How Does a “Hard Cap” Limit Influence Token Supply?
A hard cap is the maximum amount of money a project is willing to accept during its fundraising phase. Once this limit is reached, the sale stops.
Crucially, the hard cap indirectly determines the initial circulating supply, as the number of tokens sold to reach that cap is fixed. It also signals a commitment to a controlled initial distribution and prevents excessive centralization of funds.
Glossar
Hard Cap
Limitation ⎊ The hard cap, prevalent across cryptocurrency offerings, options trading, and financial derivatives, represents a predetermined maximum funding target or notional value.
Cap
Strike ⎊ Cap, within cryptocurrency derivatives, denotes the predetermined price level at which an option contract ⎊ typically a call or put ⎊ may be exercised.