diff --git a/cadence/contracts/FlowALPModels.cdc b/cadence/contracts/FlowALPModels.cdc
index f6bd5389..25fe2f5f 100644
--- a/cadence/contracts/FlowALPModels.cdc
+++ b/cadence/contracts/FlowALPModels.cdc
@@ -1176,6 +1176,10 @@ access(all) contract FlowALPModels {
         /// (used when deposits are made)
         access(EImplementation) fun consumeDepositCapacity(_ amount: UFix64, pid: UInt64)
 
+        /// Increases deposit capacity by the specified amount and tracks per-user deposit usage
+        /// (used when withdrawals are made)
+        access(EImplementation) fun refillDepositCapacity(_ amount: UFix64, pid: UInt64)
+
         /// Returns the per-deposit limit based on user deposit limit and available deposit capacity.
         /// Rationale: cap per-deposit size to a fraction of the total depositCapacityCap
         /// so a single large deposit cannot monopolize capacity.
@@ -1515,6 +1519,23 @@ access(all) contract FlowALPModels {
             )
         }
 
+        /// Increases deposit capacity by the specified amount when a withdrawal is made.
+        /// This is because we want to limit net deposits within a certain time period rather than gross deposits.
+        access(EImplementation) fun refillDepositCapacity(_ amount: UFix64, pid: UInt64) {
+            self.depositCapacity = self.depositCapacity + amount
+            // Track per-user deposit usage
+            let currentUserUsage = self.depositUsage[pid] ?? 0.0
+            self.depositUsage[pid] = currentUserUsage.saturatingSubtract(amount)
+
+            FlowALPEvents.emitDepositCapacityConsumed(
+                tokenType: self.tokenType,
+                pid: pid,
+                amount: 0.0,
+                remainingCapacity: self.depositCapacity
+            )
+        }
+
+
         /// Returns the maximum amount that can be deposited to the given position without being queued.
         access(EImplementation) view fun depositLimit(pid: UInt64): UFix64 {
             let userCap = self.getUserDepositLimitCap()
diff --git a/cadence/contracts/FlowALPv0.cdc b/cadence/contracts/FlowALPv0.cdc
index 66cf3129..ed21dbb7 100644
--- a/cadence/contracts/FlowALPv0.cdc
+++ b/cadence/contracts/FlowALPv0.cdc
@@ -1346,6 +1346,7 @@ access(all) contract FlowALPv0 {
                 )
 
                 let fromReserve <- reserveVault.withdraw(amount: reserveWithdrawAmount)
+                tokenState.refillDepositCapacity(reserveWithdrawAmount, pid: pid)
                 withdrawn.deposit(from: <-fromReserve)
             }
 
@@ -1823,6 +1824,8 @@ access(all) contract FlowALPv0 {
                             amount: uintSinkAmount,
                             tokenState: tokenState
                         )
+                        tokenState.refillDepositCapacity(UFix64(uintSinkAmount), pid: pid)
+
                         let sinkVault <- FlowALPv0._borrowMOETMinter().mintTokens(amount: sinkAmount)
 
                         FlowALPEvents.emitRebalanced(