right no it's good okay okay sorry it's like it's so noisy here first party oracles versus third party oracle so this is actually a term we came up with in the api three white paper but i've seen a couple of people

3:59using the term since then so it's essentially the difference between a first party oracle and a third party or oracle is does the sorry is the person that owns the data the person that transmits it to the blockchain that wasn't explained very well so third-party oracle essentially gets information from somewhere else typically a web api like with crypto

4:24prices it queries a crypto price api and then transmits that to the blockchain but a first party oracle is the data provider themselves so in this case an api provider we would be transmitting that data directly so our solution arguably centers around this idea of first party oracles being better in a lot of contexts mainly because you eliminate like a middleman

4:48that transmits the data which which reduces security risks and oftentimes reduces costs as well because a lot of third-party oracle solutions have multiple third parties querying the same api so cutting out that layer in a lot of contexts especially if you're getting information from web apis it just makes more sense to get it from the data source from the web api directly instead

5:13of relying on third-party nodes definitely that makes sense and can you talk about with api 3 they have a dow that has is it a conglomeration of different oracles and what's the benefit of having this doubt that's a good question i'm trying to figure that out myself like the wow the dow space is very experimental and i think there's a lot of like growing pains that everyone i

5:38know that works for one is like i mean i mean ultimately i think it's a good thing but so is your is your audience familiar with what a dao is for the most part you know dows dowser fairly early on with decentralized autonomous organizations and the functionality that they can have i think is still limited but you know they've been around since since

6:02the ethereum original dao it's just a matter of how much functionality is there in the dao yeah so i think with a dow it's it turns into kind of this organism that's going to move in ways and evolve in ways that you might not exactly predict like compared to like a traditional corporation so a lot of what i can say about the project and where it's headed is kind of

6:25Up to the future but one one one of the main reasons we have a dow is to create arguably i mean nothing's purely decentralized but arguably it's a more decentralized product when the decision-making is made in a decentralized way and it's not sufficient that just the protocol is quote unquote decentralized it's it's who's who's making the decisions in

6:53terms of changes and what gets deployed so i think that's the general idea but one one thing i've noticed that's a huge benefit to us and the community is that it really enforces transparency like any time money moves out of the treasury it has to be done through a proposal and done through a boat so you can see who's working for the dow what they're

7:14doing what they're paid where money is going what kind of decision all the decision making for the most part is transparent and i think that's really important when it comes to data which i think is going to become more and more of a big topic i mean it is in the kind of off-chain world with regards to like quote-unquote fake news and whatnot and which data is reliable and

7:34which one isn't i think it's really important to be really explicit about where the information is coming from so that's part of our solution is you know having first party oracles it's like by default you know where the information is coming from versus a third party there's also the transparency of the creation and maintenance of the network through the dao so it's like you

7:59you really know where the data is coming from and how the decisions were made with what is done with that data those little bit roughly that was a bit rambly but i hope i hope something there made sense yeah i know that makes sense sasha and i'm curious about you know just to go back to this first party oracles versus third party you know with a first party oracle and

8:19they're actually providing the external information as well is that more or less decentralized than a third party oracle and is it about you know being as decentralized as you can or is there some other goal within that's that's such a good question the whole thing about decentralization is like a whole nother topic like i heard someone say it recently and maybe it's a

8:41common quote but decentralization isn't the goal it's a tool like as soon as it becomes a goal it becomes very nebulous because there's always pockets of centralization everywhere so i don't even like the term fully decentralized or because there's a yeah there's always little pockets of control here and there and it's a matter of just being able to balance the

9:03trade-offs of that sorry what was your question it was oh oh third party versus first party and in terms of decentralization right yes okay okay that's a really good question because it's almost not really it's not really about decentralization and i'll explain why i mean what i mean by that like in the extreme case if there's a certain type of information that is only

9:26provided by one api provider like like let's say like some kind of banking information that comes from a particular bank like they're going to be the only people that serve that kind of information then if you throw on ten third-party nodes to transmit that data it doesn't become any more decentralized because the bottleneck in terms of decentralization

