Truflation x Frax Partnership Proposal
Authors: Stefan Rust CEO at Truflation, David Garfunkel Head of DeFi BD at Truflation
Reviewed by: @samkazemian @amirnader
The Truflation community is proposing a series of actions to further align the Frax ecosystem with the Truflation ecosystem
- Launching Truflation oracle feeds on Fraxtal
- Bridging Nuon, an inflation-protected flatcoin built on top of Truflation, to Fraxtal
- Creating a “Flatcoin Basepool” with Nuon and FPI, pegged to the Truflation CPI Oracle
Introduction to Truflation
Truflation aggregates, calculates, and publishes unbiased, real-time market inflation and economic data. We also make our data available on-chain via the Chainlink infrastructure making them directly compatible with various DeFi products and Web3 applications. Our mission is to offer the most objective, decentralized, and current economic and financial information alternative in the form of on-chain price indexes to enable a new generation of blockchain products.
Truflation is an industry-first Index Oracle
Truflation data is calculated daily and in real-time.The real-time Truflation data employs a meticulous seven-step process to create indexes, ensuring that Truflation products reflect genuine shifts in consumer prices, free from external distortions. You can read the detailed methodology here
Truflation is an accurate reflection of consumer spending
In addition to aggregating consumer pricing data, Truflation decodes household expenditure by truly understanding household spending patterns by distilling expenditures into twelve categories, representing a diverse array of products and services.
Each category has a consistent definition to determine the relative importance of these categories by triangulating data from multiple sources such as Census surveys, Bureau of Labor and Statistics, NielsenIQ, and financial institutions.
The weights assigned to categories reflect evolving consumer behavior and are updated annually, ensuring that Truflation’s index remains a precise and relevant tool for analyzing inflation.
Our Flatcoin peg
In support of growth for flatcoins and addressing the $4.4 trillion opportunity for inflation-linked instruments, Truflation has developed a flatcoin peg using Truflation data as the source of truth. This peg price is updated daily. You can read more about our Peg and the calculation here
Truflation x Frax Partnership Proposal
- Launching Truflation oracles on Fraxtal.
With the launch of Fraxtal underway, Truflation is excited to be an early partner in the next-generation smart contract chain. The Truflation team is in the process of integrating our oracle into Fraxtal which will allow access to our massive library of real-world asset price feeds. Platforms building on top of Fraxtal will be able to build innovative DeFi and real-world products using our real-time immutable price data. We are excited to ideate new products with Fraxtal protocols and look forward to brainstorming with teams. We encourage Frax ecosystem partners to comment on this post to coordinate future development. Integrators and developers can view our Indexes and Data Feeds on the Data Marketplace on the Truflation website.
- Bridging Nuon to Fraxtal
Phase Two of our launch on Fraxtal will involve bridging the flatcoin, Nuon, to Fraxtal.
Nuon is the world’s first true decentralized flatcoin — a stablecoin with a price peg that rises and falls with inflation rates, shielding holders against loss of value from inflation.
Current daily inflation levels are measured by Truflation, an independent inflation index oracle. Truflation calculates the Nuon peg daily and shares it with the Nuon protocol, which uses over-collateralization and arbitrage to maintain the peg while offsetting inflation for Nuon flatcoin holders. Nuon can be minted within the Nuon Protocol by depositing approved cryptocurrency collateral. This guarantees over-collateralization for minted Nuon, maintaining a stable peg.
We see Fraxtal as the perfect place for Nuon considering the DeFi expertise in the Frax ecosystem. Frax’s successful launch and upkeep of Frax Price Index (FPI) showed the long-term focus on building useful products and we hope to work together on the future of inflation-protected and flatcoin products. More information and documentation on Nuon can be found at nuon .fi
- Proposal to create an FPI / Nuon “Flatcoin Basepool”
Given the synergies between Nuon and FPI, we are proposing the creation of the Flatcoin Basepool on Curve. Much like the FRAX / USDC Basepool, the Flatcoin Basepool will pair FPI and Nuon with other flatcoins and can also include yielding stablecoins. The special oracle pegged Curve pool will use the Truflation inflation price as the peg between Nuon and FPI. Beginning with a pool on Fraxtal, then likely moving towards other chains like ETH Mainnet, Arbitrum, Base, and others based on the incentive appetite from the community. We are requesting feedback from the Frax community on phasing this launch and deciding on incentives. We have additional flatcoin pairs planned with partners that would like to pair their stablecoin, yielding stable, or flatcoin with FPI and Nuon.
Further collaboration between Frax and Truflation
As we create and bring liquidity to the flatcoin basepool between FPI and NUON, we will be monitoring the performance of the pool and the peg. In time, if all goes well with the pool, we plan to propose that FPI use the Truflation CPI Oracle as the underlying oracle to track inflation. With the support of the Frax ecosystem, we will return to the forum in the coming months and propose the integration of the oracle into FPI.
Truflation invites FRAX Finance to contribute to the ecosystem
Given Frax Finance’s role in developing flatcoins, Truflation would like to offer 0.1% of the TRUF total token supply to FXS holders.
As per snapshot on 3/12/24 there were 17,685 FXS holders
In addition to rewarding FXS holders, Truflation would also like to allocate an additional token supply to Frax Finance DAO Treasury. Once Truflation is used as the underlying oracle to track CPI, we will airdrop another batch of tokens to the DAO’s treasury. To ensure participation in the Truflation ecosystem and its independence in the future towards governance and methodology, these tokens would be locked in the Truflation governance portal in the form of veTRUF. As this partnership progresses, we hope to have Frax as an aligned partner within our ecosystem. We will return in the coming months with more information on the success of the basepool and eventual airdrop to the DAO.
Requesting feedback from the community
We are requesting feedback from the Frax community on the actions above. With support from the community, we will progress the discussion to a vote.
Vote:
- For: Creating a “Flatcoin Basepool” with Nuon and FPI, pegged to the Truflation CPI Oracle
- Against: Do nothing