A censorship-resistant index is getting built on Chainlink and the truflation now measures a 13.3% inflation rate compared to the 7.9% one measured by the Consumer Price Index in March so let’s read more in today’s latest Chainlink news.
The decentralized finance firm Truflation is building a censorship-resistant index to track the inflation independent from governments which is similar to the consumer price index. The founder Stefan Rust said:
“The framework that the government is using is a hundred years old and they have continuously tried to evolve that versus taking a fresh approach in an age where we’ve got everything computerized.”
What we need: a censorship-resistant inflation feed.
The on-chain, crypto oracle version of MIT's Billion Prices Project. No editorialization, just an undeletable history of prices.
Build it pseudonymously. Build it with an eye to a ban. Build it now so it's ready then.
— Balaji Srinivasan (@balajis) May 31, 2021
The team started working on Truflation after the former Coinbase chief Technology Officer Balaji Srinivasan challenged the Web3 developers to build a censorship-resistance inflation feed and claimed that the centralized state is not going to provide reliable inflation states as well as a $100,000 investment. The biggest difference between the CPI and the Truflation index is that while the government uses survey data to measure inflation, Truflation looks at price data only. The CPI is measured in a form of a survey that collects about 94,000 prices per month for the commodities and services as well as 8000 rental housing units for the housing component. Rust said:
“It’s the black box. We don’t know how they made the survey, how they executed it and so on … and the surveys are quite dubious to us as opposed to real price data of the sales point that you can get from real merchants or aggregators.”
While the new index is based on the same calculation model as the CPI, it is different because it measures and reports the inflation changes daily by using current real-market price data from Penn State, Zillow and Nielsen. About 40% of the data which is being looked at is the same goods basked that the bureau of Labor statistics uses while the remaining 60% is being substituted with the data from other sources. Truflation runs on Chainlink and is accessible and visible for everyone which now measures a 13.2% inflation rate, as opposed to the 7.9% measured by the CPI in March.
Caused mainly by the COVID pandemic, the supply-chain difficulties and the government’s response to the issues are making inflation a hot topic again mong the policymakers, the traders, and the everyday people. For decades, the Federal Reserve used the Consumer Price Index and the Personal Consumption Expenditure Price Index to track and compare how the prices are moving but some people still remain skeptical about the reliability of the figures arguing that other important data points are not included and that there’s a variance in the average basket of goods which is not taken into account.
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