About this Summary

Ndax Canada Inc. (“Ndax”, “we” and “our”) believes that our users should understand the crypto assets that they are able to trade and stake using our crypto trading platform (the “Platform”). One of the crypto assets we offer on the Platform is SAND. We created this summary to help you understand the basics of SAND as well as some of the risks involved in trading in SAND. While we tried to describe the key features of SAND, this summary isn’t meant to tell you everything you’d want to know before investing in SAND. You should also do your own research on SAND to make sure you are comfortable investing in it.

Description of SAND

History of SAND

The Sandbox project started in 2012 on mobile platforms but it wasn’t until January 2018 when The Sandbox started developing a new version of the game – a 3D, multiplayer platform using blockchain technology (Ethereum) to offer a virtual world where players can build, own, and monetize their gaming experiences.

Over the past 4 years, The Sandbox has built the ground to establish the Players & Creators 100% Ownership Economy through NFTs and LANDS. They’ve also raised $3.41M USD from strategic investors, including Square Enix, and have secured over 60 partnerships to develop content on the platform, including brands like Smurfs, Shaun the Sheep, dApp game studio Dapper Labs, and iconic game companies like ATAR.

What is SAND used for

The Sandbox is a community-driven platform where creators can monetize voxel ASSETS and gaming experiences on the blockchain.

SAND is the utility token used throughout The Sandbox ecosystem as the basis for transactions and interactions. It is an ERC-20 utility token built on the Ethereum blockchain. There is a finite supply of 3,000,000,000 SAND.

How SAND works

The Sandbox is a virtual metaverse where players can build, own, and monetize their gaming experiences on the Ethereum blockchain using the platform’s utility token SAND. Players can create digital assets in the form of Non-Fungible Tokens (NFTs), upload them to the marketplace, and integrate them into games with Game Maker.

Players spend SAND in order to play games, buy equipment, or customize their Avatar character. Creators spend SAND to acquire ASSETS, LANDS, and through staking. LAND Sales will drive demand for SAND to purchase LANDS.

Through the use of ERC-1776, The Sandbox allows platform users to initiate transactions on the Ethereum blockchain while transaction gas fees are paid by the platform, optimizing the overall user experience. 50% of all SAND transactions collected from LAND sales, Premium NFT sales, transaction fees, and subscription services goes to the Foundation.

Risks

Before entering into an agreement (a “Crypto Contract”) with Ndax to buy or sell any crypto assets through the Platform, it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in crypto assets.

Like other crypto assets, there are some general risks associated with investing in SAND. Each of these risks is described in more detail in the Risk Statement provided to you at the time that you open your account with us and is also available online on the Ndax website and app. You should review the Risk Statement.

While we tried to describe the key risks associated with SAND here and in our Risk Statement, we emphasize that this Crypto Asset Statement is not exhaustive of all of the risks associated with trading in SAND. You should also do your own research on SAND to make sure you are comfortable investing in such a crypto asset.

Regulatory Information  

Ndax is offering Crypto Contracts in accordance with the terms of a pre-registration undertaking dated March 23, 2023, that we entered into with the Canadian securities regulators, while our application for registration in certain Canadian jurisdictions is reviewed. Please note that Ndax is not currently registered under securities or derivatives legislation of Canada and there is no guarantee that registration will be granted.  

The statutory rights of action for damages and the right of rescission in the securities legislation of each province and territory of Canada would not apply in respect of a misrepresentation in this Crypto Asset Statement.

Prior to offering a Crypto Contract on SAND, Ndax assesses whether SAND is a security and/or a derivative under the securities and derivatives laws of Canada. Ndax’s assessment includes a review of the history of the SAND (such as how it was created and its governance structure), its characteristics, its market capitalization, and any regulatory concerns regarding SAND. Based on its assessment, Ndax concluded that SAND is not a security or a derivative. However, there is a risk that this conclusion could change in the future. In that case, Ndax may be required to halt or withdraw SAND from trading on the Platform and stop any future trading of Crypto Contracts based on SAND, and users holding SAND may be required to liquidate their positions, potentially at a significant loss. In this event, users holding positions in SAND will be notified via the Platform or other electronic means and advised of the options available to them and any applicable period to sell or withdraw their positions in SAND.

No Canadian securities regulatory authority has expressed an opinion about SAND, including an opinion that SAND is not itself a security and/or derivative.