Sandbox Diamond Front Row Strategy— Lite Paper, May 2022
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- Strategy Introduction
- Strategy Summary
- The Diamond Matrix
- The Sandbox — Diamond Matrix Analysis Overview
- Entry Strategy
- Exit Strategy
- The Team
1. Exclusive, Diversified, Data-Driven
Our Sandbox Diamond Front Row Strategy is an exclusive strategy designed specifically for our current highest ranking metaverse — The Sandbox. Whether you’re investing 0.1 ETH or 10 ETH, this strategy allows you to spread your risk and maximise your returns across multiple rare sandbox lands.
This strategy offers savvy investors the opportunity to diversify into multiple diamond locations on the front row of major estates within the Sandbox Metaverse through an automated and decentralised process run in collaboration with the Digital Landowners Society.
The Diamond Lands team have utilised physical world real estate fundamentals and AI-powered tools in order to analyse the Sandbox and to identify specific diamond locations where everyone will want to be once the game goes live.
This strategy is pre-programmed into an automated smart contract to identify, and purchase multiple Front Row Diamond Sandbox Lands. Minting NFT tokens in the pool represents a pro-rata share of the Diamond Lands purchased.
- Minimum Investment — 0.1ETH
- Token — ERC1155 NFT Token specifically created for each vault.
- Entry — The Diamond Lands bid bot makes rounds of offers on identified front row diamond plots neighbouring identified key estates that will maximise value once the game goes live
- Exit — Each vault will have an exit set as a multiple of the original plot purchase price (set as buy now, post-purchase), NFT holders receive pro-rata distributions from the sale proceeds at major milestones (when a set % of the plots have been sold). Note — Any plot not sold via buy now will be auctioned with reserve at 12 months allowing for neighbouring estates' experiences and portals to go live.
- Fees — 5% Set up fee at mint (split 2.5% Diamond Lands and 2.5% Land Trust). 25% success fee on profits only (split 15% Diamond Lands and 10% Land Trust)
3. The Diamond Matrix
The matrix is our unique, data-driven, analytical investment tool explicitly designed to assess and filter metaverse land projects. Our proprietary algorithm analyzes over 80 metrics from 6 main categories and then applies a score to each category. This informs our investment decisions specifically in terms of how much risk we should take on with each project and gives us the confidence to move forward in creating specific strategies for our investors.
4. The Sandbox — Diamond Matrix Analysis
Read the full analysis here
“In many ways, the concept of LAND ownership in The Sandbox metaverse is very much like LAND ownership in the physical world. The mantra of “location, location, location” is strong. Be where everyone wants to be, and your real estate investment will pay off.” Transportation and Portals. — The Sandbox Gitbook
The Sandbox is a virtual world where players can build, own, and monetize their gaming experiences on the Ethereum blockchain. Developed by Pixowl Inc and part of Animoca brands, The Sandbox aims to disrupt existing games such as Minecraft and Roblox by providing creators and players with true ownership of their assets through NFTs.
The Sandbox exists as 166,464 plots of land on a digital map. Land is the epicenter of the Sandbox metaverse. Each parcel of land is a unique NFT and users can acquire land to deploy games, assets and develop experiences.
5. Entry Strategy
Key Suburbs & Estates
- AI-powered tools were used to identify key estates within prime suburbs and exclude less prime suburbs
- Key estates were split into categories that are likely to become major experiences when the game goes live.
- Included categories — Sandbox owned, known developers, key partnerships, and large communities committed to developing. Adjacent to sizes 6x6, 12x12, 24x24
- Excluded — adjacent to 3x3s, unknown developers, perceived weaker partner
- We then target the First Row Only of plots surrounding key estates in these prime suburbs
- The size of an estate likely correlates to the size of an experience or the number of experiences on that estate -, ie bordering 24x24 or 12x12 is more desirable than bordering a 3x3
- Map identification — Estates will be recognisable from the map and within the game increasing footfall of the neighbouring plots
- Like subway systems in the physical world, portals allow fast travel across large distances. Time = Money and land in proximity to a portal reduces travel time, increases footfall and thus increases plot value.
- Players will be able to jump from key experiences to neighbouring plots — increasing footfall
- Portals themselves, are likely to only take up a small portion of big estates, the rest of the estate will be a developed experience
- The Diamond Lands valuation algorithm sorts and ranks the shortlisted Diamond Plots into tiered groups based on Key Valuation Factors ‘KVF’s which include; the size and category of the adjacent estate, suburbs, key neighbourhoods within suburbs, proximity to multiple key estates and recent sales history.
- Estimated market values are then assigned to each front row plot, based on KVF’s and recent sales data, but to account for market movements, we track sales data as a % relative to the floor price on the day of sale.
(note — we exclude asking prices). This technique enables us to set our offer bot at correlating percentages to moving floor prices.
- The Diamond Lands bid bot will then deploy in rounds, making offers on each diamond land at an assigned % of the valuation price.
