From messari by Justin Baba

Key Insights

Primer

The Sandbox (SAND) is a gaming metaverse where players and creators can make 3D assets and experiences (e.g. games) that can be monetized via NFTs. The tokenized and gaming features within The Sandbox ecosystem are:

The Sandbox was initially launched as a 2D mobile game in 2012 by the software development company Pixowl but rebranded as a 3D metaverse game in May 2018. It provides Roblox-esque gameplay with digital ownership and more robust in-game economics due to the tradeable nature of the SAND token and the other assets within the Sandbox virtual world.

While The Sandbox gameplay is similar to Minecraft, its use of blockchain technology allows users to self-custody their assets and creates more robust in-game economics due to the tradeable nature of the SAND token and the other assets within the Sandbox virtual world. Examples of these assets include in-game NFTs and user-generated NFTs that can be used and sold within The Sandbox ecosystem.

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Key Metrics

Quantitative Analysis

SAND staking is conducted on the Polygon network and involves two staking pools: one for LAND owners and one for everyone else. LAND owners can stake up to 2,000 SAND per LAND asset in this pool. In the other pool, any SAND holder can stake their SAND, though LAND owners receive a multiplier based on the number of LANDs they own.

Daily average SAND staked was down 18.7% QoQ, from 84 million to 68.3 million. While the amount of SAND staked by non-LAND owners decreased by 5.6% QoQ, the amount of SAND staked by LAND owners increased by 1.6% QoQ. This indicates an increase in alignment between LAND owners and the broader Sandbox ecosystem. Additionally, the percentage of the circulating supply of SAND staked fell by 3.6% QoQ from 2.44% to 2.36%.

Activity on The Sandbox is conducted through digital real estate called LAND NFTs. Content creators can host metaverse experiences on plots of LAND. As such, LAND is valued highly amongst all The Sandbox NFTs. While non-LAND NFTs are valued lower, they are still necessary for various types of activities in The Sandbox metaverse (e.g., CATALYSTS to create ASSETS and give them attributes).

With a difference in general monetary value, LAND is more scarce (at a 0.11 ETH floor on OpenSea as of September 30), lowering the potential buyer pool. Non-LAND assets are priced lower (at a 0.0001 ETH floor on OpenSea as of September 30), allowing for a substantially larger potential buyer pool. Throughout the first half of 2024, the NFT market has seen a decline in demand and activity across a majority of the sectors, thus leading to an overall decline in demand for assets from The Sandbox. However, in Q3, daily average active LAND buyers increased by 14.8% QoQ, indicating a potential reversal in demand for LAND. On the other hand, daily average active non-LAND buyers declined by 40.5% QoQ.

Financial Analysis

In Q3, the total market cap of all cryptocurrencies declined by 4% as the market saw activity cool off after a strong first half of the year in 2024. In line with this broader cryptocurrency market contractions in Q3, SAND’s circulating market cap declined by 7.4% QoQ from $746.9 million to $691.7 million. This decline was largely attributable to the price decline of SAND, down 12.33% from $0.33 to $0.29.

The total primary sale volume measures the USD amounts for which assets from The Sandbox were sold, and The Sandbox company retains the earnings from these primary sales. The Sandbox conducts five different types of primary sales: public non-LAND, public LAND, private LAND, private ESTATE, and private Auction.

In Q3, total primary sales volume was up 17.3% QoQ, increasing from $252,000 to $297,000. This increase was primarily driven by an increase in LAND and private LAND sales volume, which increased by 36% and 179.6% QoQ, respectively. In contrast, non-LAND sales volume fell the most, decreasing by $16,000 QoQ (down 10%). As a result of these increases in primary sales volume, total revenue increased by 2%, from $272,000 to $277,000 in Q3.

Additional Developments

Partnerships and Integrations

Events

The Sandbox hosts a variety of virtual events on its platform for its players to enjoy and win rewards.

Land Sales

The Sandbox held two LAND sales in Q3 2024. The LAND land sale was the Show City LAND sale. This sale ran from July 10 to July 25 and included 296 standard and 28 premium plots of LAND. Additionally, as part of its partnership with Attack on Titan, an anime show, the project held a LAND sale in which 213 standard plots of LAND, 14 Attack on Titan premium plots of LAND, and 7 auction LAND plots were made for sale. The sale began on September 26 and is ongoing as of the time of writing.

Updates and Roadmap

In Q2 2024, The Sandbox launched The Sandbox DAO to allow the community to participate in governing the project's direction. The first proposal introduced the Sandbox DAO Constitution, which established the Special Council, Advisory Board, communication channels, code of conduct, and administrative resources. Additionally, the DAO formalized the creation of The Sandbox Foundation, which is the legal entity responsible for supporting the DAO.

In Q3, the DAO has passed the following notable proposals:

Additionally, in Q3, The Sandbox expanded the deployment of SAND beyond the Ethereum and Polygon blockchains to BNB Smart Chain and Base via LayerZero’s omnichain interoperability protocol. This move aims to enhance interoperability within the Web3 gaming ecosystem, potentially reducing barriers to entry and transaction costs for users across different networks. The Sandbox also made CATALYSTS available for purchase directly on The Sandbox Marketplace.

Closing Summary

The Sandbox experienced mixed outcomes in Q3 2024, with SAND’s market cap falling 7.4% QoQ to $691.7 million, in line with the market decline in the NFT sector and the broader crypto market. Staking activity declined by 18.7% QoQ, though LAND buyer activity grew by 14.8%. Additionally, total primary sales volume was up 17.3% QoQ to $297,000. Key advancements included partnerships with SSC Napoli, Magic Eden, and Attack on Titan, adding new elements to The Sandbox ecosystem. The Sandbox also conducted two LAND sales, the Show City LAND sale and an Attack on Titan LAND sale.

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