Definition Of AirNode In Cryptocurrency

This decentralized web has been the incarnation of the next internet. How the world transfers assets with the use of blockchain is revolutionized by it. Web 3.0, since the advent of the internet, has had the most significant growth potential for organizations. Definition Of AirNode In Cryptocurrency, Features of Airnode, Airnode protocol, Integration of API.

Airnode gives a simple way to start with this technology, being an open-source web3-API middleware that allows any web API to be connected easily to the blockchain application. Decentralizing the core of Web3 security has become an issue for API providers, making smart contracts unable to link directly to APIs that provide access to real-world data and services, and Oracles acting as a bridge between blockchains and the real world. 

Airnode works as the API economy’s Web3 oracle solution in this game, which is maintenance-free, a serverless platform that links any web API to any blockchain application while traditional oracles require the interference of a third party. Airnode eliminates the need for a third-party intermediary for a firm’s connection to the blockchain. Third-party oracles demand substantial fees. Any business can directly link to blockchain apps with Airnode while keeping 100% of the revenue. It is a free and open-source platform that ensures that a user’s connection to the blockchain always remains under their control.

THE API Gateway for Blockchains (AirNode)

If I was to describe it to a blockchain person, I would simply refer to Airnode as a node designed for first-party oracles. Thinking of the available oracle right now, imagine if they were to be operated by the API providers which are the owners of the data, rather than a third party. We typically get into a business If they are a potential user after that. Most blockchain projects talk to other blockchain projects, and that is it.

However, this is simply not an option for trying to solve the problem. API connectivity problems. When describing Airnode to API personnel, I refer to it as “an API gateway for blockchains.” The obvious solution is the infrastructure that provides the API connection, when a problem is defined as API connectivity, while the oracle problem implies a standalone oracle as a solution, thereby necessitating the third-party middleman.

Definition Of AirNode In Cryptocurrency

Also called an oracle node, an API gateway is comfortable for communicating with API providers, which is not something that can be done for all oracle nodes. But to understand why, you need to simply consider what an API gateway is, which is a lightweight cloud service that wraps the API backend, making it accessible over the Internet. Also, it may provide 
additional functionality such as limiting rate, authorization, caching, etc. The important thing to note here is, that setting up an API gateway on a cloud provider requires you to click some buttons and maybe do some DNS configuration once, after which you don’t need to operate an API gateway. This is a managed service that will sustain itself until you take it down.

A Piece Of Cloud Service Infrastructure (Airnode)

The definition is not only good for getting a fact across but also acts as a blueprint of what one is willing to build. Airnode acts as an API gateway. It’s a piece of cloud service infrastructure but not a blockchain node. It’s very convenient because the people that will be running Airnode already have a lot of experience with cloud providers and their entire infrastructure is already hosted on a cloud provider. In other words, they have zero experience in operating blockchain nodes. This is designed to deliver a cloud service ( a full set of functionality), providing that with a unified service that doesn’t require micromanagement from the user. The API gateway which was described above is a perfect example of a cloud service, and due to the similarity, it shows how Airnode would be used to provide a cloud service.

Definition Of AirNode In Cryptocurrency

For the below 3 reasons, an air node could be deployed as a selfless function, resulting in a good litmus test for deciding if a piece of software can become part of the common cloud infrastructure when offered by AWS, GCP, or Azure, etc.

Why We Should Care

The two types of technical innovation in which one makes the car go X% faster, compress images with Y% less signal loss or cut down on transaction gas costs by Z%. Competition is fierce in this arena, and anyone who promises you more than a 10% improvement without any additional drawback is probably swindling you. These marginal improvements most of the time, when it comes to business, which is also the reason academics who obtain state-of-the-art results do not instantly quit and start their own business.
The second type of technical innovation is much more inconspicuous, and even trivial also boring for the sharpest of technical minds. However, they possibly created business models that weren’t possible before. Airnode is one of those, in a way, provides improvement (0 to 1) which actually ends up having a significant commercial impact that is fully serverless, with an already available kind of application and an already available kind of hosting solution. This when brought together, as a pair makes it possible for API providers to extend their existing business model to the blockchain. More importantly, Airnode being reliable doesn’t require is also feasible for a large number of APIs.

What Will Come With The Rest Of This Series

There will be a half-technical series about what Airnode is, and its unique technical aspects, leading us to some of the peculiar design choices we made. This should be particularly interesting too:

  • Members participating in the API3 DAO who want to know more about what will be driving the services
  • The potential users of Airnode, that are not necessarily within the API3 context
  • Developers who want to contribute to Airnode, either through API3 DAO grants, or because it’s an interesting open-source project
  • Readers who are just looking for interesting stuff about oracles

Few Tips To Note

  • The First-Party Oracles design: this is integral to the API3 solution which means that each API served by an oracle is operated by the entity that owns the API rather than a third party. This document shows the benefit of using a first-party oracle and also using Airnode to solve some problems
  • Disintermediation’s benefit: This is simply a solution to intermediaries’ first-party oracle whereby the oracle operates on the API  themselves. This first-party oracle is private default, just like a third party that cannot observe the raw data from the API being processed, allowing them to be used in a wider variety of use cases natively.

A data feed that is composed of first-party oracles compared to employing middlemen, would be more cost-efficient, as one needs to pay middlemen both for their services and to incentivize them against attacking the data feed which is referred to as the middleman tax.

