diff --git a/contracts/DAIInterestRateModel.sol b/contracts/DAIInterestRateModelV2.sol
similarity index 82%
rename from contracts/DAIInterestRateModel.sol
rename to contracts/DAIInterestRateModelV2.sol
index 3efb79a55..d716b543e 100644
--- a/contracts/DAIInterestRateModel.sol
+++ b/contracts/DAIInterestRateModelV2.sol
@@ -4,17 +4,21 @@ import "./JumpRateModel.sol";
 import "./SafeMath.sol";
 
 /**
-  * @title Compound's DAIInterestRateModel Contract
-  * @author Compound
-  * @notice The parameterized model described in section 2.4 of the original Compound Protocol whitepaper
+  * @title Compound's DAIInterestRateModel Contract (version 2)
+  * @author Compound (modified by Dharma Labs)
+  * @notice The parameterized model described in section 2.4 of the original Compound Protocol whitepaper.
+  * Version 2 modifies the original interest rate model by increasing the "gap" or slope of the model prior
+  * to the "kink" from 0.05% to 2% with the goal of "smoothing out" interest rate changes as the utilization
+  * rate increases.
   */
-contract DAIInterestRateModel is JumpRateModel {
+contract DAIInterestRateModelV2 is JumpRateModel {
     using SafeMath for uint;
 
     /**
-     * @notice The additional margin per block separating the base borrow rate from the roof (0.05% / block)
+     * @notice The additional margin per block separating the base borrow rate from the roof (2% / block).
+     * Note that this value has been increased from the original value of 0.05% per block.
      */
-    uint public constant gapPerBlock = 0.05e16 / blocksPerYear;
+    uint public constant gapPerBlock = 2e16 / blocksPerYear;
 
     /**
      * @notice The assumed (1 - reserve factor) used to calculate the minimum borrow rate (reserve factor = 0.05)
@@ -103,7 +107,12 @@ interface PotLike {
 }
 
 interface JugLike {
-    function ilks(bytes32) external view returns (uint duty, uint rho);
-    function base() external view returns (uint);
-}
+    // --- Data ---
+    struct Ilk {
+        uint256 duty;
+        uint256  rho;
+    }
 
+   mapping (bytes32 => Ilk) public ilks;
+   uint256 public base;
+}
diff --git a/tests/Models/DAIInterestRateModelTest.js b/tests/Models/DAIInterestRateModelTest.js
index 3dac04f8f..9906b76e7 100644
--- a/tests/Models/DAIInterestRateModelTest.js
+++ b/tests/Models/DAIInterestRateModelTest.js
@@ -18,7 +18,7 @@ function baseRoofRateFn(dsr, duty, mkrBase, jump, kink, cash, borrows, reserves)
   const assumedOneMinusReserveFactor = 0.95;
   const stabilityFeePerBlock = (duty + mkrBase - 1) * 15;
   const dsrPerBlock = (dsr - 1) * 15;
-  const gapPerBlock = 0.0005 / blocksPerYear;
+  const gapPerBlock = 0.02 / blocksPerYear;
   const jumpPerBlock = jump / blocksPerYear;
 
   let baseRatePerBlock = dsrPerBlock / assumedOneMinusReserveFactor, multiplierPerBlock;
@@ -68,7 +68,7 @@ async function getKovanFork() {
   return {kovan, root, accounts};
 }
 
-describe('DAIInterestRateModel', () => {
+describe('DAIInterestRateModelV2', () => {
   describe("constructor", () => {
     it.skip("sets jug and ilk address and pokes", async () => {
       // NB: Going back a certain distance requires an archive node, currently that add-on is $250/mo
@@ -76,7 +76,7 @@ describe('DAIInterestRateModel', () => {
       const {kovan, root, accounts} = await getKovanFork();
 
       // TODO: Get contract craz
-      let {contract: model} = await saddle.deployFull('DAIInterestRateModel', [
+      let {contract: model} = await saddle.deployFull('DAIInterestRateModelV2', [
         etherUnsigned(0.8e18),
         etherUnsigned(0.9e18),
         "0xea190dbdc7adf265260ec4da6e9675fd4f5a78bb",
@@ -151,7 +151,7 @@ describe('DAIInterestRateModel', () => {
             etherUnsigned(perSecondBase)
           ]);
 
-          const daiIRM = await deploy('DAIInterestRateModel', [
+          const daiIRM = await deploy('DAIInterestRateModelV2', [
             etherUnsigned(jump),
             etherUnsigned(kink),
             pot._address,
@@ -227,7 +227,7 @@ describe('DAIInterestRateModel', () => {
             etherUnsigned(perSecondBase)
           ]);
 
-          const daiIRM = await deploy('DAIInterestRateModel', [
+          const daiIRM = await deploy('DAIInterestRateModelV2', [
             etherUnsigned(jump),
             etherUnsigned(kink),
             pot._address,