The Current State Of The Sandbox Economy
The Sandbox’s digital land volume sales have been in decline since January as the average digital land price has begun to flatten while unit sales rise again.
The Sandbox’s $SAND token market cap plummeted to about $1.62 billion this year, down from November 2021 highs of around $6.96 billion. The decline could be attributed to the collapse of the cryptocurrency market, but the decline in digital land sales may also have played a part.
The $SAND token price declined from highs of about $7.62 at the end of 2021 to $1.31 at the time of writing (August 6, 2022). While there remains to be a rebound in sight, the price seems to be leveling up around the $1.30 region after falling to $1.14.
With the $SAND token price falling, the fully diluted market cap of the Sandbox’s ecosystem has plunged to around $3.93 billion, down from all-time highs of about $22.86 billion, also achieved in November of last year.
The downward spiral may have been driven by the continuous decline of the average selling price of virtual land on the Sandbox metaverse, leading to a fall in the number of units sold per month.
According to data provided by MetaMetriks on Dune Analytics, the average price for a plot of digital land on the Sandbox decreased from $7,031 in January 2022 to around $3,060 in April, followed by a minor increase to $3,071 in May.
Ignoring the outlier Month of November 2021, the number of units sold per month fell steadily from 7,169 in December 2021 to a total of just 2,723 units in March 2022, although this figure rose to 2,909 in April and again to 3,576 in May.
The data indicates a correlation of the increase in demand for digital land through April and May with the rebound in the average selling price through May.
But the volume sales numbers continued to fall in May, with the selling price recovering a month later in comparison to when unit sales started rising again.
Despite the rebound in the average selling price and the recovery in the total number of units sold, land sales volume continued the decline that began in January 2022, falling from $46 million to around $6.55 million in May.
The Top Landowners
The top landowners are predominantly investors in The Sandbox, including Binance and Galaxy Interactive, NFT communities like Whale, MetaKovan, and Kongzor, or large crypto-focused companies that have committed to building in The Sandbox Metaverse.
The top 5 landowners owners (one of which is The Sandbox) own 11% of the total LAND supply. Evaluating the percentage of ownership in a digital world is novel to ensure the amount owned by any one entity decreases over time, facilitating greater in-world entrepreneurship and also monitoring that landowners are actively building on parcels as opposed to simply holding for speculative purposes.
High Priced Virtual Real Estate
It’s worth noting that The Sandbox Heatmap groups 12×12 parcels to show the total LAND volume. So, the most speculated individual parcels of land (i.e., those with the most aggregate volume) aren’t necessarily in the highest volume 12×12 grouping. The top five largest purchases (highest price paid for a single parcel of LAND) all exceed $100,000.
The Most Expensive LAND Purchases
Cayson.eth paid $245,000 for a single parcel of LAND. The buyer, who also owns BAYC 8435, purchased all 35 surrounding plots for a total of $547,119, amounting to $15,632 per unit, and required the final parcel to create a 6×6 (36 plot) estate.
Olikars.eth holds the second, tenth, and fourteenth largest LAND purchases, spending 80 ETH ($343,000 at the time) to acquire all three parcels. The most expensive of the plots is situated beside the future Walking Dead game. The other two are adjacent to the Atari RollerCoasterTycoon World and the Atari XL estates.
Sandbox user and BAYC #2765 owner Ksaffy holds the title for the third largest plot transaction with a parcel purchased that lies near The Sandbox Central Hub where all players spawn into the game.
The fourth-largest transaction was $101,883 by Sandbox user CryptoSue for a single plot adjacent to Snoop Dog’s estate and Weedbits plot.
Club9.eth ranks fifth for the largest transaction, purchasing plot 55816 for 24 ETH (or $101,760) in November 2021. In January 2021 they sold the same plot for 3.5 ETH, a significant loss. This plot was then sold again to an unknown wallet several days later for 4.67 ETH.
The top purchases are typically made by landowners trying to acquire specific plots of land that they believe will help drive traffic to their parcel.
What’s On The Horizon For The Sandbox?
Governance And Notable Events
The Sandbox completed its $93 million Series B fundraising round in November, led by Softbank. They have taken a distinct approach towards in-game content, partnering with various brands and licensing intellectual property for dozens of companies. In a press release, The Sandbox stated that the new capital would be used to expand its IP licensing efforts and grow the virtual world.
In December, The Sandbox partnered with Hong Kong-based entrepreneur Adrian Cheng who purchased an estate of land in The Sandbox’s Mega City, a location set to emulate Hong Kong with ownership spread across a variety of Hong Kong-based companies and other prominent individuals.
In November last year, The Sandbox launched its long-awaited Alpha version of the virtual world, which enables users to interact with other players and explore the Main Hub of the Sandbox universe. As part of the Sandbox Alpha, the Sandbox released 4 NFT avatar collections: Agora, Gearbox, Ducks, and Faction.
The Sandbox Alpha was limited to 5,000 passes and had thousands of NFTs distributed to participants. As The Sandbox looks toward growing its user base following a successful Season 2, Alpha Season 3 is scheduled for release in the second half of 2022, with registration already open.
While SAND already maintains a liquidity pool on UniSwap with Ethereum gas fees making gaming on Ethereum’s base layer untenable, The Sandbox had announced its intention to integrate with Polygon, starting with an mSAND <> MATIC staking pool on QuickSwap. All Sandbox transactions incur a 5% fee, and 2.5% of this is allocated to various staking pools.
Since a variety of transactions are required when interacting with The Sandbox virtual world (marketplaces, NFT creation, etc.), Polygon will enable more interactions between tokens. Polygon and The Sandbox teams are working on a custom bridge to make all tokens in The Sandbox available on Polygon.
The Sandbox DAO
While not yet deployed, The Sandbox DAO (decentralized autonomous organization) can vote on Foundation grants and make decisions on certain game parameters. The Sandbox DAO, launching in 2022, will be governed by SAND token holders and asset owners (e.g., LAND).