Fundamentals/ By Jarod Lew

The Sandbox Report

Overview

The Sandbox is a play-to-earn virtual world built on the Ethereum blockchain. Players can choose to purchase voxel-based NFT land tokens (LAND) or build their own NFT (ASSET). This NFTs can be utilised to create gaming experiences, to be traded or collected.

3 Key Highlights

  1. No startup cost required – Users can earn free $SAND from winning contests or Play2Earn mechanisms
  2. 3 free to use products in the Sandbox – Marketplace, VoxEdit, Gamemaker
  3. Marketplace – Sandbox has a marketplace where users can trade ASSET and utilises OpenSea to trade LAND

Value-add

Why is ecosystem valuable?

Flexible approach – Users can customize their own 3D Voxel-styled ASSETs through the free VoxEdit tool with no coding experience. Giving opportunity for endless creativity on how to use ASSET and LAND.

Ownership – Users and owners get to own their own creation and land through NFT

Partnership – Sandbox game structure allows for partnership to enhance gamer’s experience, giving it an opportunity for future collaborations and expansion. Secured over 140 partners including Smurfs, The Walking Dead and Adidas.

Objectives

Objective 1: Change how people live, create, play, govern and earn through participating in the ecosystem

Objective 2: Allow users to have ownership of their creations through NFT

Objective 3: Incorporate blockchain into the virtual gaming space and launch a mobile version

Systematic Risks & Constraints

  • Occasional failed transaction due to congestion and lack of gas fee, causing gas fees from failed transactions to be unrecoverable

Token High-Level Summary

Token Summary

$SAND is a native token of the The Sandbox ecosystem $SAND is a native token of the Ethereum ecosystem

Ecosystem

  • Harmony, Ludena Protocol – Facilitate purchase, storage and sales process
  • Snoop Dogg, Adidas, Smurf, Atari – Collaboration on themed LAND and ASSET
  • Network Arkane – Arkane Wallet, allowing login through social media accounts.
  • Lootex – Facilitate sales of NFT

Market Design

Design of the environment in which the tokens and users exist in

1. Thickness of Market

  • Sandbox allows earning with no investment and offers free tools to build 3D games. This increases the number of audience and increases networking amongst players.
  • There is also many opportunities for partnerships which could attract more users who has interest in the partnering brand.

2. Reduce Congestion

  • Sandbox currently uses Ethereum which prioritises security and decentralisation, however occasionally has difficulties supporting large traffic.
  • Sandbox is looking at layer-2 solutions through Polygon, while still using Ethereum as the main anchor for security, to improve the scalability issue and reduce gas fee.
  • The Sandbox also has Bootcamps where users can learn content such as how to user the VoxEdit and Gamer Maker tool and setting up their wallet. This would reduce congestion on The Sandbox support site, of users who are unfamiliar with the game.

3. Safety

  • Sandbox been audited by Certik. Achieving a score of 93/100 in 2019, which is among the highest in the industry.
  • The Sandbox marketplace smart contracts are publicly available on Github and relies on security of Ethereum to function its smart contract. The smart contract uses a multi-signature wallet backed with 3 hardware wallets.

4. Ease of Use

  • The Sandbox has 2 integrated products to create NFT and games (Voxel Editor and Game maker) which are easy to use, requiring no coding knowledge. Allowing users with no knowledge on coding or designing to participate in creating the ecosystem.
  • The Sandbox Bootcamps orientates users to the usage of entire ecosystem, making it easier for new users to join the economy.

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Mechanism Design

Rules of the game that people have to follow

Governance

1. Decision Making

  • DAO is set to launch in Q2 2022, with staking and voting mechanisms for governance on the game platform
  • Holders of $SAND, AVATAR and LAND will get to vote on the governance decision.
    • AVATAR NFT will be launched in Q4 2021

2. Implementation

Currently, implementation is conducted by the team and its advisors

Market Structure

1. Gameplay

The Sandbox is a blockchain-based alternative to Roblox and Minecraft, where players get to play and interact with other voxel characters in a user generated world while earning rewards through gameplay.

    • Social Experience: Users can decorate their own space for social gatherings with in-game friends
    • Build & Craft: Creators can enhance gaming experience of other users by building their own space or even competitions
    • Exploration & Adventure: Users can explore new LAND while completing missions and adventures.

2. Bargaining Protocol/Pricing Model

  • LAND can be purchased through The Sandbox website for primary sales during airdrops, or through OpenSea and Rarible for secondary sales
    • Presale round of LAND primary sales consist of approximately 20% of LAND supply, with discounts given at an average price from USD$28 to USD$43. Public sales consist of 50.22% of LAND supply with no discounts at an avergae price of USD$48
    • ESTATE (multiple plots of LAND) bought also entitles buyers to discounts, varying on the size of ESTATE

Source: Binaryassets.io

  • SAND can be purchase through approved crytocurrency exchange partners such as Bitmart, MXC, UpBot. Partners can be viewed on https://medium.com/sandbox-game
    • At the time of writing, there is 913,364,619.22 SAND in circulating supply, out of the total 3,000,000,000 SAND
  • Alpha Pass: Give players the chance to explore The Sandbox metaverse through gameplay, social hubs and play-to-earn from 29th Nov to 20th Dec 2021.
    • LAND Owners stand a chance to win 1,000 Alpha Passes in a raffle
    • Anyone with a Sandbox account can also participate in Daily Social Contests to win Alpha Pass, with 750 passes given every week.
    • Users can also purchase the pass from other owners via OpenSea
    • The Sandbox Alpha Pre-Season 0 will be launched in the future where players can earn $SAND from playing games
  • The Sandbox also have plans for a subscription based model for players, where they can gain access to exclusive in-game features and premium ASSETs.
  • Contests and events
    • Users can participate in events and contests hosted by The Sandbox to win NFTs and $SAND.
    • Contests includes creating theme-based games, Discord Hunts and many more.
    • Events include giveaways, staking events and party passes.

