GlossaryIntermediate
Soft Cap
The minimum amount a token sale aims to raise for a project to proceed, as opposed to the maximum it's capped at.
A soft cap is the minimum amount of funding a token sale aims to raise for a project to actually proceed — if a sale doesn't reach its soft cap, funds are commonly meant to be returned to contributors rather than the project continuing with insufficient funding.
This is the opposite end of the range from a hard cap, the maximum amount a sale will accept, with the soft cap representing the minimum viable outcome rather than the ceiling.
Examples
- A token sale that fails to reach its soft cap is generally expected to refund contributors rather than proceed with a smaller-than-planned raise.
- A soft cap and a hard cap together define the funding range a token sale is designed to operate within.