What is the difference of hard cap to soft cap? Did we base on this if we are going to invest in altcoins? Share your comments.
To know the differnce of the hard cap to soft cap you have to know the meaning of the 2 first so you will understand and know the difference.
Hard Cap
- The hard cap of an ICO means the maximum amount of capital that it aims to gather. Most of the up and coming cryptocurrency projects set the hard cap very high. Most of the set hard caps are unlikely to be reached. But famous or hyped projects do reach it with ease. The hard cap is the number of the maximum capital needed and projects will mostly stop accepting additional funding after the hard cap.
Soft Cap
- The soft cap is the capital amount gathered at which the crowdsale event will be considered successful. It is the minimal amount of funds needed and aimed at by the project to proceed as planned. Most of the projects reach their soft caps because an Initial Coin Offering is currently one of the best ways to kick start a project and to raise capital.
Now lets differentiate the difference of the hard cap and soft cap
- The Hard Cap is the maximum amount of the coin while the soft cap is the minimum amount of the coin.