Insights on the Oracle Arena: A Comparative Analysis of First-Party vs. Third-Party Oracles
In the rapidly evolving world of decentralized finance, a silent but significant battle has been unfolding, reminiscent of the historic cold war but within the digital realm of cryptocurrency. This confrontation pits the innovative First Party Oracle, API3, traded as
API3USD
, against the established Third Party Oracle, Chainlink, known in the markets as $BINANCE:LINKUSD. The dynamics between these two are not just a simple competition; they represent a fundamental ideological divide in how decentralized services should operate, akin to the Bitcoin vs. USD debate that questions the very fabric of financial sovereignty.
Currently, API3 demonstrates a bullish trend that transcends mere market excitement. With its groundbreaking Oracle Extractable Value (OEV) launch, API3 isn't just challenging Chainlink; it's positioning itself as a potential disruptor capable of reshaping the oracle landscape in the cryptoverse. This scenario suggests we are witnessing a pivotal moment in a prolonged cold war of decentralized data oracles, a conflict that has simmered for over two years.
The potential outcomes are stark: either Chainlink adapts by overhauling its service delivery towards a First Party model, or API3 continues to erode its market share, acting as a persistent threat to its business model. My stance remains bullish on API3 for the long term, leveraging strategic trades to secure profits amidst this tumultuous landscape. For instance, a recent sale of API3 at $4.6 yielded a 10% profit, with a targeted re-entry point at $4.15, complemented by a diversified hedge in
ZRXUSD
and
MANAUSD
—a strategy I plan to elaborate on in future discussions.
Trade Strategy Overview
- Current Analysis: The chart for
API3USD
exhibits strong bullish indicators.
- Technical Observation: A bullish divergence has been noted on the 4-hour chart, signaling potential for upward momentum.
- Entry Strategy: Initiating a long position at $4.10.
Short-Term Investment Target (1 Month)
1. Price Target: Aim for a return to $6.17, which would represent a 50% increase, or a $2.07 gain per unit.
2. Investment Volume: With an opening position of $28,700, equivalent to 7,000 units of API3, the strategy is poised for significant returns.
3. Risk-Reward Evaluation: The trade maintains a favorable risk-reward ratio of 3:1, underscoring its potential profitability.
Key Technical Indicators
1. MACD Analysis: The setup anticipates a bullish divergence in the MACD, in tandem with a cross of the 12 and 26 Moving Averages (MAs) indicating a bullish momentum.
2. Market Dynamics: Recent price retractions have diminished selling pressure, establishing a solid support level that suggests a strong floor price.
3. Momentum Indicators: The MACD oscillator's diminishing red bars highlight a reduction in bearish momentum, a critical observation I've detailed on the chart with specific annotations.
In the rapidly evolving world of decentralized finance, a silent but significant battle has been unfolding, reminiscent of the historic cold war but within the digital realm of cryptocurrency. This confrontation pits the innovative First Party Oracle, API3, traded as
API3USD
, against the established Third Party Oracle, Chainlink, known in the markets as $BINANCE:LINKUSD. The dynamics between these two are not just a simple competition; they represent a fundamental ideological divide in how decentralized services should operate, akin to the Bitcoin vs. USD debate that questions the very fabric of financial sovereignty. Currently, API3 demonstrates a bullish trend that transcends mere market excitement. With its groundbreaking Oracle Extractable Value (OEV) launch, API3 isn't just challenging Chainlink; it's positioning itself as a potential disruptor capable of reshaping the oracle landscape in the cryptoverse. This scenario suggests we are witnessing a pivotal moment in a prolonged cold war of decentralized data oracles, a conflict that has simmered for over two years.
The potential outcomes are stark: either Chainlink adapts by overhauling its service delivery towards a First Party model, or API3 continues to erode its market share, acting as a persistent threat to its business model. My stance remains bullish on API3 for the long term, leveraging strategic trades to secure profits amidst this tumultuous landscape. For instance, a recent sale of API3 at $4.6 yielded a 10% profit, with a targeted re-entry point at $4.15, complemented by a diversified hedge in
ZRXUSD
and
MANAUSD
—a strategy I plan to elaborate on in future discussions. Trade Strategy Overview
- Current Analysis: The chart for
API3USD
exhibits strong bullish indicators. - Technical Observation: A bullish divergence has been noted on the 4-hour chart, signaling potential for upward momentum.
- Entry Strategy: Initiating a long position at $4.10.
Short-Term Investment Target (1 Month)
1. Price Target: Aim for a return to $6.17, which would represent a 50% increase, or a $2.07 gain per unit.
2. Investment Volume: With an opening position of $28,700, equivalent to 7,000 units of API3, the strategy is poised for significant returns.
3. Risk-Reward Evaluation: The trade maintains a favorable risk-reward ratio of 3:1, underscoring its potential profitability.
Key Technical Indicators
1. MACD Analysis: The setup anticipates a bullish divergence in the MACD, in tandem with a cross of the 12 and 26 Moving Averages (MAs) indicating a bullish momentum.
2. Market Dynamics: Recent price retractions have diminished selling pressure, establishing a solid support level that suggests a strong floor price.
3. Momentum Indicators: The MACD oscillator's diminishing red bars highlight a reduction in bearish momentum, a critical observation I've detailed on the chart with specific annotations.
Trade active:
Hey guys, as you can see there was clearly some big sells (as shown in the wick down to $3.25) that sent the price down momentarily. I was not stopped out, and I never closed my trade. I still believe in this asset and am a long term holder. I'm merely sharing my trading style with those that are interested. If anyone was wondering my trade in API3 is still active, and I anticipate price increase to target very soon.
Normally, when blockchain apps need to know something from the outside world, like the current price of Ethereum, they ask an oracle. But this process can be wasteful and expensive. OEV is a new approach that updates this info only when absolutely necessary, making it cheaper and more accurate. Plus, it can make these updates smartly by auctioning the right to update the information, putting the money back into the app's ecosystem, instead of it going elsewhere.
So, for traders and investors, OEV means the projects they're putting money into could run more efficiently and potentially become more profitable, thanks to saving on costs and capturing value that used to slip through the cracks.
WorksCited: Burak Benligiray, Litepaper: "Oracle extractable value (OEV)", Nov. 2022.