On the opening day of last summer’s SmartCon #1, angel investor and former Coinbase CTO Balaji Srinivasan gave a keynote speech detailing how blockchains connected to real-world data through Chainlink’s decentralized oracle network facilitate a paradigmatic shift from the world’s flawed “fiat information” model to a “cryptoinformation” model that’s highly resistant to censorship and manipulation.
“If we can solve the oracle problem for price, we can probably solve it for a lot of other things,” he said, imagining a global information ecosystem where “anything that you’re asserting for the record” is posted on-chain via a decentralized oracle. Capping off his keynote, he announced a competition to create the best decentralized inflation index, with a grand prize of a $100,000 investment from Srinivasan and a $100,000 grant from Chainlink.
Today, crypto-native index Truflation, which integrated Chainlink in January to bring its custom U.S. inflation data on-chain, announced it won the competition to create a more accurate and transparent data source for today’s highly inflationary environment.
In 2021, inflation hit a 40-year high in the U.S. Ongoing supply chain issues and a stream of new Covid variants make it difficult for businesses to shift spending and mitigate inefficiencies. In a recent Based Space AMA, Truflation CEO Stefan Rust emphasized the importance of revamping century-old infrastructure like the government’s Consumer Price Index (CPI) to build an open-source inflation index for the future.
Truflation’s index is engineered to provide a more accurate daily representation of U.S. inflation by using a remastered version of the CPI that substitutes 55.5% of the current CPI datasets with recent market prices for rent, utilities, food, and transport. Truflation also repositions certain data subcategories and uses chained-CPI basket weights to better reflect consumer budgets and spending habits.
Truflation’s team told Chainlink Today that by using Chainlink’s industry-leading oracle network to deliver its data on-chain, Truflation can become the price data provider for various inflation-fighting smart contract applications, such as inflation-tracking algorithmic stablecoins, that would make markets more efficient and help users hedge against inflation risk.
In an official announcement, Truflation highlighted its “transparent, open-source data collection and permissionless access to its inflation metric calculations” as “an important paradigm shift to decentralized inflation data.”
Earlier this year, Truflation’s team told Chainlink Today that their mission to provide the most objective, decentralized, current inflation data is inspired by Chainlink co-founder Sergey Nazarov’s vision of a world powered by a cryptographic truth machine, saying, “We are thrilled to be a part of the Chainlink ecosystem; they are a leader in the oracle market but also have an incredible vision and mission to support that.”