SIP-39: Pausing The Sandbox DAO

[Cyril]

TL;DR

What	SIP-39 pauses The Sandbox DAO: no new SIP intake, no new funding decisions, and a shift to minimum-maintenance mode to preserve assets and remain compliant.
Why	The Sandbox is entering a new phase with The Sandbox 3.0, and this pause creates space to reassess the DAO’s purpose and operating model before taking on any new commitments.
How	The pause is implemented via a formal SIP and vote. Responsibilities for finance, assets, and contracts transition to The Sandbox team. Active SIPs continue through the end of Q1 2026 where applicable; SIP-26, SIP-33, and SIP-36 are terminated/cancelled.
When	Effective date: 25th of February 2026 (once SIP-39 is live / passes) - Transition period: until 31 March 2026 - Dormant mode: from 1 April 2026
Who	The Sandbox (in coordination with The Sandbox Foundation) implemented by The Sandbox and The Sandbox Foundation, with support from the DAO Administrator through 31 March 2026

SIP Details

Problem Description

Since its inauguration in May 2024, The Sandbox DAO has:

• Built a community of thousands of members, authors and voters, from more than 20 countries, to allocate SAND in support of The Sandbox ecosystem;
• Distributed more than 3m SAND across 38 SIPs;
• Generated 8k forum posts and 500 threads.
• Experimented with community governance and decentralised decision-making.
  However over that same time period we have identified the following challenges:
• The Sandbox ecosystem is rapidly evolving and the type of initiatives supported by the DAO is not clearly aligned with those changes.
• With operating costs invoiced in USD/EUR, the decline in SAND price means the DAO must sell/spend more SAND to cover the same fixed costs, making the current operating model materially more expensive.
  Continuing operations without an updated mandate risks further misalignment and value leakage; pausing creates space to reassess how the DAO can best serve the community and ecosystem.

Solution Proposed

For the purpose of this SIP, “paused DAO” means:

1. No new funding SIPs: No new grant SIPs or budget SIPs will be accepted, curated or put to vote.

2. Existing SIPs:

• SIPs with signed contracts and/ or remaining obligations will be:
  • either executed to completion; or
  • terminated in accordance with the relevant contract terms where a contract exists (e.g., notice period / pro-rata settlement where applicable).
• SIPs without contracts and not yet started will be reviewed and closed where applicable during the transition period.
• Authors of the affected SIPs will be contacted directly by email during the transition period with a clear status outcome (continue through Q1 2026 or terminate/cancel) and the next operational steps.
• A consolidated status table will document outcomes SIP-by-SIP.

3. Governance bodies

• No new governance initiatives (e.g., special council, advisory board or delegate elections, new mandates).
• Existing governance bodies will be discontinued or moved into a dormant role with no active mandate, unless explicitly reactivated by a future SIP.
• Transition operations to The Sandbox team
  • Administrative activities will be transitioned to The Sandbox and reduced to the minimum required to preserve The Sandbox Foundation’s assets and for it to remain compliant.
  • As part of this transition, Arasakio will progressively hand over operational access for
    • finance and asset tooling, including custody and banking and payment;
    • accounting and reporting workflows, including subledger replacement plans;
    • governance tools and infrastructure (Snapshot admin, website, forum, DNS, etc.),
  • Arasakio will no longer act as DAO Administrator starting 31 March 2026. Arasakio will support the handover through that date

SIP Impact

If SIP-39 is approved, the following applies:

• DAO activities pause (no new SIP intake, no new programmes).
• Existing SIPs are handled per the rules above (continue through Q1 2026 where applicable; terminate/cancel SIP-26, SIP-33, SIP-36).
• Responsibilities transition to The Sandbox team; Arasakio provides handover support through 31 March 2026.

Benefit to The Sandbox Ecosystem

Time and Space to Align with The Sandbox 3.0 Vision
The Sandbox ecosystem is entering a new phase with The Sandbox 3.0 and a pause allows the DAO to reassess its purpose, structure, and tooling in light of where the platform is heading. Thus, any future activity can be designed to meaningfully support creators, players, and builders in the context of the updated product vision.

