Howdy everyone, Sandow Podcast. This is Sandow69,
and we're doing a SIP review of SIP39, pausing
the Sandbox DAO. Today is a non -discussion,
a read -through, and a little bit of commentary.
Disclaimer, I do not represent the Sandbox game
or the Sandbox Foundation. I'm not your financial
or legal advisor. Nothing I say is to be taken
as financial or legal advice. When I say the
word SIP, I mean Sandbox Improvement Proposal.
When I say the word DAO, I mean Decentralized
Autonomous Organization. If I use the word SanFam,
I'm talking about the Sandbox community, those
who participate in the people, product, and purpose
of the Sandbox ecosystem. That ecosystem looks
a little bit like this, where you have in the
people side, everything from the gamers of the
Sandbox team. The product is everything from
the game client to the DAO itself. Purpose is
the white paper as expounded upon by Sébastien
Bourget, Arthur Moudadid, Yat Tzu. And that equals
the ecosystem, which goes round and round each
day. And today's episode is on the DAO. If you'd
like to learn more about the ecosystem and the
DAO and how it works, go to the DAO Education
Hub in the Sandbox Metaverse located at 2 -154.
It is in the bottom left of the map, right next
to Jurassic World. My name is Lanzer, I'm your
host, and I run the MetaWorlds group. We've done
a number of things, a few experiences to include
floor droppers. Also, we built the DAO Education
Hub after winning an RFP from a SIP. And landowner,
avatar holder, I've been part of. sandbox ecosystems
it's about 2021 like i mentioned today we'll
be talking about sip 39 we'll be doing a read
-through of it it traces all the way back to
august 2025 of last year when big whale gaming
daily kate irwin and they came out with some
articles revealing that the sandbox had been
realigned and that it that a new CEO came in
from Animoca Brands, Robbie Young, stepped in
in order to synergize a new way forward for the
Sandbox, which through time we learned was Sandbox
3 .0. So through some AMAs that happened the
past couple months, mostly also the SIP39 AMA
that happened just a couple weeks ago. I did
a couple of my last two episodes, Sandow 67 and
Sandow 68. 67 was a commentary on the AMAs themselves,
and 68 was an interview of Sebastian Bourget,
who is now the global brand ambassador for the
Sandbox, still the co -founder. So that was part
two of an interview that we started back in Sandow
8. We learned a lot about the new way forward
from both of those episodes. And now is a read
-through of SIP39, as it is now live on Snapshot.
So that's what we're going to do here today,
is read through it. A little bit of commentary,
but most of my commentary was done in Sandow67.
And questions and answers and follow -up were
Sandow68 with Sebastian Bourget. So, without
further ado, let's start. SIP39, Pausing the
Sandbox DAO, was put out by Arasakyo, which is
the DAO administrator company headed up by Cyril.
We interviewed him not long ago. I think it was
a few months ago. Sandow61 -ish. It went live
today. So the TLDR. The 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.
The 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. And
I'll be taking notes here so I can go back to
it at the very end. The how. The pause is implemented
via a formal SIP and vote. Responsibilities for
finance, assets, and contracts transition to
this inbox team. Active SIPs continue through
the end of quarter one, 2026, where applicable.
SIP 26, SIP 33, and SIP 36 are terminated, canceled.
And now we get into the when. Effective date
is 25th of February, 2026, which is about when
they estimate the SIP 39 is going to pass. So
you can see down here in the bottom right, it
is the exact day that the SIP would pass if voted
yes. 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
March 2026. Now we get into the SIP detail section.
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 3 million sand across 38 SIPs, generated
8 ,000 forum posts and 500 threads, experimented
with community governance and decentralized decision
-making. They're referring to the Sandbox DAO
Grants Program, the SDGP. However, over that
same period, we have identified the following
challenges. The sandbox ecosystem is rapidly
evolving and the types of initiatives supported
by the DAO is not clearly aligned with those
changes. With operating costs invoiced in USD
euros, the decline in sand price means the DAO
must self -spend more sand to cover the same
fixed cost, 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, pause the 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 remain
obligations will be either executed to completion
or terminated in accordance with the relevant
contract terms where a contract exists, such
as notice period or RADA 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.
Subsection 3. Governance Bodies. No new governance
initiatives. For example, special counsel, advisory
board, or delegate. Elections new or 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 transferred to the Sandbox
and reduced to the minimum required to preserve
the Sandbox Foundation's assets for it to remain
compliant. As part of this transition, Arasakia
will progressively hand over operational access
for finance and asset tooling, including custody
and banking and payment. Accounting and reporting
workflows, including sub -ledger replacement
plans. Governance tools and infrastructure, such
as snapshot admin, website, forum, DNS, etc.
Arasakia will no longer act as the DAO administrator
starting 31 March 2026. Arasakia 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 programs.
Existing SIPs are handled per the rules above.
Continue through quarter 2026 for applicable.
Terminate, cancel. SIP 26, SIP 33, SIP 36. Responsibilities
transition to the Sandbox team. AirSakyo 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 line of where the platform
is heading. Thus, any future activity can be
designed to meaningfully support creators, players,
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 and Treasury Value Causing
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 1.
Confusion for the Community Why? DAO pause and
SIP terminations may be perceived as deprioritization
or closing the DAO. Mitigation. Communicate scope
clearly. Publish consolidated SIP status table.
Run one structured AMA. Risk number two. Contractual
disputes. Any termination of existing contracts
can create legal risk. Mitigation. If applicable.
Follow contract notice terms and document pro
rata closeout. Direct outreach to affected authors.
Risk number three. Operational risk during transition.
Why? Access, custody, banking, accounting, tooling
changes. Mitigation is a structured handover
plan through 31 March 2026. Minimal tools retained
where needed. Risk number four. Fragmented narrative
across channels. Why? Conflicting statements
amplify backlash. Mitigation. Single forum thread
as a source of truth and limited spokespeople.
Okay, next section is budget requested. $44 ,400
USD. Costs of maintaining the DAO assets by Sandbox
team for one year. Expiring 25th February 2027.
This will be supported by a specific service
agreement between the foundation and the sandbox.
Hmm. Implementation plan section. Milestone number
one. Freeze new SIP intake. How do we measure
success? No new SIPs accepted. Process after
SIP 39 passes. Deliverables. Update SIP intake
guidance and forum notice stating SIP submissions
are paused. Expected completion date immediately
after vote concludes. Also in two, publish consolidated
SIP status view. How do we measure success? Single,
shared, reference for SIP status, and next steps.
Deliverables, consolidated SIP status table published
on forum to include the SIP number, status, contract,
yes or no, payments, and decision. Expected completion
date immediately after vote concludes. Also in
three, terminate SIP 26. 33 and 36, decisions.
Decisions implemented cleanly and documented
is the how do we measure success. Deliverables
are SIP 26 termination notice and closeout plan.
SIP 33 and SIP 36 close, cancel before start,
documented. And expect a completion date. by
february or march 2026 in line with contract
terms milestone number four operational handover
to the sandbox how we measure success the sandbox
has access and can operate deliverables is a
access transfer completed checklist when expected
completion date is By 31 March 2026. Milestone
5. Comms and channel posture. How do we measure
success? Single source of truth and limited comms
footprint. Deliverables. Forum post. One structured
AMA. And final summary of what changes. Does
not change. Expected completion date is March
2026. Milestone 6. dormant dow begins how do
we measure success now operations pause as defined
in step 39 deliverables is confirmation post
pause mods active no new sips operations handled
by the sandbox starting 1 april 2026 expected
completion date 1 april 2026. all right the next
section is the team and author background is
authored by the sandbox in coordination with
the sandbox foundation Implemented by the Sandbox
and the Sandbox Foundation with handover support
from the Dow Administrator. 31 March 2026. Two
votes registered as of right now. 13 days left.
And it is currently a no vote with 3 .7 million
no votes and 188 yes votes. So right now it's
99 % no. And 0 .01 % yes, although we know that's
going to change because the sandbox confirmed
that they will be voting with their wallets,
and we went over that AMA in our last episode.
Okay, so there it is. There's the read -through.
I'm going to... There's a few things that caught
my eye that I'm going to go over, and then we'll
conclude. The first thing I noticed was where
it said a shift to minimum maintenance mode to
preserve assets and remain compliant. I think
what they're talking about there is to register
annually for a sandbox or a foundation company
in the Grand Cayman Islands. We went over the
Grand Cayman Islands in depth in our foundation
company mini series that we concluded with Sandow
65. We interviewed a director, lawyers, and all
that sort of stuff. So check that out if you
want to know a little bit more how Foundation
Company is run. The next thing that caught my
eye is when they mentioned reassess the DAO's
purpose and operating model before taking on
any new commitments. So as of right now, they
could restrict new commitments in its current
form. I went over this in Sandow. where the old
process was more of a, let's do this one, the
old process was you submit a SIP, it goes through
a discussion, and the special counsel will issue
a recommendation. It was very straightforward.
