In an interesting development, Coindesk reported that the Metaverse platform’s Sandbox’s native currency, SAND token will undergo an unlocking period starting from Monday. A total of 332 million SAND tokens, estimated at $133 million are set to make their entry into the open market. This injection will result in flooding more than 16% of the circulating supply into the market.
While token unblocks are known to generally bearish trends with scheduled issuances for investors and insiders, this scenario also gives the token holders their first opportunity to sell their positions. An astonishing half of the tokens will be allocated to the organization and its team. Advisors to Sandbox will also receive around $15 million worth of tokens. The remaining rewards are meant for those who participated in strategic and seed sales of Sandbox token.
This interesting development takes place amidst a substantial 24-hour trading volume of $74.9 million for SAND, as reported by CoinGecko. From the recent findings of Etherscan’s block explorer, it has been learnt that as part of the unlock, 60 million SAND tokens already have been transferred out of the multi-signature Sandbox Genesis smart contract.
However, a little skepticism arises from a casual observer as to whether these transactions could potentially shock the system. Uncle Grumpy, the Sandbox Discord Ambassador, maintains that precautions have been taken to avoid any abrupt system shock.
Moreover, despite the forecasted influx, the token has seen a slight drop of 4% since the beginning of the month and has been trading close to a modest 40 cents for the past week. This disappointing performance has drawn comparisons to last year’s August airdrop that witnessed a drop of over 20% in six days following the unlock.
Uncle Grumpy, however, has a unique optimism accompanying this news. He reminded investors that the token unlock doesn’t necessarily mean all tokens will hit the market immediately. Several tokens from these unlocks are typically used for events and rewards. Therefore, it remains to be seen how this unlocking affects the token’s market impact and subsequent investor behaviour.
Source: Coindesk
