State of The Sandbox Q4 2023

Key Insights

• The circulating market cap of SAND increased by 89% QoQ from $649.9 million to $1.2 billion. SAND outperformed the total market cap of all cryptocurrencies in Q4.
• Non-LAND activity saw impressive QoQ growth in Q4, including daily average active non-LAND buyers (73%), non-LAND mints (233%), daily average non-LAND secondary sales (173%), and daily average non-LAND secondary volume (78%).
• The Sandbox partnered with brands like Drecom, Gucci, Lacoste, Warner Music Group, Sandsoft and Mediacorp. Several other brands and companies also focused on building virtual experiences in the Web3 industry.
• 1.8 million SAND was given as rewards to players during the Dr. Bomkus’ Trials event. Other popular Q4 events included the FallO’ween event, the “Season’s Greetings” event, the Lotte World experience, and more.

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 leveraged by The Sandbox are listed below.

• SAND — an ERC-20 token and digital in-game currency used for purchases, monetization, and asset creation
• LAND — digital ownable land within The Sandbox virtual world
• ESTATE — a combination of LANDs to create a larger plot
• ASSET — assets created using the VoxEdit application that are converted to ERC-1155 tokens when uploaded to The Sandbox marketplace
• AVATARS — ERC-721 tokens that are playable characters within The Sandbox virtual world
• CATALYST — tokens burnt to define an ASSETs tier/scarcity
• Game Maker — a toolbox that enables users to create 3D games and experiences in The Sandbox virtual world
• VoxEdit — software used to create and animate equipment and other types of gaming assets
• Game Client — enables players to play experiences created with the Game Maker

The Sandbox 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.

Sandbox offers a variety of in-game NFTs as well as user-generated NFTs. The VoxEdit NFT builder is used for creating 3D objects (ASSETs) such as characters, equipment, wearables, and art.

The Sandbox was initially launched as a 2D mobile game in 2012 by the software development company Pixowl. Pixowl was founded in 2011 by Arthur Madrid and Sebastien Borget. The mobile game iteration of Sandbox accumulated more than 40 million downloads by April 2018. In May 2018, The Sandbox rebranded as a 3D metaverse game and blockchain-focused development began. In August 2018, Pixowl and The Sandbox were acquired by Animoca Brands, a gaming-focused software development company and VC Fund.

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Network Overview

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 8% QoQ, from 110.2 million to 101.7 million. By the end of Q4, 23.8 million SAND was staked in the LAND pool, and 74.8 million SAND was staked in the non-LAND owners pool. The amount of SAND staked by LAND owners decreased by 7% QoQ, but the amount of SAND staked in the non-LAND owners pool actually increased by 1% QoQ. Additionally, the percentage of circulating supply of SAND staked fell by 11% QoQ from 5.5% to 4.9%.

The decrease in SAND staked throughout 2023 also coincided with lower SAND staking rewards. In Q4 of last year, 5.6 million SAND was distributed as staking rewards. In Q4, this number fell by 82% to 1 million SAND. However, over the same time period, the daily average amount of SAND staked only fell by 9% from 112.2 million. This dynamic suggests that The Sandbox may have been overcompensating stakers earlier in the year.

Non-LAND minting activity bounced back in Q4, totaling 30,194 mints (up 233% QoQ) for the entire quarter. This also lead to a YoY increase of 246%. Popular non-LAND mints in Q4 included Avatars from the Captain Laserhawk: A Blood Dragon Remix, Extraordinary Attorney Woo, and THE NOTORIOUS B.I.G. Big Poppa collections. As for LAND items, they experienced a downtrend in Q4. After an impressive 3,719 LAND mints in Q3, LAND mints fell by 59% QoQ to 1,536 in Q4.

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 harder to acquire (at a 0.33 ETH floor on OpenSea as of December 31), lowering the buyer pool. Non-LAND assets are priced lower (at a 0.0001 ETH floor on OpenSea as of December 31), drawing a larger pool of buyers. These differences were accentuated by poor NFT market conditions in 2023, potentially contributing to the number of active LAND buyers falling (down 20% QoQ) and to active non-LAND buyers increasing (up 73% QoQ).

The secondary sale volume measures the USD amounts for The Sandbox assets that were sold on secondary exchanges like OpenSea and LooksRare.

Daily average secondary volume for LAND increased by 11% QoQ, from $19,100 to $21,300. The daily average for secondary sales of LAND also increased by 19% QoQ, from 30 to 35. As such, the remaining active buyers demonstrated a willingness to spend larger amounts of money on LAND, even though the number of active LAND buyers decreased in Q4.

Alongside the number of active buyers for non-LAND items increasing in Q4, the daily average secondary volume for non-LAND items increased by 78% from $1,900 to $3,400. Furthermore, the daily average for sales also increased by 173% QoQ from 64 to 176.

