Is it require to use DAML drivers API by all parties involved in transaction if one party use DAML? Assume all the parties are on different VM

Is it require to use DAML drivers API by all parties involved in transaction if one party use DAML? Assume all the parties are on different VM

As a first approximation, you can think of a Daml ledger as a (very powerful) database that can be shared between multiple applications run by different parties.

One of these applications could have a UI accessible to other people, so in that sense you could have a system where Daml is just an internal implementation detail of an application exposed to different parties, and then the answer to your question is no: only the party that uses Daml internally would need to know about it and use the Daml APIs.