SANDBOX ⌛🦜 Could Accelerate 🏴☠️☠Technically speaking we had the perfect buy-back level when sellers got exhausted:
Fundamentally STRONG:
Key Insights
Given the overall market cool off, secondary sales of digital land parcels decreased 54% but are still up 865% from Q3 2021.
Primary sales grew 23% from new parcel issuance.
The Sandbox reached 2+ million registered users upon the launch of the Alpha Season 2 gameplay in March 2022.
A gasless staking program launched on Polygon.
The Sandbox focuses on partnerships across gaming, music, entertainment, and sports engagement.
The Sandbox in a Nutshell
The Sandbox is a platform for both creating and hosting entertainment experiences in virtual worlds. In The Sandbox, anyone can create 3D assets like buildings, in-game items, and non-player characters. These assets can then be used to build diverse experiences including games, music and fashion events, social activities, quests, art exhibits, and contests. The Sandbox offers creators a set of intuitive tools that require no background in coding or in designing experiences. These tools include a 3D editor for making and animating items, a game maker for making experiences, and a game client. The Sandbox is actively working on making these tools as user-friendly as possible in order to unleash the creativity of its community. For instance, the 3D editor combines different in-game tokens to create user-generated assets.
These user-generated assets are ERC-721 non-fungible tokens that can be monetized on open markets. The Sandbox ecosystem leverages a series of tokenized gaming features including: a digital in-game currency used for purchases, monetization, and asset creation (i.e., SAND); ownable digital land within The Sandbox virtual world (LAND); a combination of LANDs to create a larger plot (ESTATE); a bundle of assets and scripting logic to create interactive experiences (GAMES); 3D virtual images created by players (ASSETS); tokens burnt to give attributes to assets (GEMS); and tokens burnt to create ASSETS (CATALYSTS). Thanks to the tradeable nature of these user-generated assets within its virtual world, The Sandbox has robust in-game economics.
In addition to owning the assets that they build, creators will be able to make experiences available on LAND parcels in The Sandbox Metaverse. The long-term goal of The Sandbox is to enable creators to build immersive experiences. The possibility to monetize LAND and in-game experiences has attracted investors to acquire LAND. The top owners of LAND include large investors in The Sandbox, such as Binance, Everyrealm, and Galaxy Interactive, as well as NFT communities such as Whale, MetaKovan, and Cyber Kongz. In addition, The Sandbox is actively forming partnerships with businesses that are willing to develop experiences within its virtual world and become early adopters. These partnerships span a suite of business verticals including gaming, music, entertainment, fashion, and lifestyle, to name a few. Partnership examples are presented in “The Sandbox Ecosystem: Notable Events” section below.
Macro Overview
There is a finite amount of Sandbox LAND — 166,464 parcels. New LAND parcels are subject to primary sales — they are sold to private entities (in partnerships) or released for sale through auctions. Notably, 65% of all the LAND parcels have already been distributed, up 2% from Q4 2021.
As the volatile Q1 2022 has come to a close, LAND secondary sales volume decreased by 54% compared to the previous quarter. To put this into perspective, the secondary sales volume in Q1 2022 is still up 865% relative to Q3 2021. This quarter's decrease is the result of the metaverse hype starting to settle down since Meta's rebrand announcement in October 2021. The market is merely finding its equilibrium, and demand for LAND remains healthy despite the buying frenzy of Q4 2021.
At the same time, relative to Q2 2021, primary LAND sales grew 23%. The subject of primary sales are LAND parcels that are newly issued and are usually either sold to partners or through auctions. Still, primary LAND sales volume ($16 million) accounted for only 12% of the marketplace LAND sales volume ($136 million) in Q1 2021.
In terms of usage, The Sandbox launched the Alpha Season 2 of its gameplay in March 2022. Notably, during this launch, The Sandbox reached 2 million registered users. Considering the launch lasted four weeks, tracking its active daily or monthly users isn’t useful at this point. Instead, unique LAND buyers may be an alternative proxy for the interest in LAND utility.
The number of monthly active LAND buyers is back to the more sustainable levels seen before Meta’s announcement in late October 2021. This poses the question of what drives the value of digital land in The Sandbox virtual world, given that only a limited number of its users are currently being able to host and monetize experiences.
In our previous quarterly report, an in-depth analysis uncovered that LAND ownership is fairly concentrated, with the top owners holding onto their parcels. A follow-up question is whether this holding behavior is specific only to top owners. This quarter’s report analyzes the LAND holding time and discusses the potential implications on the value of land in virtual worlds.
Micro Overview — Holding Behavior
In an effort to understand LAND holding time, one may consider various clusters of buy & hold behavior. In this sense, one can think, for instance, of long-term buying behavior as holding onto parcels for longer than one year, while buy & sell could be described as holding periods shorter than 30 days. The current breakdown of the LAND holding time reveals that 7% of purchasers hold LAND for longer than one year, while 11% of purchasers hold LAND for less than 30 days. At the same time, the vast majority (72%) of LAND buyers hold the asset for 1–3 months.
