Published 24 Jan, 2024
Truflation is a Definitive Reference Point protocol (DRPp): a decentralized indexing network and toolbox enabling composability and computational processes associated with verifiable and qualified Real World Assets (RWA) and real-time data.
Truflation provides Definitive Reference Point services and indexes that track financial and economic data, aiming to effectively grow and become a self-sustaining protocol.
The protocol is structured around three core parts:
The community of users that govern the Truflation protocol can participate in a variety of ways: by becoming a data provider, a node operator, a software or financial engineer, or simply voting on future Definitive Reference Point data and index requirements to meet market demand.
The Truflation DataDAO is a community of data builders and consumers who use Truflation’s data to develop tools and services to inform better investment decisions.
Truflation is set up as a decentralized autonomous organization (DAO) to take advantage of five core benefits:
Currently, government-based agencies are the only source of data for the $4.4 trillion inflation-linked bond industry. This government data could be subject to censorship, which can have a significant effect on the inflation-linked bond market.
The government currently has a monopoly on reporting inflation data. However, governments are also in charge of the treasury and often have strong links with Central Banks, creating potential conflicts of interest. Government representatives are also not economists, entrepreneurs, or technology specialists – they are politicians.
As such, it’s critical for the management and development of various data streams to be independent. Data has a strong influence on businesses, economies, and populations across the globe. The Truflation DataDAO allows direct participation in the data collection process to ensure accuracy, efficiency, and transparency.
Writing data onto the blockchain ensures that it cannot be changed – it's logged on the blockchain forever. This is a core ingredient for transparency and accuracy, especially given that nobody would ever revisit an edited version of a document six months later to verify the data.
Subscription models that act as a wrapper on centralized Postgres databases are extremely costly and require heavy resourcing in sales, software development, and hosting.
By leveraging blockchain technology, a decentralized Web3-native, consensus-driven database enables participation across the ecosystem. The core currency of this product can be a token used to reward data providers. As consumers pay for this data with tokens, hosting companies that maintain the data software can, in turn, be rewarded in these tokens for their service. The revenue and profits will be distributed to token holders and ecosystem contributors.
Transparency in the methodology is essential for any index. It strengthens, solidifies, and validates it. Index participants and token holders have a strong vested interest in ensuring a robust methodology. To facilitate this, it is crucial to reward independent entities and institutions who support the methodology with tokens and governance rights.
Allowing token holders to participate in the governance of the protocol via token ownership ensures a robust methodology and avoids sudden changes to appease certain markets, protocols or consumers of the data or the index.
Unlike current models, where a government can change the methodology to suit its needs and reporting requirements, a blockchain-enabled model provides more transparency. It prohibits opaque decision-making. Instead, it allows the community to build out and adjust the methodology in a fully transparent way that serves the interests of users, contributors, builders, and researchers. Each participant has a stake in the protocol via tokens that provide them with voting rights on the outcome, additions, and edits to these methodologies.
Truflation DataDAO’s core utility is its ability to pool and compose fragmented data together to create valuable datasets and indexes within predefined, transparent, mutually agreed, verified, and documented methodologies.
By providing adaptors to data providers, the Truflation Stream Network (TSN) protocol verifies the data and allows any data provider to access computational resources, leveraging the verified data. The raw, verified and computed data gets distributed through the TSN channels in the form of an index. For example, the US CPI would be computed based on verified price data and its sources.
Below are a few examples of the various distributed sources of truth and methodologies used to identify and curate the Truflation Protocol. Here are a few examples of methodologies created by the community at launch, though not an exhaustive list of methodologies users and builders will be able to create in the future:
The Truflation Stream Network is designed to enhance any compatible blockchain use cases with real-world data through functions that are not available natively on these blockchains. TSN is responsible for the following layers of the protocol:
TSN nodes are powered by CometBFT, which is responsible for achieving consensus and data replication between nodes.
Unlike traditional SaaS models, which are centralized wrappers on top of Postgres databases, TSN is a Web3-native permissionless relational database network. It is a stand-alone byzantine fault tolerant (BFT) network designed for a decentralized platform to facilitate the development of innovative data-driven Web3 applications.
This graph is a visualization of TSN and participants’ interactions across the broader ecosystem.
During the early development stage, whitelisted data aggregators compose and index data and ensure composability. Upon verification, this data is then stored in decentralized storage and maintained through the network of TSN node operators.
Qualified data aggregators and Node operators stake the protocol’s native tokens to participate in the Truflation Stream Network.
TSN Node Operators
Node operators ensure the decentralized nature of the DRP protocol and maintain a distributed TSN. The node operator ensures the validity and availability of the data, the computation of indexes and their distribution by maintaining the necessary infrastructure and software updates.
The network of node operators works on a delegated proof-of-stake model. Each node operator is rewarded for their work and their delegated tokens. Node Operators will stake tokens in the governance portal to participate in the Truflation Stream Network.
Node operators risk being slashed should they not meet availability requirements. A portion of this slashed amount goes to the Resolver, while the remaining balance serves as a reward for the governance token holders.
Users: DeFi protocols, DEXs, Synthetic Assets, Applications
Node operators maintain the availability of data streams, including specific indexes. These data streams are available to DeFi protocols across six different blockchains, as well as to individual customers and asset managers through various formats.
A cornerstone product built using the TSN definitive point of reference service is truflation.com – a dashboard that leverages all the available data from TruData.
Truflation.com provides one dashboard and is building out a single interface to interact with a suite of services, including:
In contrast to other Definitive Reference Points, users of data streams from TSN’s DRP protocol can:
The data obtained from Truflation.com, particularly from the calculators and search and discovery features, will be used to provide fresh insights. This data will be beneficial in creating index allocations, determining weightings, and establishing other quantitative metrics.
Qualification and Verification
Stream managers participate in qualification and verification. Elevated validators secure the network through data validation and curation. Validators will stake tokens to validate the data.
The TRUF token is a token compliant with the ERC-677 specification, allowing for immediate integration with third-party exchanges and wallets. It is backward compatible with the ERC-20 token standard and comes with a few additional benefits.
At launch, there will be a limited supply of one billion (1,000,000,000) TRUF with initial allocations outlined below.
Holders of the TRUF token can participate in the governance of the protocol by staking and locking their tokens for designated time periods. The longer tokens are staked, the higher the protocol rewards. As a result of this staking and locking, token holders receive veTRUF tokens.
These ve tokens grant holders voting rights in various protocol activities. This includes decisions about data category selections, market strategies, and much more. Additionally, ve token holders are awarded a portion of the protocol fees for their active participation.
Ve tokens grant holders the following rights:
1: Ability to vote on key changes in the methodology
2: Management of key data aggregators and validating attribution sources
Additionally, the Treasury will be managed and led by the community and governance token holders.
The Treasury’s funds and rewards are then distributed to the data providers and node operators through the ‘Rewards Contract,’ a smart contract on Ethereum.
Governance and veTRUF holders further vote and decide on protocol changes and updates. The primary directions where the community plans to allocate funds are: