SIP – UGC Commerce Launchpad for TSB Phygital Merch

[Another-1]

GM Sandbox fam,

This SIP proposal relates to build a Merch store platform for The Sandbox UGC creators to turn their digital assets and NFTs into real merchandising using Another-1 phygital technology.

TL;DR

Another-1 has a phygital module that works on collections created on the existing platform to connect the NFT ID with an NFC (smartchip) ID embedded in wearable or merchandising item that Another-1 produces. This works in parallel with our on-chain commerce infrastructure provider Droplinked to support selling and settling on-chain with $SAND, providing further utility to the SANDBOX community.

The general idea is to create a Phygital API that allows external collection to have the possibility to link the NFTs to a physical product integrated with the NFC hardware. This feature will then allow UGC creators and Game Studios to launch a merch collection in minutes which are linked to the in-game assets. Users can claim the physical product or purchase by paying in $SAND, Matic/Poly, USDT or Credit Card (VISA, MASTERCARD, AMEX).

Another-1 takes care of the design, manufacturing and production, NFC coding, embedding and shipping of physical products while Droplinked enables the product management, analytics, shop front displays, product tile embeddable units and checkout.

The Phygital solution will also enable UGC creators and Studios to improve the engagement of users in off-line event, using the “Flex2Earn” features available for the Another-1 NFC embedded items, a way to reward off-line engagement during conferences and events. A simple tap of the NFC by the assigned clerk triggers a blockchain transaction that rewards the wallet holding the paired NFT with $SAND or NFT airdrop.

Background and Context

Another-1 and Droplinked are working in tandem to open the access to phygital merchandising shops, to increase the adoption of NFC embedded wearables that can facilitate the onboarding of users and tracking the engagement both on-line and off-line, for a revolutionary new concept of reward and loyalty program and on-chain inventory.

The main elements that contribute to a successful implementation of the proposal are:

• Scalable Onchain Commerce: Leveraging Droplinked’s advanced commerce infrastructure for the Sandbox ecosystem;
• Security and Transparency: Utilizing blockchain technology for secure, transparent transactions and for the authentication of the products through the Digital Product Passport feature;
• Innovative Features: Incorporation of “Mint to Merch” for NFT creation on the network alongside with Another-1 powered physical merchandise;
• Broad Accessibility: Low-code and no-code tools for easy developer and user adoption;
• SMB/SME support: Providing developers, dApps and companies with inventory management records with shop tooling and commerce utility atop of the Sandbox;
• Existing off-the-shelf items: a catalogue of items available to produce with a zero-inventory and stock-management solution;
• Advanced experience in wearables and toys: a structured network of manufacturers for the production of the merchandise;
• Advanced logistic infrastructure: Capabilities in distribution and logistics to the end user.

Benefit of the solution:

Monetization for creators and companies using digital IP: tools to provide monetization for physical and digital items with immersive tools to sell and settle on-chain.

Inventory Attribution: Providing the ability to sell and settle trust-lessly whether it be for RWA assets, IP or physical inventory post production for supply chain attribution

Bridging Digital and Physical Commerce: Seamlessly integrating physical merchandise and digital goods or services with on-chain application tooling.

Ease of Use and Adoption: Simplifying the process of setting up on-chain shops in the SANDBOX to manage digital and physical assets with a portable inventory management system.

Elevate engagement: Allow users in joining off-line events with phygital merchandising and access to token-gated experience, linking the off-line interaction with in-game rewards. Creating a touch-point for a continuous interaction with the player during out-of-the-game activity.

Opportunity for the Sandbox ecosystem

Ecosystem Synergy: Our tools and features complement the SANBOX’S focus on scalability and efficiency to support the adoption of decentralized technologies for gaming, contributing to a more robust and versatile blockchain ecosystem that supports inventory management and distribution for primary and secondary sales in both the digital and physical world.

Enhancing Network Utilization and Efficiency: By bringing a diverse range of commerce activities onto the network, increasing transaction volume and network utility.

Innovative Commerce Solutions: “Mint to Merch” feature offers a unique approach to NFTs and production on-demand merchandise, potentially attracting new users and creators to the SANDBOX ecosystem.

Opportunity for the Creators:

Elevate Engagement: Providing to Creators community a tool of engagement with turning their in-game asset or NFTs into physical merchandising (free to claim or paid), through access to an existing library fully customizable.

Monetization opportunity: Create wearables and merch collection to promote the game IP and improve the community engagement.

User Retention: Trackability of user off-line interaction through the use of the phygital features of the merchandising for a personalized experience and a tailor-made reward system.

PROJECT MILESTONES

Milestone 1: SANDBOX Smart Contract Development and Integration Tools

Expected Completion Date: Weeks 1 - 2

Deliverables: Development of SANDBOX based smart contracts and an NPM library for integration.

Milestone 2: Third-party Commerce Services Integration for SANDBOX Commerce

Expected Completion Date: Weeks 3 - 5

Deliverables: Enhancement of the NPM library for third-party service integration within the SANDBOX.

KPIs: Number of third-party integrations completed, integration error rate.

Progress Measurement: Monitoring integration successes and addressing any integration errors or issues.

Milestone 3: Decentralized Inventory and Sales Management with Affiliate Tracking

Expected Completion Date: Weeks 5 - 7

Deliverables: Development of a frontend framework for a SANDBOX storefront and a DIMST system for on-chain product registration and affiliate tracking for primary goods, RWA assets and services.

Milestone 4: Phygital API

Expected Completion Date: Weeks 7-10

Deliverables: Third-party collection integration in the Phygital module, inclusion of $SAND as rewards in the Flex2Earn module.

Requested Funding Value: 135,000 SAND // $55k USDC

Development Resources: Dedicate developers for smart contract and integration tools for this development sprint.

Initial Research and Development: Conducting market analysis and technology research to adapt to the SANDBOX ecosystem.

Administrative and Operational Costs: Covering initial operational expenses including administrative or overhead costs and allocation towards any smart contract audit needed.

Four Main Milestones - Allocation of resources

Milestone 1: SANDBOX Smart Contract Development and Integration Tools = SAND 25,000

Technical Development: Costs associated with the development of the Sandbox based smart contracts and NPM library.

Quality Assurance: Resources for testing, ensuring and auditing the reliability of the deployed smart contracts and integration tools.

Documentation and Training Materials: Creation of comprehensive guides and materials for developer usage.

Milestone 2: Third-party Commerce Services Integrator = SAND 25,000

Integration Development: Expenses for enhancing the NPM library for third-party service integrations.

Partnership Management: Costs related to establishing and maintaining relationships with third-party service providers.

Testing and Optimization: Funds for rigorous testing of integrations and optimizing performance.

Milestone 3: Decentralized Inventory and Sales Management = SAND 45,000

Front-end Development: Costs for developing the user interface for SANDBOX Commerce storefronts.

Backend Infrastructure: Investment in backend systems for the DIMST system.

Delivering a SANDBOX Merch Shop website using droplinkeds infrastructure and application layer for onchain commerce, inventory rule set logic and payments.

Milestone 4: Phygital API = SAND 40,000

Backend Infrastructure: investment for integrating $SAND token as reward in the Flex2Earn module and allowing external collection to link NFT ID with NFC ID in Another-1 factory App.

[theKuntaMC]

Tagging some folks to get this conversation started…

@DAO @rocksymiguel @hishmad @KCL @sebga @moefat @meowl @mo_ezz14 @cryptodiplo @Biversen @Airvey @Oldwon @Lanzer … please, tag others where relevant

[KCL]

Hey Welcome @Another-1,

Welcome and thank you for this proposal.

I would like first to know if this SIP Ideas has been already discussed with the TSB DAO admin team or TSB itself? Is it linked to this idea that I could see in the DAO admin team books

I can see on your site, you mention the TSB is a partner and Seb Borget is one of your Advisor. Can you explain the connection between your company and TSB.

With regards to the idea itself I like very much the idea you are proposing, I will let the experts ask you questions about the technology from my side I am interested about the following:

• can you comment on the security of the NFC chips that you are using.
• what is the standard duration of the NFC chips you are using (eg is a clothe that you put in washing machine )
• can you provide a link to the catalogue of merch proposed.
• about the partnership you have with Droplinked what is the type of partnership you have a duration. What is a risk mitgation if your partnership ends.
• once the product go live how is maintenance service done and paid?
• I assume the creators will need to pay to benefit from that service what are the different package available for them?
• what are the principles of revenue sharing once the product is launched? (it will be important that you consider on tope of creator some shared part with the DAO)
• How do you plan to integrate the “shop” in TSB environment? TSB website, in game, via the new UGC platform SIP-19: Selection of The Sandbox UGC Platform Development Team - #133 by Lanzer…

[hishmad]

Hi @Another-1
Thank you for the effort you put into submitting this SIP. I generally like the idea, but I have a two questions that I would appreciate you considering.

What specific measures are in place to secure the link between NFTs and physical products via NFC chips to prevent counterfeiting or unauthorized duplication?

