API Gateways for Blockchain Smart Contracts: Use Cases and Implementation Challenges

| Updated on February 14, 2024

According to Gartner, organizations that implement blockchain computation and smart contracts by the end of 2023 stand a better chance of improving overall data quality by nearly 50% and visibility by 30%. However, the associated improvement in data quality doesn’t come automatically — you’ll need API gateway tools to facilitate seamless payload delivery between the blockchain smart contract and other connected applications.

While the core functionalities of an archetypal application programming interface are to enable easy and safe retrieval of blockchain data for smart contract actions, an API gateway checks whether the data from external sources is correctly formatted. Technically, API gateway services examine the payload’s Merkle Tree proof, signature, and metadata. Moreover, edge microservices can also enable data transformation between prevalent formats, such as XML and JSON. 

But there are numerous use cases for edge microservices as a gateway to blockchain smart contracts. Keep reading to learn more, including the challenges of implementation. 

API Gateway Use Cases for Blockchain Smart Contracts 

API software integration offers a secure, centralized, and user-friendly way of interacting with blockchain smart contracts. It can help execute complex on-chain processes and transactions more efficiently in a myriad of use cases, including: 

Decentralized Applications (dApps)

Decentralized applications leverage self-executing agreements to run autonomously on blockchain networks. In other words, the application runs on a peer-to-peer network of nodes instead of a single computer. To access utilities offered by dApps, users send transactions to smart contracts to invoke their executions without the involvement of an intermediary, saving time and money.

Here, an API integrator can serve as a link between the dApp smart contracts and external services. This approach ensures that the smart contracts follow predefined protocols or endpoints when involving external applications to execute their terms and conditions. 

Supply Chain Management 

Supply chain management got easier once the industry started using blockchain smart contracts that allow everyone on the network to monitor the movement of their products. Moreover, recording all transactions on a shared ledger enhances supply chain visibility for all parties. This translates to a business ambiance of trust, traceability, and accountability across the chain. 

Even so, managing the supply chain would be more seamless if the input data is consistent. A microservice API gateway allows supply chain managers to implement data validation rules and input parameters in smart contracts. This ensures that all input data is consistently verified and formatted for greater accuracy.  

Digital Identity Verification 

Self-executing agreements on a blockchain can be applied to digital identity management to streamline verification. For instance, businesses can use this approach to optimize KYC processes through automation, where the user data is stored on-chain instead of in a centralized repository. This solves various challenges, including identity theft and transparency concerns. 

But how can this process be enhanced? A website API integration for digital identity verification can provide a secure authentication protocol to ensure that only legitimate users can access the KYC smart contract. It can be through OAuth or any other security authentication protocol that works for a particular business. 

Financial Services 

Blockchain smart contracts are inherently built to automate transaction executions after fulfilling the set terms & conditions of an on-chain agreement. To ensure a conflict-free process, the software program requires users to input immutable data before adding the contract on-chain, where it verifies that the conditions have been fulfilled before initiating the transaction. 

Here FinTech companies can use an internal API gateway as a transaction management tool. The API ensures that all transactions are meticulously recorded on the distributed ledger and executed within the set parameters. For instance, it offers an interface for all parties to sign off and verify transactions. It also facilitates seamless transaction fee management on the service provider’s end. 


Blockchain solutions help the healthcare industry store and share patient information across hospitals, pharmaceuticals, laboratories, and local service providers, such as emergency response teams. Besides fostering greater data security, medical applications running on the blockchain can help doctors track patient information to identify critical conditions and respond immediately.

However, this can be implemented more efficiently with an API open-source tool that has an analytics and reporting dashboard. This would allow medical teams to monitor patient activities recorded on smart contracts and generate insightful reports to track progress. 

Implementing an API Gateway for Smart Contracts 

Generally, implementing innovative API gateway services like Tyk Technologies gives you a standardized interface for interacting with blockchain smart contracts. Here is how you can implement API data integration in six steps: 

  • Determine the endpoints of your application or website API integration for your smart contracts to interact with third-party resources. 
  • Leverage a framework and programming language of choice to set up the edge microservice as a middleware layer of integration with existing applications. 
  • Use a blockchain client library like Web3.js to connect the API gateway to the distributed ledger system. 
  • Define the parameters and protocols for integration response API gateway to trigger smart contract executions. 
  • Set up security and access control to the interface using authentication and encryption techniques. 
  • Test and deploy your API integrations to ensure they operate as intended. 

Overall, edge microservices play a crucial role in integrating blockchain smart contracts with peer-to-peer networks. Besides providing a critical standardized interface, API gateway tools boost the security posture of the integration through authentication, encryption, and user access control. Furthermore, these tools also come with scalability functions, such as caching and load balancing, to enhance the efficiency of smart contracts when handling voluminous requests. 

The Challenges of Implementing an API Gateway for Blockchain Smart Contracts 

Implementing data integration APIs as a gateway to blockchain smart contracts can be an uphill task for the uninitiated. The challenges that you’re likely to face include the following: 

  • Complexity: blockchain self-executing agreements are generally complex to code, let alone understand. This can make it difficult to interact with them for the first time. 
  • Interoperability: different blockchain networks run on various protocols and consensus mechanisms. This means you may need to standardize your API gateway for multi-chain functionality. 
  • Performance: poor integration or incompatibility can result in slowed-down performance, which can cause delays or a bad user experience. 
  • Legacy systems: some businesses are still running on legacy systems, an approach that may require a complete haul of specific systems or IT infrastructure before implementing API gateway integrations. 

Case Studies 

Examples of API edge microservices that offer utility gateways to blockchain smart contracts include: 

  • Chainlink: an Oracle-based network that uses API gateways to link smart contracts with off-chain data from third-party sources. This allows developers within the network to build data-driven dApps with real-time data insights. 
  • Infura: a prevalent API gateway allowing users to effortlessly and securely interact with smart contracts running on Ethereum or IPFS nodes. This solution is mainly used for the deployment of decentralized applications. 
  • Coinbase: the platform offers an API gateway that allows applications to connect with its decentralized finance features, such as trading, buying, selling, and Web3 wallet management. 

Wrapping It Up

From a neutral standpoint, an API gateway can become an effective gateway for blockchain-centric smart contracts by offering a secure and standardized interface for on-chain interactions with external services. However, the efficiency and user experience ultimately depends on various API features, such as integration functions, performance, security, interoperability, or even the API gateway price. 

Janvi Panthri

Senior Writer, Editor

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