Avoidance of Rushed or Misaligned Funding Decisions
By halting new SIP intake and funding decisions, the DAO avoids committing resources to initiatives that may no longer fit the evolving ecosystem. This reduces the risk of funding projects that struggle to deliver impact or become obsolete shortly after approval.

Responsible Wind-Down of Existing Commitments
SIP-39 provides a structured approach to handling existing SIPs - allowing contracted or in-progress initiatives to complete where appropriate, while responsibly winding down others according to their terms. This avoids abrupt disruption while still prioritizing clear scope and controlled commitments..

Preservation of Community Assets & Treasury Value
Pausing SIP intake and DAO operations reduces the DAO’s operational footprint. By limiting activity to only what is required for compliance and asset stewardship, more of the DAO’s remaining resources are preserved for future use rather than consumed by ongoing operations.

Risk analysis

Risk	Why	Mitigation
Confusion for the community	DAO pause and SIP terminations may be perceived as de-prioritization or “closing” the DAO.	Communicate scope clearly, publish consolidated SIP status table, run one structured AMA
Contractual disputes	Any termination of existing contracts can create legal risk	If applicable, follow contract notice terms and document pro-rata close-out; direct outreach to affected authors
Operational risk during transition	Access, custody, banking, accounting tooling changes	Structured handover plan through 31 March 2026; minimum tools retained where needed
Fragmented narrative across channels	Conflicting statements amplify backlash	Single forum thread as source of truth and limited spokespeople

Budget requested

44,400 USD.
Cost of maintaining the DAO assets by The Sandbox team for 1 year (expiring 25th February 2027). This will be supported by a specific service agreement between the foundation and The Sandbox.

Implementation Plan

Milestones	How do we measure success?	Deliverables	Expected completion date
1. Freeze new SIP intake	No new SIPs accepted/processed after SIP-39 passes	Update SIP intake guidance + Forum notice stating SIP submissions are paused	Immediately after vote concludes
2. Publish consolidated SIP status view	Single, shared reference for SIP status and next steps	Consolidated SIP status table published on Forum (SIP #, status, contract Y/N, payments, decision)	Immediately after vote concludes
3. Terminate SIP-26 / SIP-33 / SIP-36 decisions	Decisions implemented cleanly and documented	SIP-26 termination notice and close-out plan; SIP-33 and SIP-36 closed/cancelled before start (documented)	By Feb-Mar 2026 (in line with contract terms)
4. Operational handover to The Sandbox	The Sandbox has access and can operate	Access transfer checklist completed	By 31 March 2026
5. Comms and channel posture	Single source of truth and limited comms footprint	Forum post, one structured AMA, and final summary of what changes/does not change	March 2026
6. Dormant DAO begins	DAO operations paused as defined in SIP-39	Confirmation post: pause mode active; no new SIPs; operations handled by The Sandbox starting from 1 April 2026	1 April 2026

Team / Author Background

• The Sandbox (in coordination with The Sandbox Foundation)
• Implemented by: The Sandbox and The Sandbox Foundation, with handover support from the DAO Administrator through 31 March 2026

Voting Options

• Yes – Approve SIP-39 and pause the DAO as described
• No – Reject SIP-39
• Abstain

Alternatives Considered

• Reduce scope without pausing (lighter adjustments)
• Continue DAO operations at reduced budget without formal pause
• Full wind-down / liquidation of The Sandbox Foundation (not proposed in SIP-39)

Contacts

• Primary: marketing-tsb-account@sandbox.game
• DAO Administrator (until 31 March 2026): @Cyril
• After 31 March 2026, operational inquiries should be directed to The Sandbox team.

ADDITIONALLY

Here is the status on current SIP:

The authors of SIP 26, 33 and 36 have been contacted

[Lanzer]

@Cyril

pausing creates space to reassess how the DAO can best serve the community and ecosystem.

I believe that if we continue with Special Council elections, we can have a community involved reassessment that aligns with the new direction the Sandbox is going.

My vote is to continue the DAO.

[KamiSawZe]

I have mixed feelings on this. With very little info on The Sandbox 3.0 it’s hard to see what’s in store for TSB. The Game Maker is the best it’s ever been. There are awesome new features that builders are just now figuring out how to use and realize the creative visions they’ve had for years. “3.0” is an unknown (at least to me). Is it a new engine/maker? Will anything we’ve built in VoxEdit and Game Maker work in 3.0? Should creators keep working on projects in the existing tools, or is this a waste of time that will shut down in the coming months?