How does the proposed economic model (using $SAND or other payment methods) benefit both creators and consumers, and what are the fee structures for transactions, production, and shipping?

[Lanzer]

@Another-1

A simple tap of the NFC by the assigned clerk triggers a blockchain transaction that rewards the wallet holding the paired NFT with $SAND or NFT airdrop.

So if I have a piece of chest armor, I can give it to you to make it “phygital” ?

Is the Flex2Earn program going to be operational within the 155K SAND budget?

[Another-1]

@KCL

thanks for the questions and happy to dive deeper in further aspect of the proposal if need.

The SIP Idea it hasn’t been discussed with the TSB DAO, we’re still at the preliminary phase to understand the appetite of the community on the proposed feature. “The Sandbox Store: Merchandising” SIP is not part of this proposal.

Another-1 joined the incubation program (today called ZK Advancer) promoted by Brinc and Animoca Brands in late 2021, this is where we engaged Sebastien as Advisor on the NFT and gaming aspects, as he was also mentor and part of the program.

Another-1 is a land owner of a 3x3 parcel that was purchased in the early partner program in December 2021 and assigned in late 2022, and we developed an experience with our sub brand The Sneakerheadz Society (tssnft.com) (-117,86 -115,84)
Hyperia on The Sandbox: Link Here
We also worked with the team to create interoperable NFT in-game character of our TSS voxel collection.

To the question please find answer below:

• Can you comment on the security of the NFC chips that you are using.

We’re using NFC Tag424, highly secure with AES-128 encryption. The way to secure the counterfeit product is the binding of the NFC ID number with an NFT ID number through our factory app. The NFC ID number can be duplicated but won’t be possible to bind the duplicated NFC with a pre-existing NFT ID in Another-1 Phygital environment.

• what is the standard duration of the NFC chips you are using (eg is a clothes that you put in washing machine )

The NFC tags are water proof and we had a test of over 50 cycles of wash without affecting the functionality of the tag. The factory instruction from the produce mention a durability of 50 years for data retention.

• can you provide a link to the catalogue of merch proposed.

We have a catalogue for apparel and accessories Another-1 - Merchandise Catalogue 2025.pdf - Google Drive, for toys and gadget the request will be tailor-made with quantity and sampling to be provided. We’re working on expanding our inventory with 3D printed action figures in Voxel style to add to our out the shelf catalogue as well.

• about the partnership you have with Droplinked what is the type of partnership you have a duration. What is a risk mitigation if your partnership ends.

The Launchpad is created in order to be self-sufficient, with its own domain (or Sandbox) independent from Droplinked. Everything being provided for the initiative will support onchain commerce enablement for $SAND and the github repo’s will be public for use by anyone from the community. In case Droplinked interrupts the services the Launchpad can operate in complete autonomy.

• Once the product goes live how is maintenance service done and paid?

The idea is to have the subscription that UGC contributes for the use of the platform to cover for the maintenance of the platform moving forward, the total maintenance fee is not expected to exceed USD 10,000 per year for both Flex2Earn and Phygital merch. As Another-1 will be the provider of the merchandising is our interest to keep the platform up and running.

• I assume the creators will need to pay to benefit from that service. What are the different packages available for them?

Creators will be able to use the tools covered by the initiative to monetize across the SANDBOX ecosystem store, if they want to scale up independent of the Sandbox ecosystem they can do so independently on an individual business account or a subaccount. We’re working on setting packages that are for everyone pocket, currently for business our smallest package is 500 USD for 6 month subscription and 100 AN1 tag included in the package, but giving the UGC ecosystem we’re thinking to make an entry level more affordable.

The membership could be a subscription by number of collections/items or by period (yearly).

• What are the principles of revenue sharing once the product is launched? (it will be important that you consider on top of creator some shared part with the DAO)

We assume that the DAO could participate in a % of the revenues from the Sale of the products. Another-1 and Droplinked, as service provider, will not charge any % on the sales made by the Creators and the DAO can claim a percentage back into the treasury as re-contribution for when co-marketing or promotions are done to highlight them across the Sanbox community

• How do you plan to integrate the “shop” in TSB environment? TSB website, in game, via the new UGC platform SIP-19: Selection of The Sandbox UGC Platform Development Team - #133 by Lanzer…

The Idea is to integrate the Launchpad in the UGC platform as it is made mostly for the Creators. It’s important that either the asset originate from TSB marketplace or the paired digital assets are compatible with TBS environment (eg. NFT scan function), to ensure the phygital experience.

