Stablecoins holders are concerned about not just inflation, but the decline in real purchasing power. Nuon addresses this by integrating Truflation’s truCPI, which tracks the increase in cost-of-living with a public methodology, separate from the Treasury’s own.

'Beyond the problem of falsified official numbers - solved by Truflation - flatcoins must resolve the issue of how to source yields. The strategy of the U.S. Treasury is simple - print. This strategy has been tried in DeFi, with little success (see Terra LUNA, Iron Finance, and USDM).

To provide consistent yields, flatcoins must draw on exogenous sources. Nuon pulls from the lowest-risk, highest yield sources available. These sources are approved by a veto-based, ve-weighted governance module, described in section 4, Governance.

Governance token holders are rewarded for approving yield sources and properly directing USDC from the treasury toward the high-yield, low-risk assets (see Section 6, nuMint).

From these yield sources NUON holders receive a yield at the rate of Truflation in the form of additional NUON tokens, in a manner similar to Lido’s stETH. nuMint holders vote on what yield generating strategies to fund, receiving the excess yield generated by these vaults, while the protocol ensures Truflation APY is always paid to NUON holders through a number of backstops (see Section 8, Backstops).

In this way, Nuon synergizes the coincidence of wants between two user groups: risk-seeking crypto-natives, and risk-averse stablecoin holders, providing inflation for the latter, and high yields for the former.

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