Pausing the DAO feels like 3.0 will be a major shift that will render old projects useless and we should all stop building.

If Game Maker 1.0 will continue to be supported, then why pause the DAO? We can continue creating games, and use DAO funding to advertise and reacquire players.

As I write this, according to the Metaverse chat in the Game Client, there are only 4 players online at the moment. I think the DAO could work with TSB on activating players, and focusing on fun play and community over P2E which has seen almost everyone scatter as the money dries up.

Of course my motivations are somewhat self serving. I was looking forward to running for a Special Council seat and doing everything in my power to show the world the fun I’ve had in this game if elected. But as a LAND owner, former staff, ambassador, creator, and studio founder, I’m only winning if The Sandbox is winning too.

So my vote is on the fence. I want to know more about 3.0 and if it’s worth waiting for, or if there is still good work to be done here and now. I don’t want to see the DAO pausing further drain momentum from TSB.

[yuelwolf]

Without a doubt, it’s a very difficult decision, and I strongly share @KamiSawZe sentiment. In our case, we are already preparing the final deliveries for Chrysalis Quest. It is no secret that The Sandbox is implementing rapid changes across the board, forcing projects to constantly re-evaluate how to function best within the ecosystem without compromising their initial planning.

As a studio, we decided to stop developing games for the Game Maker, given the lack of clarity regarding the future of the tools and monetization channels for creators—something that could easily change with a single roadmap update this year.

I agree that the DAO should currently serve as a funding tool for high-quality user acquisition and the creation of games, tools, and experiences that maximize brand recognition in the gaming market. Looking at recent examples like Hytale, our studio feels a deep sadness because we believe The Sandbox is not far from having tools that compete with major UGC platforms; however, that might mean giving up technologies like NFTs to find a place among Web2 audiences who solely seek entertainment.

With the recent launches of SandChain, Corners, and upcoming products that don’t seem actively linked to the gaming ecosystem, we see with deep concern what appears to be a deliberate strategy to gradually move away from the creator ecosystem in search of new markets. While not necessarily bad, I believe this would invalidate almost all the proposals we have worked on since the DAO’s inception.

With that said, I believe it is fundamental to bring more information regarding the future of The Sandbox to the table to make an informed decision. Relying on launch speculations and tweets is not enough for such a critical move.

[Lanzer]

@KamiSawZe

I don’t want to see the DAO pausing further drain momentum from TSB.

I agree wholeheartedly.

And as a bonus: I think a community-elected Special Council would facilitate the needed insight into Sandbox 3.0, and the community would feel like it’s following along and more supportive.

[Victoran]

We’ve come too far to call this a “pause” or anything close to it.

The Sandbox DAO has delivered tangible outcomes. It didn’t exist in theory, it funded builders, supported creators, and restored confidence in a community that previously felt unheard. A structure that has produced real value should not simply fade into dormancy.

Historically, communication between TSB and its community has been weak. During SDG 0.1 last year, the volume of negative feedback made one thing clear: many players and supporters felt ignored. After looking deeper, those concerns weren’t unfounded.

The DAO changed that narrative. It brought structure, accountability, and most importantly, hope. Builders and creators finally had a pathway to be heard, supported, and followed up with real resources. That impact should not be understated.

Pausing the DAO risks undoing that progress. Ecosystems don’t thrive by stepping away from their most functional feedback and coordination layer, they evolve by improving it.

For that reason, I am voting NO.
The Sandbox DAO should remain active and be iterated on, not paused.

[shont]

I vote YES on SIP-39. We cannot afford to wait until the end of the quarter; we must stop immediately upon the vote. A DAO has no meaning when The Sandbox platform itself is not functioning properly. It makes no sense to play government without any citizens (users). We must immediately halt all inefficiencies and prioritize reviving The Sandbox first. Let’s normalize the platform and win the survival battle. Only then can we rebuild a truly meaningful DAO that fits The Sandbox. Now is the time to go all-in on a turnaround for survival

[sebga]

At first, I was leaning toward voting Yes, in favor of a pause. However, now that I see the pause would last one full year, it feels excessive. To me, that only suggests one thing: the end of the DAO. I may be wrong, but I’m concerned this could simply be a way to quietly make the DAO fade away. Animoca might be uncomfortable dealing with it

Have you ever seen a DAO truly function within an Animoca project? I’m far from knowing everything — Animoca Brands is huge — but among the projects I follow, none really have an active DAO, or if they do, it’s never actually been used.