2. Community information

LAND owners can merge their 1×1 plots of land with other users or LAND to form larger spaces

  • ESTATE – multiple 1×1 plots of LANDs merged, varying from Small (3×3) to X-Large size (24×24) to create experiences
  • DISTRICT – a type of estate owned by more than 1 owner. DISTRICT owners can set special governance rules to change experiences within the game.

ROADMAP

  • 2022: Launch mobile version, Launch of DAO

3. Idiosyncratic Risks

  • LAND inflation potentially causes diminishing effects on earning with no investment (Avg $30 in 2019 to $15,000 in 2021). This could deter users who are trying to earn from joining for free
  • Oversupply of common ASSET NFT causing prices to shift downwards. Sandbox can consider incentivising users to spend ASSET which could remove them from supply circulation
  • Users may create bots or multiple Sandbox accounts to obtain the free Alpha Pass and earn with no investment

Incentives

1. Voting Protocol

$SAND, LAND and AVATAR owners can submit a governance protocol or vote for proposals

2. Allocation mechanism

  • Transaction Fee: All $SAND transactions comes with a 5% transaction fee, with 50% allocated to the Foundation Fund and 50% to the Staking Pool
  • LAND Sales: 50% will be locked for a year prior to being sold in auction, with proceeds allocated to Treasury
    • 74% of LAND is for sales, 10% owned by The Sandbox, 16% in reserve
  • Company NFT Sales: 25% to company reserve, 6 months lock-up period
  • Player subscription & services: Revenue from subscriptions and services will be allocated 25% to Foundation, supporting growth of token ecosystem
  • Advertising: Revenue from advertising will be allocated 25% to Staking pool, 75% to Foundation

Token Design

Rules of the game that tokens have to follow

Token Policy

1. Monetary Policy

Source: https://research.binance.com/en/projects/the-sandbox

2. Token Valuation 

  • $SAND valuation fluctuates based on demand, supply and market factors. Not designed as a stable coin
  • LAND is pegged to the USD, sold in ETH
    • Drivers of LAND price varies from the type of land and the circulating supply.
    • Type of LAND includes premium lands, which are near major partners or social hubs which could attract higher traffic. Therefore has a higher value
    • Circulating supply available of LAND fluctuates the valuation of LAND token as well
  • ASSETs prices varies according to the scarcity and type.
    • Scarce resources such as GEMs and CATALYSTs, with a limited amount of supply, can be added onto ASSETS to improve the utility and scarcity of this ASSET.
    • Premium ASSETs are also released occasionally in airdrops or events, which are scarce due to its limited supply.

Financial Incentives

1. Platform Activities 

$SAND use-case:

  • Medium of exchange for LAND, ASSET, GEM, CATALYST and Avatar customisation
  • Governance participation
  • To upload ASSET creation onto marketplace to sell
  • Staking on LAND or liquidity mining pool
  • Playing games which charges entry fee
  • Hiring designers and artists to build ASSETS or games for LAND owners

2. Financial Returns

  • 2.5% from transaction revenue, 25% from advertising revenue are allocated to the staking pool as rewards.
  • LAND stakers can earn rewards such as GEMs and NFTs.
  • The Sandbox Liquidity Mining adds 1,500,000 $SAND every month to mining pool, with multiplier incentive for LAND owners
  • Stakers can also stake with Binance, offering 12.36% to 25.15% APY for duration of 30 days to 90 days

Token Architecture

Useful for non ERC-20 tokens. And how financial products are structured.

1. Token structure

Source: The Sandbox Whitepaper

  • $SAND is a ERC-20 token, used as the main utility and currency, built on ETH blockchain.
  • LANDs are NFT ERC-721 tokens.
  • ASSETs are NFT after being uploaded to The Sandbox marketplace, which are stored and traded based on the ERC-721 and ERC-1155 smart contract standard.
  • GEMs and CATALYSTs are ERC-20 utility token that are burnt upon usage.

2. Token distribution

  • $SAND to investors through the Private Sale, Founders, and Advisors are locked up 100%, 5 years vesting and 12-month cliff.
  • Reserves: 6-month lockup period

Source: The Sandbox Whitepaper

Conclusion

The Sandbox has vast opportunities for growth, as it utilises a flexible approach which allows users to customize the whole gameplay experience while giving users ownership of the NFT. Furthermore, the opportunity for future collaboration with big brand partners allows it to leverage on the partners fanbase to attract a wider audience.

It has also recently released its Alpha metaverse allowing it to be ahead of many NFT-based game competitors in the untapped blockchain gaming market. However there is the risk of over-inflating the prices of LAND and oversupply of ASSET, which could cause value of NFT to drop

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