# Gauntlet Guardian - USDC and DAI Cap recommendations on Base

**URL:** <https://forum.moonwell.fi/t/gauntlet-guardian-usdc-and-dai-cap-recommendations-on-base/811>\
**Category:** Proposals\
**Tags:** base\
**Created:** [March 14, 2024, 5:54pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-usdc-and-dai-cap-recommendations-on-base/811 "2024-03-14T17:54:39Z")\
**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:** [March 14, 2024, 5:54pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-usdc-and-dai-cap-recommendations-on-base/811/1 "2024-03-14T17:54:39Z")

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## Simple Summary

Gauntlet will use Cap Guardian to Change Borrow Caps and Supply caps for USDC and DAI.

| | Current Supply Cap | Recommended Supply Cap | Current Borrow Cap | Recommended Borrow Cap |
| --- | --- | --- | --- | --- |
| USDC | 15,000,000 | 20,000,000 | 12,000,000 | 18,200,000 |
| DAI | 2,500,000 | 2,000,000 | 2,000,000 | 1,500,000 |

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

### USDC Cap Recommendations

#### Supply Cap and Borrow Cap Usage

The USDC Supply cap and Borrow cap usage has increased over the 75% threshold.

#### USDC Circulating Supply and Holders

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/9/909063774d6aa4e2513822d1162d89c2f125af62.png)

Gauntlet recommends an increase in both the Supply cap to 20,000,000 and Borrow cap to 18,200,000.

The top 10 largest positions supplying USDC 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/c/c3a6c4ce11322b21d4ed4191347c763f11167503.png)

#### DEX Liquidity and Cap Usage

| Asset | Borrow Cap | Supply Cap | Borrow Cap Usage | Supply Cap Usage | DEX 25pct Slippage Token |
| --- | --- | --- | --- | --- | --- |
| USDC | 12,000,000 | 15,000,000 | 84.33% | 84.6% | 6,688,275 |

### DAI Cap Recommendations

#### DAI Circulating Supply and Holders

Gauntlet recommends a decrease in both the Supply cap to 2,000,000 and Borrow cap to 1,500,000 to prevent concentration risk caused by declining circulating supply on Base.

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/2/277e16990e1ee060efa99e1fea141414ce07f1de.png)

The largest positions supplying DAI are borrowing correlated assets or borrrowing recursively. There is about 30k DAI that is supplied in non-recursive/non-correlated borrows. Gauntlet will continue to monitor these positions closely.

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/f/f520fc53207512b6801f6891f9e10bce9ad7a87f.png)

**25% Depth**

 ![image](https://europe1.discourse-cdn.com/flex017/uploads/moonwell/original/2X/b/b911c52857fc9fae2a353951615036a0240cd8f0.png)

There is ample liquidity to absorb liquidations with 600k DAI causing 25% slippage.

#### DEX Liquidity and Cap Usage

| Asset | Borrow Cap | Supply Cap | Borrow Cap Usage | Supply Cap Usage | DEX 25pct Slippage Token |
| --- | --- | --- | --- | --- | --- |
| DAI | 2,500,000 | 2,000,000 | 50% | 55.6 % | 600,000 |

## 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:** [March 14, 2024, 6:02pm UTC](https://forum.moonwell.fi/t/gauntlet-guardian-usdc-and-dai-cap-recommendations-on-base/811/2 "2024-03-14T18:02:21Z")

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Guardian [transaction 1](https://basescan.org/tx/0x6dd9694f1b90da3959a092c2e22adca4acba6ed782888ad771cabd55842c1331) and [transaction 2](https://basescan.org/tx/0x1c5b10d920621922cfa18e10ca6c33e9a1fba9e7b8cd2249efa213667f9a87b3) for USDC, and [transaction 3](https://basescan.org/tx/0x1583c016dd5f41e2796a6b3d23596e721c3d468c2bea0fa4789dbec62476568b) and [transaction 4](https://basescan.org/tx/0xcff75490c085a6c8d17ce721eb013bb1bb7834d9399776fa4a9b3c1638d756f8) for DAI have been implemented.