Sandbox and Decentraland: will there be a comeback?

From former winners of the 2021 bull run to billion-dollar losses in big tech - metaverse projects sound very nice, but often disappoint in reality.

Each crypto cycle brings its own themes and trends, which often determine which projects receive more attention than others. In the 2017 bull run, there was a strong focus on Initial Coin Offerings (ICOs), a method of raising capital for new cryptocurrency projects in which tokens are sold to investors before being traded. The most recent bull run focused on the metaverse, with flag-ships such as Sandbox and Decentraland. Today, these projects have fallen a bit into oblivion - what happened?

Hype around the metaverse

The emergence of trends is a dynamic that almost no one fully understands. Companies from all over the world are investing huge sums in research and trend analysis to recognize early on which topics will become relevant to the market. A good example of this is Facebook: The company recognized the vision of the metaverse and invested more than $100 billion in developing its own virtual reality world. Mark Zuckerberg was so convinced of this idea that he renamed the company Meta.

The metaverse trend was further fueled by the NFT bullrun. Dominant brands and companies launched NFT campaigns and gained virtual ground in metaverse projects such as Decentraland and Sandbox. One such institutional intake in the space and the mainstream acceptance of NFTs had a huge impact on the industry. Interestingly, NFTs such as the successful CryptoPunks project have been around since 2017, although their hype did not rise until 2021.

The stock price plummeted

With the hype around meta and NFTs, metaverse projects became the most lucrative investments of 2021. Decentraland started with a price of just five cents in August 2020 and rose to $5.90 USD within a year, an increase in value of more than 100x. The price of Sandbox's SAND token developed similarly, from about 0.60 cents to just under $9.

However, the end of the bull run brought some harsh realizations. It became clear that people were not ready to live and work in a virtual world after all. NFTs experienced a significant decline and have had virtually no significant price recovery to date. Non-fungible tokens, which used to fetch millions, suddenly had no interest or use.

The metaverse of Meta suffered billion-dollar losses and forced the company to rethink its strategy. The metaverse trend came to a halt and the prices of Decentraland and Sandbox corrected by 95 and 97 percent, respectively.

Is a comeback possible?

2021 proved to be definitely too early for the metaverse, but the future remains open. Investors and companies hoped for more progress in the development of the metaverse and will be more cautious about future investments. Looking at current trends, it seems clear that the focus now is more on AI tokens and tokenization of real assets. Should the metaverse make a comeback, attention will likely also return to projects such as Decentraland and Sandbox, albeit sometimes in combination with new projects.

Want to know all about the Metaverse? Then read our Academy article.