There was nothing stopping you from submitting
a SIP. However, the new process that came about
in October 2024 increased it from about 150 days
to 270 days and introduced a kind of gating where
you, You post your SIP idea to the subforum,
and you only get to submit an actual SIP for
voting if you're invited by the DAO admin team
to the step three. If you're invited in step
two here, then you get to submit. via the Typeform
link. And then you go through DAO admin team
review and comments, you get the recommendation,
and then it goes to refinement and then public
discussion and finally voting. So they already
were able to restrict which commitments they
take on if they really wanted to. And they were.
I've been, I think I've authored maybe seven
or eight SIPs. Two or three of them passed. One
of them did not pass. So I know firsthand the
amount of back and forth that goes along with
the DAO admin team, and they scrutinize it quite
well. So they apply a lot of keen eye to whether
or not it's going to help the community or if
it's in line with the vision of the sandbox.
So they already strictly control what SIPs go
to vote. So that's why that one kind of struck
me as weird. Because their operating model already
functions in a way where they can restrict taking
on new commitments. Okay, they mentioned three
SIPs that were particularly going to be terminated
or canceled. And I went over that in Sandow 67
in depth. But let's take a look here at what
ones they're referring to. So it's SIP 36, which
is the land estate sale, and I don't understand
this one. This one was useful to the sandbox
on the actual game. It wasn't useful to the DAO.
It was enabled by the DAO to give a highly sought
-after tool for people to trade and sell estates.
Right now, you have to use some unsafe methods.
In order to do that, and in a very, very long,
cumbersome, over -the -counter method, all of
the safe methods that used to happen, like escrows,
they're gone. I know because I tried somewhat
recently to buy an estate, and it was an extremely
difficult process to do. So, the only reason
I got through is because I really wanted an estate.
But this tool would have made that really simple.
I could buy it really easily. Because it would
integrate with the GBM. Which currently handles
the auctions. For new land releases. In the sandbox.
So I have no idea. Why they would shut this one
down. Why would they cancel it. This is useful.
And built into the sandbox games website. So
there you go. Civ 33. The sandbox metaverse campus.
Metaversity campus. Over in the Philippines.
I guess I can kind of understand that one. Because
it was more about. bringing attention to the
sandbox. And if they're pivoting away to AI and
corners and sand chain, then that vision might
be inconsistent with what the Metaversity Campus
was doing for SIP33. I can understand that. The
Metaversity Campus was more about VoxEdit and
GameMaker and bringing people into the sandbox
metaverse, which is now changing. And then SIP26.
was the NFT collection management for the Sandbox
DAO. This is Arthmore and his team. They were
strategically realigning the 1 ,000 assets for
the Sandbox NFT's collection. It was worth about
1 ,000 ETH. And I don't understand why they stopped
this one as well, because Arthmore, while they
were funded by the DAO, they were successfully
earning and paying their own bills with the realignment
that they were doing. They had sold... and liquidated
about $400 ,000 worth and returned it back to
the DAO so that it could either require different
sorts of art that's more culturally aligned with
the sandbox, or if the DAO wanted to keep that
money and repurpose it, then that was all part
of the SIP to make as a community decision. Now
that the sandbox is taking over, then, or the
SIP would propose that the sandbox takes over
so they could repurpose that as they need to.
They were highly successful in meeting all of
their target goals and objectives. So I'm not
sure why they stopped this one either. Yeah,
so I wish they had given that one a bit more
thought, or maybe they did, but there's some
reasons they're just not sharing. I gave them
that feedback as well. I'm not sure why they
wanted to do that. but there it is. It's still
in the SIP after the discussion period. All right,
the next part that caught my eye was when it
talked about the Sandbox ecosystem is rapidly
evolving and the types of initiatives supported
by the DAO is not clearly aligned with those
changes. Okay, great. That's fine. This SIP authorizes
the termination and cancellation of other SIPs,
so that means you're already evolving. So even
if you continue the DAO, you can still cancel
and terminate those SIPs if you really wanted
to and still keep the DAO going. So it's not
quite clear to me why this would lead us to wanting
to pause the DAO where we already have a clearly
defined restriction mechanism for new commitments
and this SIP would authorize a termination and
canceling of other SIPs. You could still continue
the DAO. So even if it's rapidly evolving, the
community now can no longer rapidly evolve with
it because it is now being paused and we can't
vote on anything new. Governing bodies are being
stopped. So that part doesn't make any sense
to me. And the next one was, a consolidated status
table will document outcomes SIP by SIP. Thank
you, thank you, Cyril and the DAO admin team
for doing this. I'm looking forward to seeing
this table. I have something on my own. that
I put together that I'll be doing in my next
episode, where I do a review of the entire sandbox
DAO before, if this vote passes with a yes, then
it'll be one of the final episodes, I imagine,
where we just do a review of the sandbox DAO
in its entirety. And so this consolidated table
will really help with that. But I think it's
great that they're doing this because it kind
of gives a little bit more transparency into
how the DAO has done and what steps it's taken
from SIP 1 all the way to SIP 39. So thank you.
