Author: Luna Chu Source: medium
Let’s start with a brief introduction to API3.
API3 is an innovative first-party oracle that differs from other oracles in that its data does not need third-party aggregation and relay, but is provided directly by the first-party data source. This is achieved through the core component Airnode, which allows API providers to easily run their own oracle nodes, without intermediaries, and directly publish data sources (dAPIs) to any dApp interested in their services.
API3 is building the zk layer2 of OEV. OEV is a subset of MEV, referring to oracle-related extractable value. When the oracle provides the latest price to the Dapp, there are opportunities for liquidation and arbitrage of assets. API3’s layer2 specifically captures the value of OEV and feeds it back to the Dapp for them to enjoy the benefits.
There have been many articles analyzing the future prospects of API3. Here, I will focus on some key data of API3.
TVS
The metric to measure oracle projects, unlike DeFi, is Total Value Secured All Oracles (TVS), which is the value of the oracle’s security guardianship. According to Defillama data, API3’s TVS is $1 billion. In comparison, Pyth’s TVS is $4.8 billion. The FDV of API3 and Pyth are $380 million and $3.8 billion respectively. So, if we compare TVS for market value, API3’s current price is undervalued by around 2.5 times.
Taking a look at the historical changes in API3’s TVS. A very noticeable feature is a significant leap in API3’s TVS in 2024. In 2023, TVS was around $10-20 million. After 2024, there was a rapid increase. In January and February 2024, TVS saw its first increase from $20 million to $135 million. From March onwards, there was a leap, raising TVS to the $800 million to $1 billion range. By late May, TVS remained consistently above $1 billion.
From TVS perspective, API3 has made significant progress this year, with TVS growing nearly 50-100 times.
On-chain data
According to on-chain data, the total supply of API3 is 133 million tokens, with circulating supply at 111 million tokens, accounting for 83.4%.
Analysis of large holders on-chain
Holder Address 1: API3 staking address
Holder Address 2: Binance exchange wallet
Holder Address 3: Treasury
Holder Address 4: Tokens transferred from the Treasury, possibly for specific purposes
Holder Address 5: Tokens transferred in 2022 and not moved
Holder Address 6: OKEx exchange
Holder Address 7: Coinbase wallet
Holder Address 8: Coinbase wallet
Holder Address 9: Upbit wallet
Holder Address 10: Kraken wallet
Currently, the API3 staking amount is 61.79 million tokens, accounting for 55.67% of the circulating supply and 46.45% of the total supply. Compared to other staking projects, API3’s staking rate is particularly high. Looking at historical data, after reaching 60 million tokens staked in February 2022, API3 has consistently maintained over 60 million tokens staked. During this period, it experienced a bear market in 2022 and a bleak market in 2023, indicating that most stakers are very optimistic about the project’s future.
In terms of overall token distribution, 61.55% is within the project team and smart contracts, with the largest portion in the API3 staking contract, followed by the non-circulating API3 tokens. Excluding this portion, the actual control by the project team and smart contracts is not very high.
It seems that API3 tokens are not heavily controlled by whales, as 137 whale addresses hold only 18.51% of API3 tokens. This indicates a relatively decentralized token distribution, with whales not holding a large amount of chips on-chain. In the past week, there hasn’t been significant changes in the holdings of API3 whale holders. API3’s share in centralized exchanges accounts for 14.74% of the total supply, which is at a moderate level.
Overall, looking at on-chain data, we can conclude that:
1) API3 has a very high circulating supply, and the majority of the locked tokens are from the foundation and require DAO voting for control. Institutions and project teams have unlocked tokens early on.
2) From the staking perspective, 60 million API3 tokens have been staked long-term, showing that most people have high hopes for the future.
3) Token distribution is relatively decentralized, with no major whales controlling a large amount of tokens.