Financial Overview

Q4 was a strong quarter for SAND’s price performance, as its circulating market cap increased by 89% QoQ from $649.9 million to $1.2 billion. This increase was largely attributable to the price increase of SAND, up 86% QoQ from $0.31 to $0.58. Additionally, SAND outperformed the total market cap of all cryptocurrencies, which gained 54% in Q4. Comparatively, SAND also outperformed gaming peer MANA (up 68% QoQ), but it slightly underperformed AXS (up 92% QoQ) and GALA (up 98% QoQ).

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

In total, primary sales volume was down 47% QoQ, decreasing from $1.38 million to $739,000. In nominal terms, primary LAND sales volume fell the most, decreasing by $409,000 QoQ (down 55% QoQ). In percentage terms, Auction volume fell the most, decreasing by 69% QoQ (down $24,000 QoQ).

The Sandbox’s breakdown of primary sales volume was consistently changing throughout 2023. In Q1, the biggest driver of primary sales volume was private LAND sales. By Q4, however, public LAND sales had become the largest driver, representing 44% of all primary sales volume. Categories that saw an increase in share of primary sales volume in Q4 included non-LAND sales (up 43% QoQ to 29%) and private LAND sales (up 19% QoQ to 11%). Categories that saw a decrease included Auction sales (down 43% QoQ to 1%), public LAND sales (down 17% QoQ to 44%), and Estate sales (down 4% to 14%).

Total revenue is the sum of the total primary sale volume and total royalty revenue. Royalty Revenue for an individual secondary sale varies from 0 to 5%.

Total revenue was down 42% QoQ, from $1.4 million in Q3 to $839,000 in Q4. This drop was primarily due to the decrease in primary sales volume, as that is the largest driver of revenue for The Sandbox. Despite the fall in revenue, royalty revenue picked up in Q4. Royalty revenue from LAND sales increased from $51,000 to $95,000, an 87% QoQ increase. Non-LAND royalty revenue was down slightly, down 12% QoQ from $6,000 to $5,000.

Qualitative Analysis

Q4’23 marked another busy quarter for The Sandbox, highlighted by various events, partnerships, integrations, and updates. The Sandbox remains committed to creating one of the most immersive metaverses in all of Web3.

Partnerships and Integrations

The Sandbox announced a series of new partnerships and integrations in Q4. The Sandbox partners typically launch unique, bespoke metaverse experiences within The Sandbox and notable partnerships have been highlighted below (in chronological order):

• T&B Media Group (October 2) – Thailand-based company T&B Media Group is developing family-friendly content for projects such as Mittaria and Translucia.
• Drecom (October 9) – “Wizardry” franchise creator, Drecom, is launching an NFT collection and other social experiences on The Sandbox.
• Sandsoft (October 13) – The Sandbox is expanding to Saudi Arabia and the Middle East through its partnership with Sandsoft.
• hi (October 24) – The Sandbox partners with hi on a debit card that allows users to spend SAND in-store and online.
• Shepperton Design Studios (October 31) – Shepperton Design Studios will be launching a Stormtrooper experience in The Sandbox.
• Banijay Group – The Sandbox partners with the Banijay Group to deliver virtual experiences of the popular TV shows “The Peaky Blinders” and “Black Mirror.”
• Gucci (November 8) – Renowned consumer brand Gucci launched Gucci Cosmos Land, an immersive exhibition experience in The Sandbox.
• Aavegotchi DAO (November 16) – Gaming studio Gotchi French Studio releases the “Ripple of the Gotchiverse” Adventure in The Sandbox.
• Ubisoft (November 20) – Gaming studio Ubisoft partnered with The Sandbox to release an Avatar collection for Captain Laserhawk Blood Dragon.
• Shemaroo Entertainment (November 23) – Bollywood conglomerate Shemaroo Entertainment is developing a cultural metaverse experience in The Sandbox for Bollywood.
• Lacoste (November 23) – Lacoste launches a multiplayer experience in The Sandbox where players can win SAND by exploring The Lacoste World Tour.
• Nuqtah (November 23) – Nuqtah, a Web3 infrastructure builder will work in collaboration with Sandsoft to deliver metaverse experiences in The Sandbox.
• Warner Music Group (December 4) – An avatar collection in honor of American rapper Notorious B.I.G. launches alongside a playable experience featuring the rapper’s hometown of Brooklyn.
• Mediacorp (December 18) – Mediacorp launches an interactive experience in The Sandbox to celebrate the new year.
• DanceFight (December 19) – The Sandbox joins forces with DanceFight to support global hunger relief efforts through Action Against Hunger. Users can purchase NFTs where all proceeds are donated.

Events

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

The Sandbox launched the Lotte World experience in early October in partnership with the South Korean amusement park.

Q4’s cornerstone event was Dr. Bomkus’ Trials, an original franchise created by The Sandbox. Dr. Bomkus’ Trials featured six different multiplayer challenges that went live on October 25. The challenges were (i) Hangar Games, (ii) Royal Flushed, (iii) Temple of Dum-Dum, (iv) deadmau5, (v), Lab Rats, and (vi) Funny Fall.

