Decentralized gaming platform, The Sandbox is set to perform a SAND token release worth $133.86 million. According to data from TokenUnlocksSandbox will release 332.55 million SAND tokens on August 14, representing 16.16% of the token’s maximum supply.
New SAND Tokens in 2023 to Surge Over 700 Million
With the upcoming SAND release, the total number of new SAND tokens is expected to rise to 705.3 million by 2023. This latest unlock will be added to the 372.75 million SAND previously released 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 development team, project advisors, strategic and seed investors, and the project reserve.
SAND acts as the utility token of the Sandbox metaverse and serves as the platform’s payment medium and governance token. By design, SAND is expected to undergo token unlocking every six months through 2025.
Currently, the number of circulating SAND tokens is 2.05 billion, representing 68.6% of the total supply of SAND. With the expected release on August 14, these numbers are expected to rise to 2.39 billion and 84.76%, respectively.
SAND trading at $0.40 on the daily chart | Source: SANDUSD chart on Tradingview.com
Potential impact of token release on the price of SAND
Token unlocks are common occurrences in the crypto space, usually accompanied by fears of a bearish market. This is because the sudden introduction of huge tokens into the market creates a higher supply-demand ratio, which depresses asset prices.
Looking at on-chain data, this is a likely effect of SAND’s upcoming token unlock on the market price due to declining network growth on the Sandbox platform.
Based on data from blockchain analytics company IntoTheBlockThe number of new addresses on Sandbox has dropped 66.87% in the past month, from a peak of 649 in July to the current value of 215.
The continuation of this trend means that Sandbox may not have the necessary traction to counter the upcoming inflationary pressures, which could eventually lead to a price drop.
Source: IntoTheBlock
Related Reading: Aptos (APT) gains 10% ahead of July token release
Following SAND’s last token release on February 14, SAND’s price movement has been fairly positive, opening at $0.68 to trade as low as $0.72 and closing at $0.71. In the following days, SAND would make more gains, reaching a market value of $0.88 on February 20.
While token unlocks are widely expected to generate bearish pressure, their effects are still unpredictable. Investors are advised to watch for major developments on Sandbox related to network growth and whale movements.
At the moment of writing, CoinMarketCap Data shows SAND is trading at $0.40 with a gain of 0.62% on the last day. However, the token is lower on the weekly chart, losing about 2.98% of its value.
Featured image of Binance Academy, chart from Tradingview.