apidays LIVE India 2022: Accelerating India’s digitisation with APIs May 11 & 12, 2022 The DeFi defiance – enabling new ecosystems Giovanni Lesna, Head of Enterprise & Partnerships at API3 ------------ Check out our conferences at https://www.apidays.global/ Do you want to sponsor or talk at one of our conferences? https://apidays.typeform.com/to/ILJeAaV8 Learn more on APIscene, the global media made by the community for the community: https://www.apiscene.io Explore the API ecosystem with the API Landscape: https://apilandscape.apiscene.io/ Deep dive into the API industry with our reports: https://www.apidays.global/industry-reports/ Subscribe to our global newsletter: https://apidays.typeform.com/to/i1MPEW

1. The DeFi Defiance- enabling new
ecosystems
APIdays India
11 May 2022
api3.org

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3. api3.org
Presenter
Giovanni Lesna
Enterprise Lead &
Partnerships
gio@api3.org
CMC
MBA Digital Business (UB)
Masters in Blockchain (UB) ; BCom Hons (UNISA)
LinkedIn: Giovanni Lesna
Partners

4. 1.What is DeFi
2.DeFi Ecosystem
3.DeFi Protocols & DAOs
4.API3, connecting DeFi to TradFi
api3.org
Agenda

5. What is DeFi
api3.org

6. What is DeFi:
api3.org
▪ Builds on traditional financial (TradFi)
concepts
▪ + Add Distributed Ledger Technology or
Blockchain
▪ = DeFi (mainly on Ethereum) and EVM chains
▪ Traditionally banks, centralized finance (CeFi) govern and control peoples’ assets –
centralized entities
▪ While DeFi is decentralized, transparent and permissionless
▪ DeFi is challenging legacy capital and its monopoly
▪ A means to emancipate the unbanked and complacent majority
▪ The DeFi movement = DeFi Defiance

7. Disrupting:
Centralized monopoly capital
api3.org
DeFi is where:
• Individuals are the sole custodian of their assets (wallets, private keys)
• Open source and developer tools that allow new instruments/dApps to
be “buidled”
• Traditional and newly tokenized assets + automation (smart contracts)
• Transparency of issuance, repayments, loans, collateral
• Mechanism for decentralize community governance (DAO)
DeFi grew from $690 million >
$11 billion from (2020) > $100+ billion
(2022) Source (Faisal Khan)

8. DeFi Ecosystem evolved
api3.org
• From DEX’s(exchanging), Lending,
hedging to stable coins are born
• Digital bearer instruments
• Smart contract interaction
• Censorship resistant

9. What DeFi enables:
api3.org
• Combining or ‘tokenizing’ /wrapping legacy products into digital –
where BC is verifiable, immutable .
• Gold bars, fractional ownership, backed by fiat currencies
• Issued, traded and settled on the blockchain
• DeFi elevates Trust, but not Performance (high transaction fees
when network is congested, latent speed)
• Generally DeFi cheaper to transfer value compared to banks
• Yield

10. DeFi Visualized
api3.org
Source: Philipp Sandner, (2021)

11. DeFi Ecosystem
api3.org

12. api3.org

13. Exponential growth
api3.org
2021 & 2022 Q1
$1.6bn exploits
(Chainalysis, 2022)
Global crypto owners near 300
million, predicted to hit 1 billion
by the end of 2022
(crypto.com, 2022)

14. api3.org
dappradar.com

15. DAOs – Decentralized
Autonomous Organizations
api3.org

16. What is a DAO?
api3.org
• Multi-org network (advocacy groups)
• + blockchain technology
• + smart contract functionality
• + wisdom of the crowd
• - architect away the kernels of organizations
• = trivial to spin up borderless companies, charities and
investment groups
• with secure treasuries, inclusive voting, fully transparent audit trails and
no intermediaries.
• New meritocratic organizational design

17. In other words
api3.org
“building communities of meaning around
economic collaboration is the primary form
of strategic advantage firms have”
i.e. the API Economy?

18. Web3 is the next phase of
governance.
DAO Stats:
$11.3bn Total Treasury
4832 DAOs
1.7m governance token holders
54.7k decisions
Stats by Deep DAO
Excellent read: Gnosis Guild
api3.org

19. DeFi Protocols
api3.org

20. Open Lending & Borrowing
Protocols
api3.org
• Users can borrow against most supplied assets; the
collateralization ratio and liquidation threshold
depends on the asset, as does the liquidation
penalty, which anyone can get as a bonus for
liquidating an unhealthy loan.
• A bank on blockchain
• DAO governance for disputes and vote on interest
rate
• Place collateral/money market rules
• Borrow/lend DAI
• DAI pegged to USD
• Essential for financial ecosystem

