Sandbox Set For $133 Million Token Unlock, A Bearish Trigger For SAND Price?

Decentralized gaming platform, The Sandbox is set to execute a SAND token release valued at $133.86 million. According to data from TokenUnlocks, Sandbox will release 332.55 million SAND tokens into circulation on August 14, representing 16.16% of the token’s maximum supply. 

With the upcoming SAND release, the total number of new SAND tokens in 2023 is expected to rise to 705.3 million. This latest unlock will add to the 372.75 million SAND released earlier during the last token unlock in February. 

Based on more data from Token Unlocks, the newly released tokens will be allocated to various parties, including the Sandbox’s development team, project advisors, strategic and seed investors, and the project’s reserve. 

SAND functions as the utility token of the Sandbox metaverse, serving as the platform’s payment medium and governance token. According to its design, SAND is expected to undergo a token unlock every six months until 2025.

Currently, the number of circulating SAND tokens is 2.05 billion, representing 68.6% of SAND’s total supply. With the projected release on August 14, these figures are expected to jump to 2.39 billion and 84.76%, respectively.

Token unlocks are common events in the crypto space, usually accompanied by fears of a bearish market. This is because the sudden introduction of massive tokens to the market creates a higher supply-to-demand ratio, which drives down asset prices. 

Looking at on-chain data, this is one likely effect of SAND’s upcoming token unlock on its market price due to declining network growth on the Sandbox platform.

Based on data from blockchain analytics firm IntoTheBlock, the number of new addresses on Sandbox is down by 66.87% in the last month, falling from a peak of 649 in July to its current value of 215. 

The continuance of this trend means Sandbox may lack the necessary traction to counter the upcoming inflationary pressure, which may ultimately lead to a fall in price.

Related Reading: Aptos (APT) Gains By 10% Ahead Of July Token Release

Following SAND’s last token release on February 14, SAND’s price movement was fairly positive, opening at $0.68 to trade as high as $0.72 and close at $0.71. In the subsequent days, SAND would record more gains, reaching a market value of $0.88 on Feb 20. 

While token unlocks are widely expected to precipitate bearish pressure, their effects are still unpredictable. Investors are advised to watch out for major developments on Sandbox regarding network growth and whale movement.

At the time of writing, CoinMarketCap data shows that SAND is trading at $0.40 with a 0.62% gain on the last day. However, the token is down on the weekly chart losing about 2.98% of its value.