114/4/24 ‘Garbage Coin’ API3 Analysis

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1. Insufficient Practicality and Adoption

• Limited real-world applications: Although API3 emphasizes the innovative concept of “first-party Oracles,” mainstream DeFi protocols (such as Aave, Compound, Uniswap) still choose to use Chainlink or built-in Oracles, with low adoption rates for API3's dAPI and a lack of significant partnership cases to support it.

• Misestimated demand: There is a strong demand for highly reliable data in the blockchain world, but most projects prefer the more mature Chainlink, making it difficult for API3 to change the existing ecosystem.

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2. Technical and Governance Risks

• Low code update frequency: Slow development progress, relatively inactive GitHub activity, and community doubts about the team's enthusiasm and commitment.

• Centralized governance issues: Although there is a DAO structure, actual voting is concentrated among a few large holders and funds, leading to potential imbalances.

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3. Token Economics and Price Pressure

• Inflation and unlocking pressure:

• API3 has a larger allocation of reserved tokens for the team, advisors, and DAO inventory.

• The long-term unlocking rhythm can create market selling pressure, especially when the fundamentals cannot support the price.

• Long-term price weakness: Compared to other Oracle projects, performance is sluggish, and most investors have categorized API3 as a project that “failed to meet expectations.”

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4. Intense Competition

• Overwhelming market share of Chainlink: Chainlink not only has a high market share but has also launched the Cross-chain Interoperability Protocol (CCIP), expanding its domain, making it difficult for API3 to shake its position.

• Other emerging Oracles: Projects like Band Protocol and Pyth also offer innovative solutions, competing for attention.

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Conclusion

Although API3 has a creative concept, it currently shows weakness in adoption, technological advancement, market confidence, and token performance. Without significant breakthroughs or partnerships, it is highly likely to continue deteriorating, potentially becoming one of the “zero projects” after the funds are exhausted.