# Gauntlet Guardian - Cap Recommendations for DAI

**URL:** <https://forum.moonwell.fi/t/gauntlet-guardian-cap-recommendations-for-dai/774>\
**Category:** Proposals\
**Created:** [January 31, 2024, 6:49pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-cap-recommendations-for-dai/774 "2024-01-31T18:49:30Z")\
**Posts on this page:** 2\
**Page:** 1

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**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 31, 2024, 6:49pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-cap-recommendations-for-dai/774/1 "2024-01-31T18:49:31Z")

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## Simple Summary

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

| | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
| --- | --- | --- | --- | --- |
| DAI | 5,000,000 | 4,500,000 | 4,500,000 | 3,900,000 |

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

#### Cap Usage

The sustained high utilization of the DAI cap, coupled with diminishing on-chain liquidity, necessitates a reduction in both the supply and borrow caps.

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/b/ba136bd652eb705430bc0a797fd4f76d59d80d30.png)

### DAI Circulating Supply

The circulating supply of DAI has continued to drop since the last cap recommendation, now sitting at 5.3 million compared to 6.1 million. The recommendations above are made as a preventive measure to avoid accumulating bad debt for the protocol.

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/9/9db1964a5980e245987b71fdf3806b1cf61c7f36.png)

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

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/4/47e215f440fa8eaf89e0c0e3d6f2f7980b44f488.png)

#### DEX Liquidity and Cap Usage

| Asset | Borrow Cap | Supply Cap | Borrow Cap Usage | Supply Cap Usage | DEX 25pct Slippage Token |
| --- | --- | --- | --- | --- | --- |
| DAI | 4,500,000 | 5,000,000 | 83.44% | 97.34% | 417164.52 |

## Quick Links

_Please click below to learn about our methodologies:_

[Gauntlet Parameter Recommendation Methodology](https://medium.com/gauntlet-networks/gauntlets-parameter-recommendation-methodology-8591478a0c1c)  
[Gauntlet Model Methodology](https://medium.com/gauntlet-networks/gauntlets-model-methodology-ea150ff0bafd)

_By approving this proposal, you agree that any services provided by Gauntlet shall be governed by the terms of service available at gauntlet.network/tos._

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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 31, 2024, 9:00pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-cap-recommendations-for-dai/774/2 "2024-01-31T21:00:44Z")

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Guardian [transaction 1](https://basescan.org/tx/0x0204c83455eedaf8e5e07da8c308700946561aeec2ad00d98883dc6ba4f75d58#eventlog) and [transaction 2](https://basescan.org/tx/0xed52b46b43de7e65c0a77b2c4a5457178a07064398f49dcd38b6e328c3b04955#eventlog) have been implemented.