In Discord, members of the community created an initial policy framework for how the current Guardian should manage Borrowing Caps:
- The Guardian will increase the Borrowing Cap of a market, when the Cap has been reached, by: (a) up to 50% for newly created markets (b) up to 10% for large/existing markets.
- The Governance process can lower, or fix, the Borrowing Cap of any market through a proposal.
- The Borrowing Cap Guardian will take actions necessary to raise or lower a Borrowing Cap to ensure the safety of the protocol, if the situation warrants it; those situations may include; raising a Borrowing Cap to ensure borrowing liquidity is available during stressed liquidations; lowering a Borrowing Cap to prevent malicious activity
All feedback is welcome & encouraged–and this policy can be refined over time. The Governance process can change the Guardian address as well, if needed.