Truflation US CPI Data to Power Frax Price Index

Decentralized stablecoin project Frax Finance selected the Truflation CPI index as the oracle to provide inflation data to its inflation-linked stablecoin. 

Key takeaways:

• Truflation oracles launching on Fraxtal: Truflation's real-time inflation and economic data will be available on Fraxtal, enabling builders to leverage it for innovative DeFi and real-world applications.
• Nuon bridging to Fraxtal: Nuon, the world's first decentralized flatcoin pegged to inflation, will be bridged to Fraxtal, bringing DeFi expertise to Nuon's development.
• Creation of a Flatcoin Basepool on Curve: A Curve pool pairing FPI (Frax Price Index) and Nuon, potentially including other flatcoins and yielding stablecoins, will be established. The Truflation inflation price will serve as the peg between Nuon and FPI within this pool. The initial launch will be on Fraxtal, with expansion to other chains based on community demand.
• Long-term collaboration: Truflation aims to make the Truflation CPI Oracle the underlying oracle for FPI in the future, subject to successful pool performance.
• Truflation token allocation to Frax Finance: To recognize Frax's contributions to flatcoin development, 0.1% of the total TRUF token supply will be distributed to FXS holders (based on a March 12, 2024 snapshot) and an additional allocation will be made to the Frax Finance DAO Treasury in veTRUF form.

Frax is the first fractional-algorithmic stablecoin protocol, being partially backed by collateral and partially stabilized algorithmically. Frax is also open-source, permissionless, and entirely on-chain – currently implemented on Ethereum and other chains. The end goal of the Frax protocol is to provide a highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like BTC.

Frax Finance will use Truflation’s real-time US price data to peg the value of its Frax Price Index ($FPI) stablecoin to the real value of US inflation. As Frax is a decentralized ecosystem that uses stablecoins as currency, its $FPI is pegged to a basket of US consumer goods. 

$FPI joins Nuon, an inflation-linked flatcoin developed by Truflation, in using the Truflation US CPI index as the underlying source of truth. The proposal will include the following launching Truflation oracle feeds on Fraxtal, bridging Nuon to Fraxtal, creating a “Flatcoin Basepool” with Nuon and FPI, pegged to the Truflation CPI Oracle, and airdropping TRUF to veFXS holders.

With the average US consumer losing 24% of their purchasing power in the past three years, according to Truflation’s Aggregated US Inflation Index, there has never been a greater need for inflation-protected assets like flatcoins.

Commenting on the partnership, Stefan Rust, CEO of Truflation, says: “We’re thrilled that Frax has decided to use Truflation’s US CPI index as the underlying source of truth for its inflation-proof $FPI stablecoin. There is a $4.4 billion untapped opportunity in inflation-linked investment instruments and Truflation is perfectly positioned to support this growth.

“As recently recognized by Coinbase CEO Brian Armstrong, flatcoins are one of the most exciting innovations coming out of the decentralized finance market today. Linked to the value of inflation, they provide a way for investors to protect their purchasing power in a fully decentralized and transparent way.”

Truflation is a leading real-world asset (RWA) oracle service that provides independent, transparent and real-time financial and economic data on-chain. Tracking over 18 million items with three price feeds per item, Truflation’s censorship-resistant and accessible data indices provide the necessary data infrastructure to bring about systemic advancements in the DeFi economy, empowering dApps like DEXs to open limitless markets. From speculating on prices of orange juice and uranium, to enabling BTC-denominated oil, gas, and corn prices, Truflation provides the key to unlocking a diverse array of financial markets and instruments in the Web3 world.

About Frax Finance

Frax is the first fractional-algorithmic stablecoin protocol, being partially backed by collateral and partially stabilized algorithmically. Frax is open-source, permissionless, and entirely on-chain - currently implemented on Ethereum and other chains. The end goal of the Frax protocol is to provide a highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like BTC.

Want to join the data revolution? Explore Truflation’s indexes and data feeds!