9:51is the data source so if there's just one data source you know having 10 third-party oracles versus a first party oracle like neither is more decentralized so it's like part of our solution it's kind of a subtle point because i'm glad you bring it out part of it is just being explicit about the fact that in the oracle problem the bottleneck in terms of

10:12decentralization is the data source itself so and i think a lot of i think a lot of i don't like to pick on other or other oracle projects because i think everyone is really trying their best but i've seen a lot of data feeds currently being used that advertise like 20 to 30 nodes in their network but i know that there aren't like 20 to 30 quality crypto price apis like

10:39clearly there's multiple nodes querying the exact same api so it creates this illusion of being more decentralized of there being more independent data points than there really are so the question of first party versus third party i think is just recognizing the fact that this centralization bottleneck is in the data source and then kind of tailoring a

10:58solution to that in the context of web api data i do want to make it clear there's other kinds of data you might want third parties third-party nodes for but this is specifically for querying a web api and bringing it onto the blockchain does that make sense definitely sasha yeah thank you for that and i understand now it's really the source of the information

11:17doesn't matter how many roads you take to get to you know the final destination it's what was the source and how incredible decentralized is that information now i'd love to just jump into you know the workings of api three right now and with your team you know are you currently just providing you know those oracle data source information into

11:39the defy world to help bring price feeds and other information into d5 is that pretty much the focus right now and is your team currently expanding that out with as d5 continues to explode so we're not currently live to make that clear our oracle node is actually currently in auditing but in terms of like our goals in terms

12:05of providing data yeah there are a lot of like some of the api providers that have joined the network they are crypto price apis and also other types of price apis and then we do get requests for price feeds but i think just from conversations with the team it seems like we're all in agreement that things are defy is not going away but there's going

12:30to be new blockchain applications like blockchain is going to go beyond d5 and in order to go beyond d5 you need new new types of data it's like what i said earlier like price feeds pretty much enable d5 like what other types of data will be able to enable the new the new blockchain thing so i think yeah yeah price feeds are important clearly and they will be for a

12:54long time and i don't think the ideal architecture has been figured out yet it's actually really hard not just a hard engineering problem it's a hard statistical problem for various reasons so yeah price feeds and iterations on price feeds i think are going to be a thing for a while but we also really care about how do we enable the next kind of generation of

13:13blockchain applications definitely that sounds great sasha and thank you for that clarification and i'm curious moving forward you know as you mentioned it's not live yet is there any tentative schedule for what's the next big thing and the next major steps for the team yes so the next the next milestones i guess in the next six months or so is yeah get air node out live in production

13:42On ethereum and other evm compatible chains and then move on from there depending on demand make sure it's integrated with all the api providers we've already signed on to the project and build out data feeds again depending on demand yeah it's also tricky because like you want to serve demand but at the same time if you're trying to enable new new types of blockchain applications you

14:10kind of have to foresee future demands so it's like a balance of what people currently want versus what's going to enable interesting projects in the future definitely yeah that's a great point sasha and if people are looking to learn more about you know oracle feeds why api threes solutions are unique and more about the dao and with the upcoming releases

14:33what's the best way for them to stay involved and learn more about api 3. So our website's pretty easy to find if you google us but a lot of the conversation happens in discord so if you're interested in actually talking to us about our solution or even throwing your thoughts in there we have a lot of discussion groups and stuff so that's in our discord you can find that

14:56on our website a link to a discord and also we put a lot of work into writing long form content on medium like we have a lot of articles about about our solution and about the types of products that it can enable like we put a lot of effort and now i'm thinking back i'm like no no one in crypto very few people in crypto seem to have a long intention like a long

15:19attention span so i'm like maybe we shouldn't be working so hard on 10-minute articles and just throw it a couple of tweets every once in a while but if you do if you do like reading more long-form content please check out our media that sounds great sasha i will leave all those links as well in the description box below for the viewers all the best with you and your team moving

15:40forward i'm looking forward to seeing what the future holds for api three and let's follow up in the near future thank you so much ashton you