Please let us know if you need any further explanation.

[Another-1]

@hishmad

Thanks for the question, please find below our asnwers:

Q: What specific measures are in place to secure the link between NFTs and physical products via NFC chips to prevent counterfeiting or unauthorized duplication?

A: We’re using NFC Tag424, highly secure with AES-128 encryption. The way to secure the counterfeit product is the binding of the NFC ID number with an NFT ID number through our factory app. The NFC ID number can be duplicated but won’t be possible to bind the duplicated NFC with a pre-existing NFT ID in Another-1 Phygital environment. This technology is also compliant with the new regulation of the Digital Product Passport that will be adopted in the European Union starting from 2026. Furthermore we priviledge Phygital native product where we are involved in the manufacturing phase in order to avoid the “3rd party certifier” that is alwasy tricky.
The NFT once redeemd or paired cannot be transferred if not authorized, to provide a further level of security in case of secondary trading of the physical product.

Q: How does the proposed economic model (using $SAND or other payment methods) benefit both creators and consumers, and what are the fee structures for transactions, production, and shipping?

A: The possibility to use $SAND incentivizes the ecosystem (possible discount) creating more demand for the token. The availability of other methods of payment facilitates the onboarding of a wider range of users. It provides true utility to $SAND to be used on commerce railways to pay for goods and services and increase adoption and usage.

The transaction fee is contingent on whether they are paying in crypto or credit card but it is a standard fee under 2%, but regarding the production and shipping we have a catalogue with reference price Another-1 - Merchandise Catalogue 2025.pdf - Google Drive and shipping depends on the geographic area, the size and the weight of the product. Can vary from a few dollars up to 15/20 dollars. It is also important to consider possible custom duty taxes, in which case we can assist to pay on behalf of the end client.
In addition the Flex2Earn module allow to reward for off-line engagement directly in $SAND, creating a new level or reward and loyalty program, and bridging the gaming experience with real world experience.

[Another-1]

If you hold the In-game asset we can create the physical version embedded with NFC chip and connect the NFC to you NFT, that is correct.
It’s important to notice that as we want to guarantee the originality of the product our authentication process need to be inculded in the manufacturing of the physical product, so we don’t “Phygitalize” exisiting merchandising but we produce phygital native product.

The Flex2Earn program is included in the SAND budget, that is correct

[hishmad]

@Another-1

Advanced logistic infrastructure: Capabilities in distribution and logistics to the end user.

@Another-1 one last question:

I lived in Indonesia, and I know firsthand that customs clearance for imported goods can be quite complex. I’ve had both positive and negative experiences with various shipping companies, but DHL was consistently reliable in my experience.

My question is: will buyers have the option to choose from a list of shipping companies, or will you be using a single, fixed shipping provider?

[Another-1]

@hishmad we have shipping partners that take care of selecting the local dispatching agent most efficient for the country of destination, for single item shipping we experience is the best way as we can cover the import duty cost avoiding the user to deal with paperwork.

For Asia our logistic hub is in China and there is a very efficient framework in place that allow us to cover the area.

We’re considering the comment and look for customized option where possible associated to the country of destination.

[hishmad]

@Another-1

I want to express my sincere appreciation for the clear and well-structured presentation of this SIP, and for your willingness to address all my questions.

I believe this SIP has the potential to increase the utility of the SAND coin. I am confident in the success of this SIP.

[Lanzer]

Interesting. I think your answer to KCL

We assume that the DAO could participate in a % of the revenues from the Sale of the products

Makes this an enticing offer. If you can prove the ROI numbers to the DAO and commit to a percentage of sales, I’d be supportive of this.

[Biversen]

I think the idea and presentation is good. and you have given answers to the questions. if this SIP is put to a vote, I think it will pass.

the biggest problem will be shipping service and taxation for me.

For example, as a person living in Turkey, a product I will buy from abroad can be a maximum of 30 Euros.

If it goes over, I pay 30% tax for EU countries and 60% tax for other countries. In addition, I pay an additional 20% tax under the name of special consumption tax.

When I buy a 50 Euros product from China, first there is a 60% tax on it. 50+30=80. Then another 20% is added to this taxed total price. 80+16=96 Euros.

This does not include the shipping fee.

If I make the same product myself here, it costs me 60 Euros with 20% tax.

How do you plan to overcome this problem in countries with high taxes like ours. or can you overcome it? because this may be a problem that you cannot overcome. after all, you cannot interfere with the laws of the country. I’m just asking if there is a way. Countries like ours exist in the world.

