Hidden Cap

A hidden cap is a maximum fundraising limit in a token sale that the organizers do not reveal until it is reached or the sale ends. It appeared in some initial coin offerings around 2017 as an alternative to a published hard cap, which can trigger a race in which large buyers and bots pay high gas fees to grab most of the tokens within minutes. By keeping the limit secret, often revealing it in stages, organizers hoped to spread the sale over a longer period and among more buyers. Critics argued that hidden caps reduced transparency, since buyers could not tell how much the project would raise, and that organizers could adjust the limit to suit themselves. The approach faded with the ICO boom. A related term, the soft cap, sets the minimum a sale must raise to go ahead. Also see crowdsale.