Thank you very much for doing that. And then
the next thing is transition operations to the
sandbox team. That one is a little bit dicey
because the sandbox team was already involved.
I think the more we learn about SIP 39 and people
who've been paying attention to the DAO knows
that the sandbox team has had quite a bit of
involvement. Thus far. So transitioning operations.
To the sandbox team. Right now. It just seems
kind of like. Like a way for them to. Push it
to the side. Which is one of the risks that they
mentioned. And I'll get into. What I thought
about that. Because there's one sentence there.
That I had flagged. But it looks like a way for
the sandbox team. To kind of push it to the side.
And not really acknowledge it. the community
on this one. And the only reason I say that is
because I've been in sandbox community for quite
a while. And the Dow was one of the first ways
that a lot of community members felt like we
could have a say in the sandbox journey and really,
um, participate and in the discussion and the
decision -making, even though we didn't have
any representation too much in the sandbox, uh,
special counsel or the advisory board, because
they were company -nominated, which is why this
part stuck out to me, we were looking forward
to the elections to where we could nominate community
members, and it's a bummer that the pausing of
the DAO proposes a pausing of the governance
bodies, like advisory board and special counsel.
Seb and I talked about this in Sandow 68, where
I asked him what was... What was his understanding
of why that was happening? He gave some really
encouraging answers. I still don't like the fact
that SIP39 is doing this, but it was helpful
to hear Seb talk about it. Yeah, for what it's
worth, I understand. I still disagree with that
as part of SIP39, which is one of the reasons
why I voted no. I want to continue the sandbox
now. Okay. So the next thing that stuck out to
me was where it said, Thus, any future activity
can be designed to meaningfully support creators,
players, and builders in the context of the updated
product vision. There's nothing about continuing
the sandbox DAO that couldn't still do this.
If we were to elect new special counsel and advisory
board members who would then meet as a community
each day and build in public, there's nothing
that would stop us from... from designing and
modeling our activity to support this new updated
product vision. We would be in a better place
to support the updated product vision because
we're involved, because we can discuss and make
our own decisions on community matters and retain
people. But this SIP would pause all of that
and we would just kind of be in receive mode.
It'd be a one -way street. Kind of like it's
been for a number of years, you've been involved
in the community. Unfortunately, the Sandbox
team has kind of been a one -way street, which
is why so many people, including myself, loved
the DAO because it offered us a two -way street.
And I really enjoyed the DAO and so did many
others. So I'd like to continue that because
it's one of the few things we have where we feel
heard as a community. The next thing that popped
up in my... On my brain was when I read, by halting
new SIP intake and funding decisions, the DAO
avoids committing resources to initiatives that
may no longer fit the evolving ecosystem. Again,
I already went over this. The current SIP process
where you must be invited by a DAO administrator
or the DAO admin team in order to submit a SIP,
and then it goes through a lengthy admin team
review. Which one of my sips is still stuck in
admin team review because of the lengthy back
and forth. And it was just clear that I wasn't
able to convince the DAO admin team to let it
go to special counsel recommendation and then
to vote. It was well supported. A lot of people
wanted it. That's called the sand chest. But
the DAO admin team did not let it pass their
review. Because it had a lot of questions and
it didn't like the dollar figure. There's a lot
of things that they, a lot of back and forth
on it. And I still feel that it was a good sip.
It still is a good sip. It was very reasonable.
