21 August 2020
Founder’s letter regarding The Sandbox and SAND sale
Dear Shareholders and friends of Animoca Brands,
A little under 2 years ago Animoca Brands acquired a deeply talented team who shared our vision that the adoption of blockchain is going to trigger a new content revolution, one that may be as significant as the rise of the Internet - please see this Medium post explaining my views on this opportunity. The company we acquired - Pixowl - was seeking support to create a user generated content game, similar to Minecraft and Roblox (two of the most successful user generated games of all time), but with true digital ownership and real property rights validated through blockchain.
This project would come to be known as The Sandbox, a user generated content game ecosystem and virtual world that will deliver true digital ownership in the form of non-fungible tokens (NFTs)
Earlier this month, we announced that The Sandbox would be listing its utility token SAND on Binance, one of the largest crypto exchanges in the world (such exchanges allow users to trade cryptographic tokens for other assets, including fiat currencies). This initial exchange offering, or IEO, was successful, raising US$3 million via the sale of 360 million SAND tokens (12% of the total supply of SAND) to Binance users at US$0.008333 per token.
After an initial lottery period (refer to this summary) that Binance utilized to establish allocation of the 360 million SAND tokens to interested buyers, SAND began trading on Binance on 14 August 2020 at 9pm HKT. Over the first 24 hours, Binance users traded over US$140 million worth of SAND tokens. SAND currently has a price ranging between US$0.05 and 0.07, which represents an increase of approximately +600% from the opening sale price of US$0.008333.
What does all of this actually mean for shareholders of Animoca Brands?
Before we begin to break this down into information more easily digestible by a non-crypto audience, please refer to this helpful Binance research page which provides key token metrics on SAND and has a whitepaper for The Sandbox. You can also check trading statistics for SAND on CoinMarketCap.
It is important to remember that the total supply of 3 billion SAND tokens is the maximum number of tokens that will ever be available and these tokens are, effectively, already issued even if they are not all yet in circulation. Sites like CoinMarketCap are very informational, but only provide the value of the circulated supply of a token, not the value of the total supply. To calculate the market capitalisation of SAND tokens, we multiply the current price per token by the total supply of tokens. Therefore, a per-token price of US$0.052173 x 3,000,000,000 issued tokens would imply a SAND a token market cap of US$156,519,000.
Another thing to understand is that total volume SAND traded is calculated through the aggregate of volume traded for multiple trading pairs, rather than a single pair. In typical exchanges, you have just one trading pair (for example: number of shares/Dollars, or Dollars/Euros) but in crypto exchanges you can pair between different crypto currencies. SAND is paired with BNB (Binance Coin) and BTC (Bitcoin) as well as USDT (Tether) and BUSD (Binance USD); the latter two are stablecoins - a type of cryptocurrency pegged to a fiat currency (which is US$ in both cases). Should SAND list on other crypto exchanges, it could form additional trading pairs in the future.
The volume traded in one pair (e.g., SAND/BNB) is not strictly the same as the volume traded in another pair (e.g., SAND/USDT). The aggregate volume is comprised of all trading pairs combined.
Below are the official links to all the SAND trading pairs:
https://www.binance.com/en/trade/SAND_BTC
https://www.binance.com/en/trade/SAND_BUSD
https://www.binance.com/en/trade/SAND_BNB
https://www.binance.com/en/trade/SAND_USDT
It is important to note that this is still just the beginning of The Sandbox project and that the full launch is not scheduled until later in the year. This complex and ambitious project requires ongoing investment and has the potential to generate additional revenue and/or capital from future sales of both SAND tokens as well as LAND tokens (e.g., see our announcements about the second and third LAND presales).
The SAND IEO brought a lot of attention worldwide to The Sandbox. Overnight, our Twitter account for The Sandbox doubled in followers, and conversation and activity about the project has substantially increased on Twitter, Discord, and Telegram.
The Sandbox, of which Animoca Brands is the majority owner, is one of our most important projects and a key step to fulfil our vision and mission to deliver true property rights to gamers. We are excited about its development and see this as a general blueprint for a number of our future projects, including for our subsidiaries and portfolio companies. What began as nothing more than a bold vision, and in some ways is still an unproven theory, is solidifying very nicely into reality.
The SAND IEO and the open trading of SAND allow us to gain a better indication of the value of The Sandbox. One of the challenges for private unlisted companies like The Sandbox is establishing how much the company is actually worth. There are a number of mechanisms to calculate value, but they are rarely straightforward. The IEO, however, has given shareholders a way to better understand the value and importance of The Sandbox to Animoca Brands.
As we continue to trailblaze new ground and help usher in the bright new future of gaming, I remain deeply grateful for the support, vision, and dedication of our shareholders, partners, and employees, who have made it possible for Animoca Brands to become a globally recognized pioneer. Thank you.
Yat Siu
Co-founder and Chairman
Animoca Brands