What is Hidden Cap?

A hidden cap is a blockchain-focused fundraising strategy where the fundraising goal's upper limit is kept secret and known only to the blockchain team. Used on some Initial Coin Offerings (ICOs) and similar equity offerings, proponents claim that hidden caps benefit smaller investors. This is because bigger investors generally want the transparency of knowing the total amount or supply of an asset before they are willing to make a substantial capital investment. This typically discourages large investments as a hidden cap affects investment allocation decision-making. Critics counter that hidden caps go against the blockchain ethos of transparency, verifiability, and trustlessness.