admin 
Hard cap is an important factor that crypto analysis websites and project communities pay close attention to. When a company wants to raise money for a cryptocurrency project, it usually starts an Initial Coin Offering (ICO). That is the maximum number of tokens that can be sold during the ICO. It represents the highest amount of investment the team aims to collect.
Once the hard cap or maximum investment level is reached during the ICO, the tokens are considered sold for that round. This means that developers don’t accept any more funds from investors in exchange for project tokens because they have achieved their goal.
You might also like: What is Move to Earn?
The company team analyzes their needs and determines the appropriate hard cap target. They consider factors like the scarcity and considered value of the token when deciding on this parameter. Some sources use the term hard cap to refer to the maximum supply of a specific token or coin, although not everyone agrees with this usage. In this context, it represents the limit set by the cryptocurrency’s protocol on the total number of tokens or coins that can exist in the blockchain network. However, it’s better to use the term maximum supply for such cases.
What Is a Soft Cap?
Soft cap is the minimum amount of funds that a project needs to raise in order to start its development. As the team demonstrates the viability of their project and gains confidence in it, they can ask for more funds and sell more tokens.
This continues until they reach the hard cap level.
The hard cap is set at a much higher level than the soft cap because it represents the fundraising target, not the minimum requirement. On the other hand, if the soft cap limit isn’t surpassed, the funds are returned to all purchasers and the project doesn’t begin.
You can present your own thoughts as comments about the topic. Moreover, you can follow us on Telegram and YouTube channels for the kind of news.