21. Decentralized Derivative
Markets and Insurance
api3.org
• These protocols utilize crowdsourced
mechanism in managing risk. This brings an
offering additional risk management tools to
DeFi.
• Wisdom of the crowd
• Sports betting (Augur)
• Price hedging and options (Hegic)
• Derivatives/perpetuals (Synthetix, dydx)
• Pooled crowd insurance cover (Nexus)
• Essential to a risk management

22. Exchanges & Wallets
api3.org
• Think of a mechanism to swap value
without a custodian or middleman. The
smart contract acts as the trusted party.
• Allows exchange of any ERC20 token
and ETH on chain
• Contribute to liquidity pools and earn
commissions
• Fee distributed among liquidity
providers and ability to earn token
rewards.
• Wallet used to store , send and receive
tokens
• Essential to a convert and store value

23. Stable coins
api3.org
• Tether and Paxos, Circle USDC (fiat collateralised) –
DAI(Crypto Collateralised), UST - algorithmic
• The requirement of spendabiity and store of value is
essential. Hence stablecoins used for everyday
transactions, can earn interest, cheaper fees and near 1%
volatility, generally.
• Allows to convert to near stable or price pegged value
• Used to hedge against volatility
• Used as a way to off-ramp into fiat
• Essential to a store and maintain value

24. API3, as a DAO & Protocol
api3.org

25. API3 DAO = Trustless Governance
api3.org | 24
>

26. api3.org | 25
Airnode codebase is fully open source, audited, and actively developed by the API3 Foundation and its partners.
API3 Partners
What is ?
▵ API3 is a DAO : Decentralized Autonomous Organization
▵ Since 2018, API3 predecessor worked on connecting
APIs to Web 3.0. Limitations drove us to innovate.
▵ Holistic view closing supply and demand gaps
acknowledging the chicken-and-egg problem
experienced in growing ecosystems.
▵ Integrations to multiple EVM compatible blockchains, inc.
Ethereum, Polygon, Fantom, Harmony, Plasm,
TomoChain, Conflux + blockchain agnosticism.
▵ Cloud agnosticism: AWS, Google etc for seamless plug-
and-play.
▵ Investors inc. Digital Currency Group, Placeholder,
Pantera, CoinFund, Accomplice, Hashed.

27. What problem is API3 solving?
api3.org

28. ▵ Trusted data input as critical as the encryption and
consensus algorithm.
▵ Web 3.0 applications cannot call APIs directly, due to the
way blockchains achieve consensus
▵ Current API connectivity solutions work through
middlemen, with third-party operators bridging blockchain
applications to APIs
▵ Third-party solutions are:
– Unsecure, exposing data to man-in-the-middle
attacks
– Difficult to operate, requiring expert management
– Expensive, as middlemen take a cut of each
transaction
The Web 3.0 API
Connectivity Problem
api3.org | 27

29. Airnode — A Gateway to
Blockchain Applications
api3.org | 28
▵ Airnode is a simple to use, open source API gateway
that allows APIs to directly connect to Web 3.0,
without active management or the use of third parties.
▵ Quick set up (minutes)
▵ Set-and-forget (maintenance free)
▵ Free for API providers to deploy
▵ Airnode allows the API provider to retain full control of
their data, allowing them to be fully GDPR compliant
when transacting in Web 3.0 environments
▵ First-party solution (see the difference vs. third-party
oracles)
The Airnode codebase is fully open source, audited, and actively developed by the API3 Foundation and its partners.

30. Market data
provider
(at source)
Data feeds
Gold Price
Write answer on-chain
Consume data
$2,000
Check on-chain
(previous) price
Compare response
0.5% deviation?
Check API price
On-chain
update
Continuous flow of data;
From a single reputable source;
Feed updated at desired % deviation
threshold or x-minutes.
1 datafeed = 1 ticker set i.e. GOLD/USD
api3.org | 29
AirKeeper
dApp Smart
Contracts
A risk protection or “covered” service

31. Connecting DeFi to TradFi
APIs, the glue of the internet
api3.org

32. Real world data to dApp (Web2)
Plug-and-play – REST API
Seamless integration with existing cloud providers
Monetize your Web2 data to Web3
api3.org
API’s - the glue for the ecosystem

33. APIdays (London): Open Insurance & Smart Contracts
APIdays (New York): The API Economy in Financial Services
APIdays (Singapore):From DAOs to Ecosystems - The next big
trend in Web3.
api3.org
Other topics

34. For the vanguards:
▵ What’s Web3?
▵ The DeFi report
▵ DeFi market size
▵ DeFi exploits
▵ Trending dApps
▵ What are data oracles;
▵ What’s a DAO?
▵ Further reading and materials
Web3 & DeFi context
Learn more about Airnode and web3
datafeeds:
▵ What is Airnode?
▵ Airnode: technical docs
▵ What is a beacon?
▵ Beacon: technical docs
▵ What are dAPIs

35. api3.org | 34
Navigate Web3 with
API3
Giovanni Lesna
gio@api3.org
P A R T N E R S

36. gio@api3.org
api3.org