Truflation measures an inflation rate of 13.3%, as opposed to 7.9% in March’s Consumer Price Index.Truflation, a decentralized finance (DeFi), firm, is creating a new gauge that tracks inflation in real-time and independent of the government.
It is a competitor to CPI (Consumer Price Index) and one in which officials cannot move the goalposts.
“The framework [the government] uses is a hundred year old… and they’ve continuously tried to evolve it versus taking an innovative approach in an age when everything is computerized,” Stefan Rust, founder of Truflation, told CoinDesk.
After Balaji Srinivasan , former Coinbase Chief Technology Officer (COIN), challenged Web 3 developers to create a censorship resistant inflation feed. He claimed that the “central state” isn’t going be able to provide reliable inflation stats and promised a $100,000 investment.
The main difference between the CPI index and Truflation is that the government uses price data to measure inflation. Truflation, however, looks at price data. The CPI is calculated using a survey that collects approximately 94,000 prices per months for commodities and services, and 8,000 rental housing units to measure the housing component.
It’s the black box. Rust stated that we don’t know the details of how they created the survey or how they did it.
The Truflation index uses the same calculation method as the CPI but is unique in that it reports daily inflation changes using real-market price data such as Zillow, Penn State, and Nielsen.
The Bureau of Labor Statistics uses approximately 40% of the data being examined. The rest of the data is being replaced with data from other sources.
Truflation is a system that runs on Chainlink. It measures an inflation rate of 13.2%, which is lower than the 7.9% measured using the CPI in March.
Inflation is back in the news, partly due to supply-chain problems and government response to them.
The Federal Reserve uses the Consumer Price Index and the Personal Consumption Expenditures Price Index (PCE), to compare and track how much prices have risen over the years. However, some are skeptical about their reliability, arguing that certain data points are not included and that there are variations within the average basket.