EURI is a currency indexed to the inflation in the Eurozone. For the value of inflation, the harmonized index of consumer prices for all products (HICP) is taken as a reference, which can be consulted at the following link:

The index with base 100 in the year 1996 is used. The percentage changes in the index measure the rate of variation of inflation between any two periods. For example, in January 2010 the index had a value of 127.6, and in November 2022 it was 168.6, which means that accumulated inflation in that period was 32.13%.

EURI does not take its value directly from the HICP, since the data is published one month late. Instead, the prediction of the index that will be published in the following month is calculated, whose value corresponds to the current month, and the value of said prediction is used as the reference target value of the token. As can be seen in the figure, the predictions of the Holt-Winters model are quite accurate and replicate the data series with great fidelity.

In cases where the new target value is below the current value (deflation), the reference value of the EURI remains constant, so that in no case does its value fall against the euro.

Target value update

Although it uses the same PredictIndex contract as the USDI token, the EURI token does not currently have the option to update values via direct API calls through the Chainlink network. The only mechanism for updating the HICP values is manual, which requires two transactions:

  • A transaction using the provideData() function of the PredictIndex contract associated with the EURI token, providing the values of the date of the next publication of the inflation data and that of the last published data. Only an address authorized by the contract owner can execute this action.

  • A transaction using the token's updateTarget() function to update the target value. Anyone can call this function, as the contract automatically checks if it should be updated and reverts the transaction if not. This function is also called automatically from the SCMinter contract every time a transaction involving the EURI is carried out, which guarantees that an updated reference value is always operated.

Backup value

The EURI token contract is prepared to work completely autonomously. Even if no one ever updates the target value of the PredictIndex contract, the updateTarget() function can perform a fallback update using a default value. This value is 0.2% per month, which is equivalent to 2.68% annualized. The monthly rate of change slowly converges towards that value if the reference index values stop updating. See the page on inflation-indexed currencies for more information on how this support value is calculated.

pageDeflationary currencies

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