About Inflation Adjusted USDS
Spice Trade protocol is introducing a new revolutionary concept: A stable coin that automatically adjusts and protects against inflation.
On a monthly basis, as U.S. Bureau of Labor Statistics releases CPI data, the peg for iUSDS adjusts to account for inflation (or deflation). The goal here is to create a stable coin that maintains the relative purchasing power of USD.
The formula is as follows:
Peg (iUSDS) = $1 / Buying Power Coefficient
where
Buying Power Coefficient (or BPC) = CPI as of January 2022 / Current CPI
For example, as of May 2022, the latest CPl data published by BLS is for March 2022:
March 2022: 287.504
January 2022: 281.148
Source: https://www.bls.gov/cpi/tables/supplemental-files/home.htm
Therefore,
Current BPC = 0.97789
and
Peg (iUSDS) = 1/0.97789 = $1.0226
As BLS data updates over time, BPC gets updated based on a ramp up (or down) function to avoid sudden moves in the peg.
