The Sandbox Allows Users to Buy Digital Property—Risks vs. Rewards

Blockchain technology is creating vast amounts of wealth-building potential. Buying digital tokens and cashing in when they gain value is the most common investment strategy. However, a growing segment of the crypto universe is digital property and assets bought through blockchains like The Sandbox (SAND).

The Sandbox is a decentralized gaming ecosystem where users can create, share, and monetize NFTs and other gaming experiences on the Ethereum blockchain. Partnering with Square Enix and Atari, its popular virtual real estate properties called “LANDs” have become central figures in the NFT world.

A LAND is a piece of digital real estate within The Sandbox metaverse. Each parcel is a unique NFT on the Ethereum blockchain that property owners can develop to earn income. For museums and art galleries, NFT owners can showcase and charge entry fees, which is perhaps the most useful application for digital art that's making waves this year.

Adjacent parcels of LAND can merge to form an ESTATE, which gives the owner an even larger area to develop. Within The Sandbox, a total of 166,464 parcels of LAND are available. Since there's a finite amount of LANDs, owners can even merge their lands and collaborate on developments.

Some high-profile LAND owners on The Sandbox are Square Enix, Atari, Rollercoaster Tycoon, Binance, Smurfs, and Deadmau5, among others. How close a property owner’s LAND is to these major figures plays a role in the gameplay. Visitor counts can be greater, which leads to higher visibility for property owner’s developments (like games and galleries) and greater income potential.

Property owners that aren’t strong in development can hire designers and artists to collaborate and create experiences jointly. Owners can also rent LAND to designers to develop and earn passive income while holding digital real estate.

LAND on The Sandbox is as volatile as any other cryptocurrency. Like the value of a single Bitcoin token is based on the intrinsic value of Bitcoin, property values on The Sandbox are tied to the value of SAND. SAND is the cryptocurrency used on the blockchain as tender throughout the metaverse.

Owning digital property is similar to owner real-world real estate. Values can fluctuate, owners can profit by selling their properties in a hot market, and they can increase their property value by developing it.

Due to factors outside of the property owner’s control, the value of the assets can drop despite the “renovations.” As a result, investors should be wary of investing in digital real estate with the intent to hold it long term.