Sandbox Vs Decentraland: The Developing Metaverse

If you haven’t read Earnest Cline’s Ready Player One, do it (skip the movie).

The novel envisions a 2040s dystopia with humanity suffering through a near-complete ecological and civilizational collapse. To cope, most humans spend most of their time plugged into the OASIS, a fully immersive metaverse with nearly endless opportunities for socialization, work, entertainment, education, adventure, and competition.

Source: The New Yorker, Ready Player One

One of the book’s thematic conflicts centers on who should have ultimate control of this metaverse. Will humanity collectively own and govern OASIS or will it be the property of Innovative Online Industries, a multinational corporation. Ready Player One is a fantastic primer for understanding both what technologists are currently developing and the importance of thoughtful considerations with regard to ownership and control of the internet.

In this article, we will analyze and compare the two largest metaverses on the market – Sandbox and decentraland. The odds are decent that one day either one or both develop into fully immersive experiences similar to the OASIS. If this occurs, early investors will be duly compensated. I’m optimistic but rooting against the dystopian backdrop.

What is the Metaverse?

The metaverse is the idea of a fully immersive digital reality that simulates physical reality. In the metaverse, users would be able to communicate, form relationships, engage in commerce, play games, compete, learn, create, and have adventures.

The Similarities: Sandbox vs Decentraland

Decentraland and Sandbox are virtual worlds that in many ways represent the physical world. Users in both represent themselves with customizable 3D avatars and can engage in peer-to-peer communication, explore the ever-evolving landscapes, play games, compete, create, and engage in digital commerce.

Decentraland and Sandbox are Web3 metaverses powered by the Ethereum blockchain. Users can take ownership stakes of both platforms through purchasing virtual land plots, creating, owning, and trading unique user-created content, games, and businesses, and by investing in the platforms’ utility tokens. Ownership of these digital assets is verifiable on-chain via tokenization and NFTs.

Scarce land is key to the economics of both metaverses. Users can own, rent, and trade a limited supply of virtual land plots, and land owners enjoy near free reign when it comes to design and customization. User-created experiences, games, or applications must be hosted on a particular land plot where they can be monetized. Landowners can host their content or rent out their land for other creators to host their experiences.

Decentraland and Sandbox were launched in 2017 and 2021, respectively. Decentraland is currently the largest metaverse with a market cap of $1.94 billion, with Sandbox being a close runner-up at a $1.78 billion market cap.

Both metaverses are financially backed and partnered with some heavy-hitters. Decentraland has received investments from or made partnerships with FBG Capital, CoinFund, Digital Currency Group, Cyberpunk, Polygon, Samsung, and the South Korean Government. Sandbox has done the same with SoftBank, Adidas, Binance, Snoop Dogg, Atari, and CryptoKitties.

The Differences: Sandbox vs Decentraland

Central Themes
- Decentraland is an attempt to recreate the physical world into the digital, albeit with fewer boundaries. Decentraland places a particular focus on land ownership. In Decentraland, owners utilize in-game builder tools or external software development kits to create almost anything capable of being conceived on their land.
- Sandbox is focused more as a gaming metaverse. Sandbox allows users to create, host, and monetize unique games for others to play.

Decentralization
- True to its name, Decentraland is a fully decentralized blockchain platform and is governed by a decentralized autonomous organization (DAO). Thus, a global network of Decentraland users collectively own and govern the metaverse.
- Sandbox is a more centralized network owned by its developer, Pixowl Inc. Sandbox did launch a DAO in 2022 which apparently allows users to participate in major decisions with regard to the platform.
Roadmap
- Decentraland does not have a clear roadmap. This is likely because the platform is governed by a DAO.
- Sandbox has a clear roadmap. This is due to the platform being owned and operated by a private company.
Graphics
- Decentraland has older, blockier graphics, similar to Minecraft.
- Sandbox features cleaner, more modern graphics.
Tokenomics
- Decentraland
  - Uses three tokens, MANA, LAND, and WEAR.
  - MANA is an ERC-20 token that is used to exchange virtual goods and services. It is also the platform’s utility and governance token.
  - MANA has a current circulating supply of 1.85 billion tokens out of a total supply of 2.19 billion. MANA’s scarcity grows over time because MANA is burned when used to purchase LAND. Additionally, all market transactions require a 2.5% MANA burn fee.
  - The MANA token allocation is as follows: ICO (40%), Community incentives (20%), Development team and early contributors (20%), and Decentraland allocation (20%).
  - LAND and WEAR are NFTs that prove ownership of the Decentraland’s virtual land plots and wearable items, respectively. Both are technically classified as ERC-721 tokens. Users can trade both on Decentraland’s open marketplace.
  - Ownership of MANA and LAND is required to be part of the governing DAO.
- Sandbox
  - Uses four main tokens: SAND, ASSETS, LANDS, and GAMES.
  - SAND, an ERC-20 token, is used for all transactions on the platform. Users must spend SAND to buy land, build and play games, and for trading user-created digital items. SAND is also used as the DAO’s governance token.
  - SAND has a circulating supply of 1.35 billion tokens out of a max supply of 3 billion. Thus, only 45% of the tokens have been minted. The platform charges an average 5% SAND transaction fee for purchases. This revenue is then split 50/50, with half going to the Sandbox Foundation which is tasked with helping grow the platform. The other half is used to pay out staking rewards.
  - ASSETS and LANDS, ERC-1155 and ERC-721 tokens respectively, are NFTs that represent the ownership of digital items and land plots in the Sandbox metaverse.
  - GAMES, classified as ERC-1155 tokens, represent user-created gaming experiences in the metaverse. ASSETS and game programming must be used together to create a GAME. For a game to go live, it must be coupled with a land plot.

Quick & Dirty Decentraland vs. Sandbox Comparison
	Decentraland	Sandbox
Primary Token Price	$1.05	$1.32
Market Cap / Rank	$1.94B / #35	$1.78B / #37
Fully Diluted Market Cap	$2.3B	$3.9B
Primary Token Circulating Supply	1.85B	1.35B
Total / Max Supply	2.19B	3B
Circulating to Max Supply Ratio	84%	45%
Operating Blockchain	Ethereum	Ethereum
Tokens	MANA (ERC-20), LAND & WEAR (ERC-721)	SAND (ERC-20), ASSETS & GAMES (ERC-1155), & LANDS (ERC-721)
Marketplace Transaction Fees	2.5%	5%

Sandbox vs Decentraland: Four Macro Take-Aways

Decentraland looks to be geared more towards individuals interested in exploring a more decentralized, DAO lead metaverse.
Due to its organizational structure, Decentraland likely offers more privacy protections for users as compared to Sandbox.
Sandbox is likely more attractive to those for whom entertainment is the priority. With its focus on creating, hosting, and playing user-created games, combined with enhanced graphics, gamers and fun-seekers will likely flock to Sandbox.
Not financial advice, but metaverse investors will likely want to invest in both. It seems entirely plausible, given the different organizational structures, that both systems will develop to fulfill separate use-cases for the broader market.

Final Thoughts

Decentraland and Sandbox are currently the two largest Web3 metaverse platforms on the market. Each showcase relatively rudimentary digital recreations of physical reality, but they do offer users broad license to communicate, create, consume, communicate, play, and trade with each other. The two platforms are governed in fundamentally different ways, so it will be interesting to see how each develops as a consequence.

And although these systems are not yet full-fledged VR immersive realities like Ready Player One’s OASIS, it has been interesting to watch metaverse technologies develop over the past several years, after reading the novel.

Science often follows science fiction. So making small investments in these platforms now might pay generous returns five to ten years down the road.

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