In order to update interest rates to maintain the peg, TCP needs to know the price of Hue relative to the target value. In TCP, the target value is the median value of a basket of assets chosen by the community. The community can add or remove assets to this basket, and can also forgo the ability to add or remove assets to further decentralize the protocol.
Given a set of assets, the protocol compares each asset in the reference asset to the value of Eth, takes a median of those prices, compares Hue to Eth, and then compares the price of Hue:Eth to the basket:Eth. These price are TWAPed over many hours in order to ensure that they are accurate.
Peg Price (this page)