Daily Caps
Last updated
Last updated
Daily caps are the amount of an asset that can leave the system over a 24-hour period. There are two caps for each asset reserve:
New Debt Cap: Net amount of an asset that can be borrowed
Collateral Withdrawal Cap: Net amount of a collateral that can leave the system
Both of these values can be seen in the Info & Risk section of each asset reserve page:
The system uses net in/outflows. So, if 10,000 USDC is borrowed, and 10,000 USDC is repaid in the same epoch, the net debt taken in that epoch is 0. The same goes for collateral ouflows.
Daily Caps protect the protocol and users in two ways:
It prevents an attacker from draining any asset from the system, thus limiting the damage should an oracle exploit occur
It means that outsized debt positions can only be built up over time, allowing the protocol to track its impact on system health
Daily caps for each asset are determined by the risk framework outlined throughout this document, and are indicated in the UI on each asset reserve page.
