If digitalization is the natural evolution of the physical world, then decentralization is the natural evolution of the digital world. The global gaming industry is worth more than $300 billion, and now more than ever, gamers realize that they must own the games they play. A frontrunner in this initiative is The Sandbox – a metaverse and Play-to-Earn (P2E) game powered by SAND.
The Sandbox is an only game built on Ethereum that frees gamers from the shackles of centralization by introducing on-chain governance and in-game NFT collectibles. What enables SandBox’s decentralization is the SAND cryptocurrency, and in this article, you’ll find everything you need to know about the project’s tokenomics.
What Is The Sandbox?
The Sandbox is an NFT metaverse and P2E online game based on the Ethereum blockchain. The game features a virtual world in which anything is possible. You can earn virtual real estate, socialize with other players, buy and sell in-game items with real-world value, and participate in various adventures.
Video game studio Animoca Brands, founded by Sebastien Borget and Arthur Madrid, created The Sandbox in 2018. The game was developed due to the need of decentralization in the gaming industry. Madrid and Borget wanted gamers to experience the wonders of decentralization, like selling or transferring in-game items.
Items such as skins and weapons carry a high price in the gaming world. Games such as Counter Strike: Global Offensive, League of Legends, and Fortnite have produced extravagant online sales in the past few years. For example, the ultra-rare Dragon Lore weapon skin costs $2,700 and can go as high as $274,000 depending on its condition.
But in most games, you can’t transfer or sell valuable items without selling your entire account. Or if the possibility is there, like with Steam, you can’t sell to someone without having the company take a hefty cut out of your sale.
The Sandbox facilitates decentralized ownership by utilizing blockchain technology and combining it with non-fungible tokens (NFTs). Everything in the game is made available in the form of an NFT that you can transfer, sell, and trade. You can own land parcels, skins, and various other in-game items.
You also have the opportunity to create games within The Sandbox metaverse. Moreover, doing so requires absolutely no coding experience. You can use the project’s VoxEdit software to intuitively create fascinating games by doing nothing more than using drag and drop gestures.
What’s even better is that creators get rewarded for building out the game’s metaverse. It’s a win-win situation in the end for both players and creators alike, all thanks to decentralization.
The Sandbox (SAND) Tokenomics Explained
SAND is a cryptocurrency that powers The Sandbox ecosystem and establishes complete decentralization within it. It is an ERC-20 token used as an in-game currency, but it also has utility within the ecosystem’s governance model.
The next couple of sections tackle two important topics: distribution and use cases. You’ll learn more about how the SAND token was distributed and explore the various ways you can use SAND while playing the game.
The SAND token is an ERC-20 cryptocurrency launched in August 2020. The project raised its fundraising goal of $3 million by August 14. 12% of the token supply was sold at a price of $0.008. The funds were raised using BNB as the fundraising took place on Binance Launchpad.
The SAND token fundraising was an IEO (Initial Exchange Offering) in which the team sold 360 million tokens. Before the public sale, Animoca Brands held a private seed round in November 2019 in which it raised $3.21 million. The tokens were sold at a rate of $0.0072 per SAND.
Another private funding round took place with a strategic sale in July 2020. The token was sold at an average price of $0.005. The team also managed to raise additional funds in a Series B funding round held in November 2021. Sandbox raised a total of $93 million during this round.
SAND’s total distribution was configured in the following way:
Binance Launchpad Sale: 12%
Private Seed Sale: 17.18%
Private Strategic Sale: 4%
Company Reserve: 25.82%
SAND has a maximum token supply of 3 billion tokens. The cap is supposed to be reached by February 2025 after the entire supply becomes unvested.
SAND has two primary use cases: in-game currency and governance.
As a player, you can use SAND to pay for various in-game items. For example, you can buy NFT assets that you can wear with your avatar. You can also buy virtual land parcels that you can own and customize according to your liking. You might want to have a virtual hub for your DAO or a home to invite your friends over while socializing over Discord.
Most in-game actions require spending SAND. You need SAND in order to use certain features in the game, but you’re also rewarded with SAND tokens whenever you complete specific actions. This aspect of the game makes The Sandbox a Play-to-Earn experience that rewards you for actively contributing to the game.
The second use case is governance. A healthy governance model is what allows players to contribute to the game by steering its development. The Sandbox and its smart contracts are entirely owned and controlled by the DAO – a Decentralized Autonomous Organization.
You require SAND to participate in the game’s DAO. Spending SAND allows you to vote on governance proposals or to propose new ideas. But before you vote, you need to stake your SAND tokens – which brings us to a minor, yet equally important part of the tokenomics.
Staking is an important factor inside The Sandbox’s ecosystem as it allows you to generate yield and participate in governance. The yields you obtain are denominated in Gems and Catalysts – items you require to create NFT assets. Besides that, you also need to stake a certain amount of SAND before you can vote or issue new governance proposals. This keeps players from spamming the network with bad proposals or proposal spam.
The idea of a Metaverse is now mainstream thanks to the rise of blockchain adoption – along with marketing corroborated by well-known companies such as Zuckerberg’s Meta. The Sandbox represents one of the first games that turned the metaverse initiative into a reality by launching a P2E NFT game in which players have all the control.
The combination of NFTs, Play-to-Earn, virtual socialization, and other factors all contribute to The Sandbox’s increasing success. The game’s tokenomics incentivize players to actively play a part in the game’s development and story. Early adopters are rewarded by collecting land parcels, SAND tokens, and in-game items for cheap before they dramatically rise in value.
SAND’s strategic distribution creates room for various methods of incentivizing players to join the digital metaverse. And if the incentives are strong enough, the team will continue attracting more and more players. Although the bear market has slowed down the adoption of metaverse projects, there is hope that a market revival might bring SAND to the top again.
If you want to learn more about The Sandbox, I suggest visiting the following links:
Marko is a crypto enthusiast who has been involved in the blockchain industry since 2018. When not charting, tweeting on CT, or researching Solana NFTs, he likes to read about psychology, InfoSec, and geopolitics.