The idea of “forcing” a shutdown raises many unanswered questions. On one hand, I want to give the team the opportunity to do things properly. On the other hand, I share the concerns raised by KamiSawZe regarding builders, creators, and studios. As long as we don’t have more clarity, it’s difficult to plan ahead, adjust our position, or decide where to focus our efforts.

I also agree with Victoran’s point about how difficult it is to build a strong relationship of trust with users. I would support a temporary halt to funding while the DAO is restructured, if needed — but a full year-long shutdown feels more like being sidelined entirely.

Honestly, I’m not sure what the right move is. I understand Shont’s point, and it does make sense — there’s little value in forcing things if the product isn’t ready.

In that context, and given that Animoca Brands has no obligation other than a moral one to maintain the DAO, we don’t really have much choice but to follow the direction being taken.

That said, regardless of the outcome of the vote, there’s one thing I believe should absolutely be put on the table: a clear, simple, and detailed report of the funds distributed and the return on investment. A straightforward comparison — promises versus reality.

[Daddy_muphasa]

My vote is to continue the DAO

[DAO]

Hey everyone, its been a minute since I’ve posted to share any thoughts.

Quite frankly, the last major retrenchment of staff was the final nail in the coffin for me and I suspect many others. I’ve lost the community that we have over here in Singapore, as well as many globally that I’ve met over the course of the 3 years i’m here. I’ve stopped building on the GM ever since, and have ever only peeked into TSB’s main page once awhile to see if life still exists there. I’m still in the metaverse though, mainly playing UGC games on Roblox(brainrot games are a thing there, it seems the kids have learnt to embrace that term and turn it into a meme) and tbh I feel both pity and sadness that TSB could have been the Roblox in the crypto space. The expectation was never for TSB to overtake Roblox, but to be a force to be reckoned with. I believe many of us hoped for this.

My suspicion is that once the DAO closes, it’ll likely never reopen. It was a failed experiment, but it didnt fail because of the team running it, or the participants. It failed because the main organisation failed, that management(now ex) failed. Leadership of that (ex)management failed. Direction was a haze, promises were broken, transparency only started being slightly visible at the very end.

As much as it breaks my(and everyone’s) heart to say this, I think its a good idea to return the DAO to TSB. We don’t know what their plans are, and if it’ll ever sync to the DAO. If their decision is to change course, then we(the delegates and everyone that has participated in the TSB we knew) are no longer in familiar grounds, let alone subject matter experts, making us redundant.

Allow new management to decide on the direction of the organisation, and then we decide if we want to stay.

I do hope they stay the course on TSB the metaverse but its anyone’s guess at this point. S7 is coming but what happens after, I doubt we’ll have clarity anytime soon.

[sanctum]

I am very interested in knowing what TSB has decided for 2026.A clear roadmap will help creators and players

[Lanzer]

The Sandbox roadmap went offline. It now shows as private

[Lanzer]

@DAO

My suspicion is that once the DAO closes, it’ll likely never reopen.

@DAO

transparency only started being slightly visible at the very end.

I have the same suspicion. I don’t want to pause the DAO for that reason. I think the DAO is positioned to evolve with the Sandbox 3.0, rather than being bystanders. If we’re plugged in through the Special Council, Sandbox will benefit from our willingness to help.

I think Yuga Labs badly misstepped when they paused the ApeCoin DAO. They’ve been struggling with participation ever since, and it traces back to the loss of attention and ownership of a community who no longer have a reason to engage in the Yuga ecosystem every day.

@DAO

Allow new management to decide on the direction of the organisation, and then we decide if we want to stay.

It’s my hope that Robby (new Sandbox CEO) is being advised by people who understand the DAO’s ability to produce results (SDGP, NFT collection, DAO Education Hub, Magic Palette).

