The Sandbox DAO Plans to Pause Operations Due to Decline in SAND Price

The Sandbox team has initiated a discussion on proposal SIP-39, which proposes to "pause" the operations of the Sandbox DAO starting from April 1, 2026. This decision is linked to the drop in the price of the SAND token, making the current governance model more expensive, and the need to review the strategy in preparation for The Sandbox 3.0. The proposal has already been published on the DAO forum, where discussions and voting are ongoing.

According to the details of SIP-39, the "pause" of the DAO means a complete halt to new funding initiatives. New proposals for grants or budgets (SIP) will not be accepted, reviewed, or put to a vote. Existing SIPs with signed contracts or obligations will be completed to the end or terminated in accordance with the terms of the agreements. Those without contracts will be reviewed and closed during the transition period until March 31, 2026. In particular, the termination of SIP-26, SIP-33, and SIP-36 has already been announced.

The DAO's governance bodies will also be dissolved or transitioned to an inactive state. New governance initiatives will not be introduced, and administrative functions will be transferred to The Sandbox team for minimal maintenance of assets and ensuring compliance with regulations. The DAO administrator, Arasakio, will cease its role as of March 31, 2026, handing over access to financial instruments, accounting, and infrastructure.

A budget of 44,400 US dollars is proposed to support the DAO's assets for one year (until February 25, 2027), which will cover the expenses of The Sandbox team under an agreement with the foundation.

Reasons for the Pause

The Sandbox DAO, launched in May 2024, has distributed over 3 million SAND across 38 projects and engaged thousands of participants from more than 20 countries. However, the rapid evolution of The Sandbox ecosystem and the decline in SAND price (the token is currently trading below historical lows) have led to increased costs in fiat (USD/EUR). Without an updated mandate, there is a risk of misalignment with new development directions, such as The Sandbox 3.0. The pause will allow for a "re-evaluation of the purpose, structure, and tools" of the DAO, as stated in the proposal.

The discussion on the forum is ongoing in the "In Discussion" status. The community can vote on Snapshot: "Yes" (approve the pause), "No" (reject), or "Abstain." Among the comments are suggestions to continue the DAO with elections for a special council for joint re-evaluation, but currently, support for the pause for adaptation predominates.

Many DAOs, such as Synthetix or Decentraland, face similar challenges, revising models due to market volatility. If SIP-39 passes (voting every two weeks on Wednesdays at 9:00 CET), it could set a precedent for other projects in the GameFi and metaverse sectors.