However, the Dow and Mateen disagreed, so it
didn't progress. So that's two steps that severely
limits anyone's ability to get it to vote and
for the Dow to commit. those resources to initiatives
that no longer fits the evolving ecosystem like
i said i think i've authored eight or nine sips
and only four four of them went to vote three
of them passed so one of them did not pass so
this is already true uh and and doesn't need
to pause the dow in order to make it any more
true Okay, 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. I think this is the real reason why
this is happening. If I had to guess, and being
in the community now for five years and the DAO
for a year and a half, I think this... uh preserve
for future use rather than consumed by ongoing
operations is the real reason why they want to
do it because the special council was was compensated
127 or 120 000 sand per person that's times five
then you have well the advisory board was pro
bono so they were all not being paid at all but
then you had to pay the director for the foundation
You have to pay renewal fees, all those sorts
of stuff. However, we already know that SIP 39
is requesting $44 ,000, right? Yeah, $44 ,000.
So we know that it's going to, at least they
consider that to be the minimum activity needed
to continue. So I'm not quite sure what they
mean by asset stewardship. Maybe they're talking
about the NFT collection that Arth Morton and
his team have been successfully stewarding in
SIP36. However, compliance, you can be compliant
with what you had, but I think it's really about
preserving the remaining sand for future use.
which we heard from the Dow admin team that it's
about $800 ,000 left in today's exchange rate.
Which, if I did some reverse math, let's try
that. So about 800 ,000 sand, and sand is currently
8 cents. So it's about 10 million sand left.
So if you had a special counsel, which had 120
,000 sand, times five people at six hundred thousand
okay yep so that that looks like maybe a major
reason why the governance bodies are being shut
down or paused i rather because 800 000 sand
at 0 .08 is 10 million maybe they think that
the the 600 000 sand to pay special counsel is
using too many resources for what they believe
they'll get out of it. That to me is the best,
the most, what's the word? Charitable explanation,
I think, for that. And if that's true, okay,
I guess I can understand that. That's an argument
to be made. But up until this point, there are
a lot of counterbalances to that that I've already
described. And the last thing that I... while
I was reading was, this will be supported by
a specific service agreement between the foundation
and the sandbox. I wonder if they're referencing
the current service agreement or if this is a
new service agreement. I think I came to understand
that there was a specific service agreement to
the foundation of the sandbox. I think that was
mentioned in one of the forum posts or on X.
Can't recall where exactly. But if this is a
new service agreement, then... Uh, it's not clear
to me why this support would be needed because
the sandbox already had quite a bit of, of influence
in the way the sandbox foundation ran. So, uh,
I don't know. It's just kind of scratching my
head a little bit about that based on what I
know about the Dow. And we read everything about
the Dow, all of the memorandums, all the, articles,
the bylaws. We read the laws and the Cayman Islands
surrounding it in our foundation miniseries.
So we have a pretty good understanding of what
would be necessary and what's required to be
compliant. And additional service agreement is
kind of puzzling for that. So I think this SIP
kind of gives a little more questions than it
does answers. But as you saw mentioned a few
times in, In SIP 39, one of the risks that they
were mitigating against was the confusion. And
the mitigation was to communicate the scope clearly,
they would run one structured AMA, which they
did, exactly one. And then down below, in order
to mitigate fragmented narrative across channels,
a single forum thread and limited spokespeople.
So there were, I think, two spokespeople on the
forums. three spokespeople on the ama and other
than communicating in the ama and a few messages
on the forums there hasn't been much else to
go off of for this sip it's just kind of like
here it is now go vote but also the sandbox style
is going to vote with its 27 million wallet so
it's going to be difficult to overcome that i'm
going to do my best now to get the word out and
and make a case for why we should continue the
DAO. And as I mentioned in Sandow67, which is
my reaction to the DAO pause and the AMAs, and
then Sandow68, I'm of the opinion we should continue
the DAO. We can continue the DAO and still meet
the vision and evolve with Sandbox 3 .0, and
we can do so with our governing bodies. The community
will feel more involved. It will be able to evolve
faster. it will, I think it's the right decision
to make. So I voted no in order to continue the
DAO. And there we go. I think that covers it.
Okay. So that was a read -through of SIP -39
and some commentary right after it. I normally
go through Sandbox Spaces, forums, on Discord,
on Twitter, and on YouTube. Here are the things
I normally go over. And on the X Spaces, there's
these three things, Bulls on the Block, Coffee
with Captain, and Well Members. We've covered
them and interviewed most of them. And I'll take
a quick peek at the Twitch, see if anyone is
also hosting Sandbox so I can raid them. Maybe
I'm the only one. I am. So I will raid friend.
And then we will conclude today. So that was
Sandow69, a SIP review of SIP39, which wants
to pause the sandbox DAO. I read through it.
I gave some commentary. Thank you all for your
time and have a great day. See you in the metaverse.