The supply of SAND is forecast to increase by 16% next week.
SAND, the native token of the web3 game The Sandbox, is down 20 percent in four weeks as investors brace for a major token unlock event on August 14.
The Token Unlocks report predicts that $136 million worth of tokens will hit the market, or 16.6%, of the token's current capitalization. With 38% of the tokens earmarked for early investors, plus 11% for consultants, tokenholders are reducing their SAND exposure ahead of the unlock event. In addition to the tokens, the Sandbox's team and foundation will also receive a third of the tokens.
SAND's previous unlock event triggered a 50% drawdown in the value of the asset from February 21 through today, resulting in a 50-percent drop in the value of the asset from February 21 through today.
Token unlocks indicate when a large portion of a digital asset's supply will enter circulation, and are crucial for crypto investors.
The early access of Proof of Work mining, combined with multiple market cycles, has allowed the distribution of the supply of veterans cryptocurrencies like ETH and BTC into a wide variety of holders.
Many newer or VC-backed cryptocurrencies, however, frequentlytimes a small group of investors and team members will hold claims to outsized parts of an asset's supply. A vesting schedule that distributes these allocations, hoping to provide enough opportunities for a token to attract sufficient liquidity before early stakeholders offload their allocations.
In the lead-up to and after an early June unlock event, OP token Optimism's OP token experienced volatility, which resulted in an increase in the asset's supply by 90%. Despite the tumbling 40 percent in four weeks from mid-May, OP has since recovered by 44% and is now trading higher than at the time of the unlock.
The métaverse sector was among the most hyped trends of the 2021 bull market, before experiencing brutal drawdowns as a result of last year's bear trend.
After starting 2022 with a combined capitalization of $15B, Metaverse tokens ended the year with just $5.1B, according to CoinGecko. The metaverse market cap rebounded to $7.5B at the end of the first quarter but has since reverted to $6.9B.