// GLOSSARY -- AGENTIC FINANCE
What is a Spending Cap?
A hard upper limit on total agent spending within a scope — per transaction, hour, day, contract, or session. Once reached, all transactions blocked until reset.
WHY IT MATTERS
Caps provide guaranteed upper bounds — essential for budgeting, risk management, and preventing catastrophic loss.
Different granularities: per-tx ($1K prevents single mistakes), daily ($10K prevents drains), per-contract (limits protocol exposure). Layering provides comprehensive protection.
Setting levels: observe normal patterns, set at 2-3x expected maximum.
HOW POLICYLAYER USES THIS
PolicyLayer enforces caps per agent, period, contract — in tokens or USD, adjustable in real-time.
FREQUENTLY ASKED QUESTIONS
Cap vs. limit vs. budget?
Caps are hard maximums that can't be exceeded. Limits are similar but may have override mechanisms (HITL). Budgets are the total allocation that may be spent down gradually.
What about gas within caps?
PolicyLayer can include or exclude gas fees from spending cap calculations. Most operators include gas for total cost visibility.
Can caps be temporarily raised?
Yes — through PolicyLayer's API with appropriate authorization. Temporary raises are logged and can have their own expiry.