My opinion…it’s a win-win for Sandbox to allow Special Council reelections to go forward. I’m seeing this first-hand in Star Atlas DAO. Their DAO Council accomplished 149 ecosystem-impacting tasks over 9 months, and hosted 37 public meetings with an average 11 discord attendees and 15 stream viewers. That’s with a game that has 1K MAU (monthly active users). Sandbox has somewhere between 20-60K (per ChatGPT).

Full disclosure: I’m on the Star Atlas DAO Council.

[hishmad]

I’m invested in Sandbox and believe in decentralized governance done right.

Though restarting a DAO after a hiatus is no small feat, we’ve reached a point where a pause is essential . As an entrepreneur, I believe the most strategic move right now is to safeguard the remaining resources by suspending activity as proposed.

I will be voting in favor of the proposal.

[Biversen]

TSB is currently undergoing a serious downsizing. It is felt in every field. Staff reductions. Closure of country representative offices. Even reducing the number of Honorable mentions in Game Jams.

It’s no surprise that DAO has been discontinued.

TSB has few players. Creators can’t make a profit. Support is not enough. The policy of the former administration If it is Already obvious. Transparency far away IP focused and development very slow. (Every sense)

While the development tools are better than before, they are the worst compared to the competitors. Constant crashes Different and chronic bugs in every version, many feature Lack of etc…

When we look at the last 5 years, Game Maker should be better than many game engines, but the fact that this has not been achieved is a big failure.

It’s normal for creators to decide to do nothing.

DAO’s community interaction and what they do contributes to attracting people, but the player base is already limited which is one in the field insufficient and the new administration wants to solve many problems quickly with a scalpel instead of a dressing. But this DAO’s not a mistake. It’s the TSB’s UGC focused from not being able to move forward origin.

The new management wants to solve many problems quickly with a scalpel instead of bandages. It wants to get rid of everything that will burden the budget without setting a new direction.

Frankly, I think the same thing. I think we should look at the issue economically rather than emotionally.

TSB is more than a sick man as it seems from the outside. Unless he is operated on, he is unlikely to survive.

What will be the new road map? Will the programs and system change? Will the system be left to die slowly and become one of the failed projects? I don’t know. But if the company is using the scalpel so quickly, the situation is not very good.

In short, even though I am undecided, the Yes side outweighs the current situation.

[Lanzer]

@hishmad

safeguard the remaining resources

I did a little calculation of all the SIPs and screenshotted it below. Looks like of the $6.8M USDC we’ve received, spent $2.3M across 38 SIP and $4.4M USDC remains.

I think we can safely involve the DAO for less than $200K USDC, and this is nothing to our remaining budget of $4.4M. I think it’s worth continuing the DAO.

[hishmad]

Hi @Lanzer

I appreciate that perspective. To clarify my understanding of our origins: is the $6.8M USD from The Sandbox structured as a grant or an accountable debt?

Furthermore, I’m a big advocate for voluntary governance. If there is an appetite for a non-paid HR/management structure, I’d like to volunteer my time. I’m sure there are others in the community who would be willing to join me in a pro bono capacity.

[ixura]

I think we need more information before deciding which route we’re going to take. We’re definitely missing a lot of details right now. This AMA should clarify a lot, and after it, we’ll have a much better position to decide
TSB just announced it via X

The Sandbox

[Lanzer]

@hishmad

is the $6.8M USD from The Sandbox structured as a grant or an accountable debt?

I’m not sure. The 15,5M SAND was the amount given to the DAO in SIP-3, converted to $6.8M at an exchange rate of $0.44 back in June 2024.

TSB just announced it via X

Nice! Looking forward to this. I posted my calculations there too.

[hishmad]

@Lanzer

’m not sure. The 15,5M SAND was the amount given to the DAO in SIP-3, converted to $6.8M at an exchange rate of $0.44 back in June 2024.

To ensure we are on the right track, it would be helpful to revisit the documentation for the initial $6.8 million funding. Clarifying whether this was an unconditional grant or a loan with specific obligations will help define our next steps.

While an unconditional grant allows for total independence, a conditional agreement means we must be diligent in respecting The Sandbox’s intended direction.