Expansion gap in concrete floor

I was doing some repair work in the finished basement which involved removing lower part of drywall. This exposed a perimeter gap of about 1/2 inch all around the floor slab which was filled with strips of black cork-like material. This material apparently absorbed the mosture from the ground soil in many places and had to be removed. What do I do now? Do I fill the expansion gap with polyurethane caulk or can I put DryLok type hydraulic cement to permanently seal out any moisture?
Anyway, what is the purpose of this gap? Was it just to prevent problems during curing or is it still needed now? Will I cause structural problems if I fill the gap with cement? The house is 20 years old and the floor slab is in perfect condition with no cracks.
Thanks, David
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David wrote:

I suggest a good calk. If needed use a backer.
I might add that despite all the adds for products, trying to seal out any moisture is not a practical objective. Keeping it away is most important with sealing the exterior of the walls second. Drains and sump pumps are the last chance backup.

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Joseph E. Meehan

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I am about to pour my basement floor and I am putting a 2x4 all around the perimeter which will later be removed, The idea is that if any water leaks through the wall it will end up in the channel and flow to the sump. Water cannot get onto the floor. Maybe this is what yours is actually for and someone mistakenly filled it with caulking.

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