How the emergence of Decentralized API (DAPI) and blockchain oracle is revolutionizing the off-chain and on-chain data transmission
The transfer of information from one point to another or simply the relay of data packets between multiple blockchain entities has proven to be essential and one of the most important aspects of blockchain and web3 technology. However, these arrangements and processes are achieved through different application communication mechanisms.
APIs have been used by legacy system developers to build a centralized app’s data endpoint; however, with the advent of consensus blockchain technology, there is an emergence of new interaction of APIs known as a decentralized API.
The peer-2-peer synchronous communication and transfer of data packets from one decentralized blockchain application to another are possible through a cross-medium interactive mechanism such as Oracle, DAPI, RCP, and inter-process communication.
However, it is worth noting the system complexity of the peer-2-peer blockchain communication process, which encapsulates both the protocol and application layers of consensus blockchain technology. The succinct implementation of blockchain application layer inter-process communication connections requires the technical establishment of endpoint connections and architecture in both centralized and decentralized settings.
In this article, we will attempt to elaborate on the importance of the inter-chain communication mechanism from Representational State Transfer (REST) and the relay of data packets. But first, let’s understand what Decentralized APIs and Oracles are
What is a Decentralized Application programming interface?
Decentralized API is a new iteration of synchronous peer-2-peer transmission of data packets from one web application to another in a fully decentralized manner. Decentralized API is an application programming interface service that is intrinsically interoperable with off-chain and on-chain blockchain and web3 environments to enhance the transfer of data within decentralized applications.
In a traditional web2.0 legacy environment, a centralized platform uses application programming interfaces (API) as a mechanism to provide a digital solution that allows web and mobile applications to interact and communicate with one another by transferring data packets and services.
Consequently, the decentralization application programming interface provides an additional layer of service and enhances the transfer of information from one decentralized application to another in a peer-to-peer form. However, other decentralized peer-to-peer communication components could also be deployed on blockchains such as oracle, which connects off-chain data to on-chain data using smart contracts.
There are identifiable differences between centralized and decentralized application programming interfaces that are worth mentioning. The legacy API uses an asynchronous connection to transfer data from a central data point, which signifies a central point of failure; if the API platform that provides the gateway services goes offline, every other web or mobile app that uses the API will lose connection.
However, in a decentralized application programming interface, the API gateway in a decentralized environment redirects the GET, POST, and PUT API queries to another Representational State Transfer (REST) API endpoint through protocols like HTTPS, WebSocket, GRAPHQL, or an inter-process communication (IPC).
As stated by the lead dash protocol developer, Evan Duffield, with decentralized API people or programs will be able to query blockchain data as though they had access to a full node themselves
“Developers don’t need to download, validate, or store the 10GB blockchain, yet they still have the same security as a full node and much better privacy.”
The decentralized application programming interface and the legacy API provide an interactive interface between the application and the user. Thus, through the remote procedure call (RPC) functions, the user can query information on the blockchain such as the block number, nodes, and the ability to send a transfer to the RPC interface.
The decentralized gateway might be a public API or simply a backend of an application. However, the data in a decentralized application programming interface are gathered and organized in a centralized arrangement through asynchronous connections which are maintained in near real-time bi-directional synchronization with a direct link to the backend application.
What is a Blockchain Oracle?
Consensus blockchain oracles are entities that connect off-chain and external proponents to the blockchain by enabling smart contracts to execute a set of instructions based on input from the real world. The executed instructions allow the decentralized web3 ecosystem to access real-time or existing data packets, sources, legacy systems, and advanced peer-2-peer computations.
One of the functions of an oracle is to serve as a bridge that connects real-world data to an on-chain smart contract in decentralized ways.
A decentralized oracle network (DON) allows the creation of a two-way smart contract (hybrid smart contracts) where both off-chain and on-chain infrastructure are combined to interoperate to advance decentralized applications that react to real-world applications in real-time. Examples of blockchain oracles are "ChainLink and Pyth Network".
The implementation of Decentralized Oracle Networks (DON) as a decentralized system reduces abstracting complexity faced by developers and users while proving seamless protocols and application layer scalability, confidentiality, incentives-based security, transaction fairness and minimizes trust.
The Impact of Decentralized Application Programming Interface (DAPI) And Blockchain Oracles
The implementation of decentralized API has transformed the transfer of real-time data packets from one web or mobile application to another in a peer-2-peer decentralized form by bridging traditional legacy system API to an on-chain decentralized API. Subsequently, the established connection between off-chain and on-chain data has influenced the functionality of the on-chain smart contracts and oracle protocol to increase blockchain data integration.
Fundamentally, blockchain smart contracts cannot inherently interact with data and systems existing outside their native blockchain environment, hence, relies on external data aggregators such as oracle (Chainlink & API3) to deliver off-chain data to on-chain smart contracts and vice versa.
However, with the integration of decentralized APIs, oracles can also aggregate near-real-time mobile and web application data to enhance on-chain data packets. Oracle and the Decentralized API use input, compute-enabled, and cross-chain mechanisms to transfer bi-directional data between different blockchain protocols, which cancels out a single point of failure in the centralized settings.
The use of decentralized APIs and the oracle in a consensus blockchain environment increases the assets’ record accuracy and transaction data integrity, thus, the emergence of decentralized applications that utilize off-chain data. As explained by chainlink in one of their documents that Compute-enabled oracle and decentralized APIs
“Use secure off-chain computation to provide decentralized services that are impractical to do on-chain due to technical, legal, or financial constraints. This can include using Keepers to automate the running of smart contracts when predefined events take place, computing zero-knowledge proofs to generate data privacy, or running a verifiable randomness function to provide a tamper-proof and provably fair source of randomness to smart contracts.”
The use of oracles and decentralized APIs will change the dynamic of off-chain and on-chain data transfer and provide additional use cases to blockchain ecosystems such as Decentralized Finance (Defi), Dynamic NFTs, and Gaming, Insurance, Enterprise, and Sustainability.
The advancement of consensus blockchain and web3 technology have attracted various application layer development, which has increased the adoption rate and the use cases. However, with widespread blockchain technology adoption and its exponential increase in its application, blockchain is approaching an emerging stage where data can be used bi-directionally between multiple blockchain protocols and applications.
Consequently, decentralized APIs and oracles are leading the way when it comes to cross-chain data transmission and inter-chain relay of information. Thus, oracle and decentralized APIs provide a striving environment for cross-chain data connectivity and seamless application interactivity.
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