  • Signing of Data by off-chain: In this case, the API providers sign their data using their private key off-chain, serving it over a regular API endpoint. Here third-party oracles call this endpoint getting the signed data and posting it to the chain. The authenticity of the data that it is not tampered with by the third party oracles using the public key of the API provider can be verified on-chain. Although the solution to eliminate the risk of data tampering at the oracle level is essentially a half measure. Depending on the third party oracles continues the ecosystem to suffer issues caused by the dependence on third-party oracles, and, in addition, requires modifications at the API side to implement off-chain signing.

API Providers Operating Oracles Barriers

The following are the barriers to oracle onboarding and operation.

1. Typically traditional API providers are not more familiar with blockchain technologies 
than the general public. This even applied to. the ones that curate cryptocurrency market data and their main operation is the collection of data from exchange APIs, processing them, and giving the result through their own API requiring no blockchain-specific know-how. Therefore, they typically cannot readily operate an oracle node with in-house resources.
2. No job market for oracle node operators. Even though some API providers were to obtain the specific know-how needs by hiring the few available node operators that are this would not be a scalable solution.

3. The Operation of an oracle node consumes a lot of resources in the form of manhours and infrastructure costs operating an oracle node is financially infeasible. Unless one is guaranteed significant subsidies or future profits, 

4. API provider to transact with cryptocurrencies is required when operating an oracle node. Specifically, the cost of gas must pay for gas costs in the native currency. (e.g., ETH) and receives payments in one or more cryptocurrencies. Due to compliance, legal and accounting reasons this disqualifies the vast majority of API 

Features of Airnode

This is a fully serverless oracle node that is designed specifically for API providers operating their own oracles. It addresses many of the oracles node-related issues API providers face:

1. It does not require any specific know-how to operate. In fact, it is difficult to even speak of an operation. As Airnode is designed to be completely set and forget.

2. Day-to-day maintenance such as updating the operating system or monitoring the node for uptime owing to existing fully. Managed serverless technology is not necessary. It is designed to be stateless, which makes it extremely resilient against any problem. That can cause permanent downtime and require node operator intervention.

3. This is built on services priced on-demand, it allows any API provider to run an oracle for free. And start payment only after generating revenue, meaning that the node operator is charged only as much as their node is used.

Airnode Protocol

API3 believes that an oracle node should be designed to interface APIs to smart contract platforms very well. Rather than as a sandbox that can purportedly be used for any purpose imaginable. Therefore based on this philosophy. The Airnode protocol is designed to follow the self-emergent patterns used by APIs. To achieve as transparent and frictionless of an API–smart contract platform interface as possible.
The most common first used API style follows the request-response pattern. Whereby the user makes a request with parameters, and the API responds as soon as possible. This is the first pattern that Airnode will support because. It’s easy to standardize and integrate with existing APIs that follow the same pattern. 

The Airnode protocol is designed in such a way that the request contract’s sponsor assumes all gas costs. Including the request fulfillment or response transactions. This is successful by each Airnode having a separate wallet for each sponsor. Similar to how cryptocurrency exchanges automatically designate wallets for users to deposit funds. Here, the wallet is funded by the sponsor with the native currency (e.g., ETH). Either in a lump sum or through per-request microtransactions. 
The below following request made by the sponsor is fulfilled. The use of the funds in this wallet has significant advantages
• The gas volatility costs and payment token prices. (e.g., LINK) make it virtually impossible for oracles to set profitable yet competitive prices. 

Definition Of AirNode In Cryptocurrency

• Expecting API providers to be able to convert fiat into cryptocurrency is not reasonable. And funding their node wallets is a part of their day-to-day operations. In 

• Performed attack seen on an Airnode competitor’s data feeds. Oracle nodes that use a common wallet to fulfill requests are susceptible to spamming attackers’ requests to drain their wallets. This can be solved by anode operators by maintaining a whitelist of trusted addresses that they will accept requests. 

This type of attack is not susceptible to Airnode, as a sponsor’s designated wallet is only used to fulfill the sponsor’s requests. And cannot be drained by others.

• All requests have to be fulfilled by traditional oracle nodes with very high gas prices. As they cannot bear their transaction queue being blocked by a single transaction made using a low gas price. Therefore with the Airnode protocol, this is no longer a concern, as each sponsor will have a separate transaction queue. Also, sponsors whose requests are not time-critical would be able to provide. The fulfillment gas price as a request parameter leading to enjoying the service at a much lower gas cost. 

Integrations Of API

When it’s come to integrating APIs to oracles, there is a chicken and egg problem. Nobody is incentives to do integration if there is no existing demand for an API in an oracle ecosystem. Due to lack of integration, if the APIs are not available, nobody develops an application that will create the demand
Hundred if not thousands of first-party oracles will be needed for API3 to reach its full potentiaL. So as to easily set up new APIs or recompose existing ones. This can only be achieved if APIs can be integrated into Airnode in an even more scalable way. An improved version of the proprietary integration tools will be open to this end to source for Airnode. Borrowing from the format of OpenAPI Specification (opens new window), Oracle Integration Specifications (OIS). Explains the operations of an API, the endpoints of an oracle, and how the two map to each other.

Definition Of AirNode In Cryptocurrency

In conclusion, An Airnode user will be able to serve an API. Over their oracle simply by providing its OIS to their node. Integrations made in this standardized format will be easily collected, versioned, and distribute.

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