CPI Limitations and Solutions
This guide talks about issues with CPI and why ARTH has its own decentralized price peg.
The Consumer Price Index (CPI) is a widely used measure of inflation, but it has several issues that can make it less accurate and reliable.
The calculation of CPI involves collecting data on the prices of various goods and services. This process is subject to human error, which can lead to inaccuracies in the index. To address this issue, ARTH uses a unique algorithmic price feed that automates the process, reducing the potential for errors and providing a more accurate measure of value.
CPI often fails to account for all aspects of an economy, as it focuses primarily on a limited basket of goods and services. This can result in a distorted representation of the overall economic situation. By using an algorithmic price feed that takes into account a broader range of factors, ARTH can offer a more comprehensive view of the market and its dynamics.
Since CPI relies on data from various sources, it can be susceptible to manipulation by governments or other entities. To combat this, ARTH's decentralized nature ensures that its algorithmic price feed remains transparent and resistant to external influence.
By addressing the limitations of CPI, ARTH aims to provide a more reliable, accurate, and transparent stablecoin that appreciates against the US dollar, offering users increased purchasing power over time.