Metaverse platform The Sandbox will unlock a swathe of SAND tokens today, and prices are already falling.
On Feb. 14 The Sandbox will release another block of tokens onto the markets. Furthermore, 372.5 million SAND tokens are scheduled to be added to the circulating supply.
This represents around 12.4% of the total supply, so it is quite a sizeable chunk. At current prices, the token unlock is worth around $250 million.
The current unlocked circulating supply of SAND is 1.7 billion tokens representing around 56% of the 3 billion total. As a result, its market capitalization is $1.18 billion.
Token unlocks are designed to release locked assets into the crypto market over a set period of time. This process aims to align incentives for all stakeholders. However, it often causes short-term volatility and price dumps.
This has been the case for previous Sandbox unlocks.
Sandbox Tokenomics
On Feb. 13, ‘Lookonchain’ posted some details on the tokenomics of the Metaverse platform.
The Sandbox vesting schedule ends in February 2025, when the last of the 3 billion tokens are released. This means four more unlock events are scheduled for August, February 2024, August 2024, and February 2025.
Not including today’s unlock, another 1 billion SAND tokens will hit the market over the next two years. This could have a severe impact on prices.
Like many recent crypto projects, The Sandbox tokenomics are very team and investor-oriented. More than 40% of the tokens are slated for the team, foundation, and advisors. Additionally, more than 20% went on seed and strategic sales, and 26% is in reserve, leaving very little remaining for retail investors.
The on-chain analyst noted, “the last 2 unlocks of SAND were accompanied by a decrease in the price of SAND.” History appears to be repeating.
Price Slipping
As expected, SAND prices are in the red during the Tuesday morning Asian trading session. The token’s price has tanked 3.6% from an intraday high of around $0.70 to $0.675 at the time of press.
Furthermore, SAND has shed around 7% over the past week amid a broader market pullback.
The token unlock could result in SAND prices falling to support levels around $0.60. The Metaverse token is currently down 92% from its November 2021 peak price of $8.40.
Earlier this month, The Sandbox signed an agreement with the Saudi Arabia Digital Government Authority (DGA) on Metaverse collaboration.
Disclaimer
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