SIP-39: Pausing The Sandbox DAO

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