Why is API rate limiting important and how does it work?

Rate limiting controls request frequency to protect resources and ensure fair usage. Purpose: prevent abuse/DDoS, protect backend services, ensure availability for all users, manage costs. Implementation: track requests per API key/IP, return 429 Too Many Requests when exceeded. Algorithms: token bucket, leaky bucket, fixed/sliding window. Tools: API gateways, Nginx, Redis counters. Provide: clear limits in documentation, rate limit headers (X-RateLimit-Remaining), exponential backoff guidance.