As a part of the event, The Sandbox gave out 1.8 million SAND as rewards. Rewards were split as follows across the six different trials:

• Rank #1: 1 CRYSTAL NFT (redeemable for one of these rewards)
• Ranks #2-10: 5,000 SAND
• Ranks #11-500: 200 SAND
• Ranks #501-1000: 100 SAND

Although any user could participate in the Trials, only users with a Bomkus Pass NFT were eligible for rewards. Bomkus Passes were initially distributed to LAND and Avatar owners, adding utility to their owner status. Additionally, passes could be acquired on secondary markets. Dr. Bomkus Trials’ ended on December 6, and rewards were claimable on December 20.

Another popular event during Q4 was the FallO’ween Event. The FallO’ween Event was a 30-day journey where players participated in various games from partners, including Ledger, Valentino Rossi, The Walking Dead, Anicube, Pororo, Gordon Ramsey, Blast Valley, Shibuya Night, and more. Distinct reward pools for fulfilling event objectives were created to reward owners of Avatars and LAND, as outlined below.

• Shared pool for all users – 100,000 SAND
• Avatar pool for Avatar owners – 200,000 SAND
• LAND pool for LAND owners – 300,000 SAND

To celebrate the release of the The Woo Young-Woo avatar collection (inspired by memorable outfits and scenes from the show) by the Netflix show Extraordinary Attorney Woo on October 26 and Captain Laserhawk avatar collection by Ubisoft on December 7, The Sandbox hosted 2 separate events with exclusive in-game experiences for the avatar owners to win SAND rewards.

The Sandbox also hosted its first “transformation event” on November 21 to celebrate the 65th Anniversary of the Smurfs franchise. During the event, players could transform their avatar into a Smurf character with a burnable token and win SAND based on the completion of various quests.

On December 4, The Sandbox launched the Hungama World experience, a project from India bringing Bollywood culture into the metaverse.

Finally, The Sandbox celebrated the holiday season with the “Season’s Greetings” event, which took place from December 11 to January 22. Similar to the FallO’ween Event, Season’s Greetings took place across The Sandbox metaverse with over 60 different experiences utilizing a similar reward pool structure to the FallO’ween Event.

Updates and Roadmap

The Sandbox releases a series of new upgrades and features in Q4:

• LAND Ignition Initiative – The Sandbox purchased 111 LAND parcels on secondary markets in October. These LAND parcels will be made available to The Sandbox’s creator community.
• Open Metaverse – At The Sandbox’s Global Creator Day, it was announced that The Sandbox metaverse was open to all creators. Any LAND owner can now instantly publish experiences and user-generated content to The Sandbox.   
• The Game Maker Fund – An initiative by The Sandbox to support game and digital experience developers. On November 2, The Sandbox announced that it would be replenishing the fund with 100 million SAND in 2024.
• Game Client & Game Maker 0.9 – 0.9 was The Sandbox’s latest update, released in early December. The release brought several major updates to The Sandbox. New gameplay features, such as Puzzles, Loot, and Chance, were introduced to The Sandbox. Core gameplay mechanics were also improved, allowing for a smoother player experience. Additionally, the update focused on improving the social experience of The Sandbox by implementing new ways for players to chat, connect, and interact with one another. A full list of changes and new features from the update can be found here.
• CATALYSTS – The Sandbox launched a new item, CATALYSTS, on December 10. CATALYSTS are ERC-1155 tokens on Polygon that can be used to mint ASSETS on The Sandbox. There are five different tiers of CATALYSTS according to the exclusivity or rarity of an asset.
• The Sandbox Marketplace – The Sandbox launched an NFT marketplace on Polygon in December. The marketplace provides a venue for creators and players to buy and sell NFTs on The Sandbox. platform.

Creator Royalties Update – In December, The Sandbox announced that all secondary NFT sales on The Sandbox Marketplace would be subject to a 5% royalty fee, with the fee being split 50/50 amongst The Sandbox and the original creator of the NFT.

LAND Sales

The Sandbox conducted two major LAND sales in Q4 2023. The first was the Cinerama LAND Sale in November. In total, 414 regular LANDs and 73 premium LANDs were included in the sale. The raffle for the waitlist opened on November 9, and the sale took place from November 23 to 27. The second land sale was the BharatVerse LAND Sale in December. In total, 199 LAND parcels were included in the sale. The raffle for the waitlist opened on December 5, and the sale took place from December 15 to 18.

Closing Summary

The Sandbox had a bounce-back quarter in Q4 with the SAND market cap rallying to $1.2 billion (up 89% QoQ). Additionally, new partnerships and ASSET collections, such as the Captain Laserhawk: A Blood Dragon Remix, Extraordinary Attorney Woo, and THE NOTORIOUS B.I.G. Big Poppa collections, helped bring about a surge in non-LAND activity.

Daily average active non-LAND buyers (up from 109 to 189), non-LAND mints (up from 9,100 to 30,200), daily average secondary sales (up from 64 to 176), and daily average secondary sale volume (up from $1,900 to $3,400) all saw double-digit plus percentage gains in Q4. With the bear market seemingly in the rearview mirror, The Sandbox aims to build off its Q4 performance and continue to onboard more users to Web3 gaming through its immersive metaverse experiences.