Gauntlet Guardian - Base DAI Cap Recommendations

Gauntlet’s Base Recommendations

Simple Summary

Gauntlet will use Cap Guardian to decrease Borrow and Supply Caps for DAI.

Current Supply Cap Recommended Supply Cap Current Borrow Cap Recommended Borrow Cap
DAI 6,500,000 5,000,000 6,000,000 4,500,000

Gauntlet will be utilizing the Cap Guardians to enact this change as voted by the community within this forum post and proposal.

Supporting Data

DAI Cap Recommendations

Borrow Cap Usage

The DAI Borrow Cap has increased over the 75% threshold.

DAI Circulating Supply and Holders

Gauntlet doesn’t recommend an increase in Supply Cap and instead suggests a decrease in both the Supply cap and Borrow cap to 5,000,000 and 4,500,000 respectively.

DAI’s circulating supply has been dropping at an average rate of 172k DAI/day in the past 3 months reaching a point where the current supply cap on Moonwell is greater than the circulating supply. The above recommendations are made as preventive measure to not accumulate bad-debt to the protocol.

The largest positions supplying DAI are borrowing correlated assets or borrrowing recursively. Gauntlet will continue to monitor these positions closely.

DEX Liquidity and Cap Usage

Asset Current Borrow Cap Current Supply Cap Borrow Cap Usage Supply Cap Usage DEX 25pct Slippage Token
DAI 6,000,000 6,500,000 66.6% 84.3% 456694.37

Guardian transaction 1 and transaction 2 have been implemented.