# Gauntlet Guardian - Base DAI Cap Recommendations

**URL:** https://forum.moonwell.fi/t/gauntlet-guardian-base-dai-cap-recommendations/763
**Category:** Proposals
**Tags:** base
**Created:** [January 22, 2024, 11:29pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-base-dai-cap-recommendations/763 "2024-01-22T23:29:26Z")
**Posts on this page:** 2
**Page:** 1

<div class="post-metadata">

### Author: ![Gauntlet](https://dub1.discourse-cdn.com/flex017/user_avatar/forum.moonwell.fi/gauntlet/32/780_2.png) [@Gauntlet](https://forum.moonwell.fi/u/Gauntlet)
#### Post date: [January 22, 2024, 11:29pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-base-dai-cap-recommendations/763/1 "2024-01-22T23:29:26Z")

</div>

## 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](https://forum.moonwell.fi/t/gauntlets-initial-recommendations-for-moonwell-on-base/536) and [proposal](https://gov.moonwell.fi/artemis/proposal/39).

## 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.

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/7/7bed3dad775b56588d239802fb75101d36d45f1c.png)

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.

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/c/cb805bd5e754e5389416e26ca80692826986a0ed.png)

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

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/6/6f957c542e2c824c76a7dd79e0639c8abf876205.png)

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/6/64dcd8b69df6bc87c5d2f088cfe21fdcd9dbf4ee.png)

#### 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 |

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<div class="post-metadata">

### Author: ![Gauntlet](https://dub1.discourse-cdn.com/flex017/user_avatar/forum.moonwell.fi/gauntlet/32/780_2.png) [@Gauntlet](https://forum.moonwell.fi/u/Gauntlet)
#### Post date: [January 23, 2024, 3:50am UTC](https://forum.moonwell.fi/t/gauntlet-guardian-base-dai-cap-recommendations/763/2 "2024-01-23T03:50:17Z")

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Guardian [transaction 1](https://basescan.org/tx/0xbecaa100bcc13d6d1935fc9d59cab32782303a3c05e9fb83cf72dfe81b2dc606#eventlog) and [transaction 2](https://basescan.org/tx/0xef062a6c3f7fd9d43545fd82a7077024cfac88487bc56de1ef8ad9b870920cc7#eventlog) have been implemented.