Whether I buy the product with crypto or with normal money, this tax will be taken from me at customs.

your answer to the question will not affect my opinion. Because the idea is good and will add value to TSB.

[Another-1]

Dear @Biversen,

thanks for the vote of confidence and I fully understand your position as we know there are a lot of countries with high taxes for custom, especially for goods coming from China.

This is a very delicate topic that we’re daily confronting and have experts and logistic partners that help us navigating the different situations.

We recently have been exploring multiple manufacturers in different areas and we do have partners in Europe. We experienced manufacturing in Italy for our NTR1-META sneakers and we do have a strong logistic partner in Italy that can help us serve the European zone.

Talking about your country, we also found out that Turkey is a huge provider for supply of merch, a lot of Football club in Europe they choose Turkey as production hub, especially those club that do self-production, so as we have sport partner we have in mind to establish a production hub in Turkey as well and partnering with local manufacturing to distribute in the European union, in particular for apparel and accessories.

The long term plan is to build a decentralized supply chain that can satisfy efficiently the demand based on the country of origin of the end user.

I hope this answer your question.

[Another-1]

@Lanzer, the profitability of Merchandising product is pretty high, if you think of the number of UGC experiences and creator on Sandbox (1.000+) and apply a conservative 10% yearly of conversion rate of Creators that will use the merch shop with a 300 item average per sale and an average price of 50 USD you already have 100x300x50= 1.5Mln USD in sale per year.

In case of a royalty of 10% on the sales the DAO will receive 150k USD in the first year, that will cover the investment and generate close to 100k USD of profit.

I hope this give you a context on the economics behind the opportunity.

[KCL]

@Another-1

We assume that the DAO could participate in a % of the revenues from the Sale of the products. Another-1 and Droplinked, as service provider, will not charge any % on the sales made by the Creators and the DAO can claim a percentage back into the treasury as re-contribution for when co-marketing or promotions are done to highlight them across the Sanbox community

Hey @Another-1. Thank you for all those answers.
With regards to the revenue sharing you will need to go a bit more details here and consider maybe that the initial refunding from the SIP is coming from @Another-1 and Droplinked profit. The reason behind is that if the project is not working, and none of the creator is using the service, in your current proposal, the DAO is bearing all risks and you have a free shot. If like I proposed the refunding is supposed to come from your profit we have both all reasons to see this scaling and will allow the DAO to lower to cut of the sales from the creators.
PS: (I think your calculation of 10% conversion + 300 orders per exp is very high).

2nd suggestion: it would be good to add some example of cost for customer of standard import taxes that you are used to see in your business (eg: I was asked to pay 40€ for import tax for a jersey I earned for free on TSB in France…) Not super engaging.

Last but not least since you have 9 lands and have not yet participated in any DAO SIP vote (i fI am not mistaken) it will be nice if you could delegate your voting power if you do not have the time to engage yourself in the DAO (here is the list of delegates Delegation). It will not impact in any manner my opinion on that idea (that I like) but it is a way to add 40.5 k VP to the quorum.

[Another-1]

thanks for the support and we’re here to cover any further questions

[Another-1]

@KCL I think the interest of the DAO and Another-1/droplinked are aligned. The funds requested in the SIP are purely to build a SaaS and on-chain selling services as an infrastructure to interact with the SAND environment.

The profit for Another-1/droplinked is coming from the number of merch collection developed by the creators so we have all interest to scale the business, I’m sure there is a way to mediate the impact on the creators with a portion of the refund coming from Another-1 subscription fee.

Regarding the cost for the customer it really depends on the type of item, number of products, region. We can say that we have experience delivery t-shirt, hoodies, comic book in Europe with import tax ranging from 3 to 8 Euro. We usually arrange the discussion with the creators when deciding the retail price weather to include the tax as well, so there is no need of self importation, and the process is more transparent.

On the delegation we’re looking forward to be more engaged in the DAO discussions in order to put at use the VP.

[theKuntaMC]

Het, @Another-1 I changed the title/subject of this SIP Idea to make it a bit more descriptive. With the phygital merch component now mentioned, people who read the subject will have a better understanding of the final product.

Keep promoting this SIP Idea and tagging others who may support or want to refine the idea.

Encourage people to hit that “vote” button in the upper left corner!

[Player1Taco]

I know the team and have been friends with them for awhile. I have seen them deliver on some hard deadlines, I think they laid out a great plan with some good mile stones that rewards completion and not dreams. For what it is worth I think this is a cool plan and I am going to be doing everything I can to support them succeeding!