- During each round, the offers will slowly increase in price (if offers are not accepted) relative to the assigned valuation for that particular group.
Note — the bid bot will also target plots that are not actively listed for sale
- Offers will be set for 16 hours
- Bid round 1: -40% of valuation
- Bid round 2: -35% of valuation
- Bid round 3: -30% of valuation
- Bid round 4: -25% of valuation
- Bid round 5: -20% of valuation
- Bid round 6: -15% of valuation
- Bid round 7: -10% of valuation
- Bid round 8: -5% of valuation
Note — The strategy will repeat until all ETH is deployed. Any partial ETH left over will be redistributed to investors.
6. Exit Strategy
The exit will be a) multiple-based, then b) time-based at 12 months
Note — 12 months allows experiences and portals to go live thus maximising the value of DS1’s adjacent plots
Early Exit Multiple
- The exit will be set as a buy now on OpenSea and DLS marketplace’s at a set multiple of each plot's purchase price. i.e. for a 2.5x multiple, if a plot is purchased for 5 ETH the buy now exit will be set for 12.5 ETH.
- We believe the market has yet to fully understand and price in Diamond Plots, and it will do so closer to the game launch
- Investors will receive pro-rata distributions from sales proceeds at major milestones — when set % of the plots are sold.
- Distribution milestones have been selected in order to manage gas fees
- In the event that individual plots are not sold via buy now, at 12 months the plots will be auctioned and the reserve will be set at the Sandbox floor price.
- Rationale — The expected launch date for the first 1000 Sandbox experiences is Q4 2022. Therefore in 12 months from the date of the purchase price, it is likely the experiences and portals that immediately touch the DS1 plots will be live and this will drive value of the immediately adjacent plots purchased under this strategy
Note — fee percentages are fixed and do not change based on the multiple reached
Example (2.5x multiple)
The metaverse real estate opportunity has been likened to buying in Manhattan back in the 1800s. But what if you could go a step further. What if you were able to own on Upper 5th, 57th Street, Park Avenue or around Central Park?
Diamond Lands is on a mission to find the metaverse equivalents of these rare diamonds and make them accessible to all categories of investors. Diamond Lands is creating a series of exclusive investment strategies, all targeting prime lands within the highest ranking metaverses as ranked by our proprietary Diamond Matrix.
Our team has extensive experience in; international (multi-market) real estate land acquisition, development and investment, AI and Machine Learning, gaming, crypto and NFTs. Furthermore, we have built our unique metaverse analysis algorithm and are developing AI-powered proprietary tools focused on valuation and acquisition strategies.
9. The Project Team
Our team has extensive experience in; international (multi-market) real estate land acquisition, development and investment, AI and Machine Learning, gaming, crypto and NFTs. Furthermore, we have built our unique metaverse analysis algorithm and are developing AI-powered proprietary tools focused on valuation and acquisition strategies. This puts us in a unique position to identify and invest in the best opportunities in the metaverse.
Best friends from their University days in New Zealand, Be and Grey teamed up with GraiC from Ireland and DC and Ram from Canada, to form Diamond Lands. Be is a founding partner of a leading data centre, logistics and industrial real estate development company in Europe. Over the past 5 years Be has led strategies to assemble and rezone 1.5 million square meters of land in 9 European countries and placed over Eur 1.5 billion in capital in land and developments. The Diamond Matrix employs many aspects of his multi-country physical world analysis and strategy experience, with many parallels to analysing and identifying niches and placing risk-adjusted capital across multiple metaverses.
DC is the head of AI and machine learning for a major bank. Ram is an Ex-startup founder, who worked for 2 fintech unicorn startups that are now worth over $1B. He also designed the AI+ Analytics platform for a 3rd startup (which is now part of Meta). Graic works for a tech giant by day and is the gamer of the group and an Axie Infinity play to earn OG. GriaC and DC have been integral to developing the first of the Diamond Lands proprietary tools — The Diamond Matrix. Grey is an ex-professional sportsman and now a full-time Web-3 enthusiast. He began investing in crypto in 2017 and then in early 2021 went deep down the NFT and metaverse rabbit hole, pulling Be along with him.
For the short term, the team are choosing to remain anonymous due to their current physical world contractual obligations but the team will doxx themselves leading into the launch of the first centralised investment funds. Until then, custody of investor funds will be managed by the doxxed DLS team.
The Digital Landowners Society (DLS)
The Digital Landowners Society are a very strong team with more than 30 years of experience in digital technologies, including AI, data science and blockchain. As we got to know the team we became more and more impressed with their knowledge, skills and vision, particularly around their creation of their marketplace and LandDAO. Find out about more them and their amazing vision at https://dls.so/ and https://landdao.so/
Why use fractionalised pools?
- We believe this serves 2 key purposes. Firstly, everyone deserves the opportunity to own a piece of the Metaverse, so this allows those who may not be able to afford a diamond plot the chance to invest. Secondly, investors have diversified exposure across multiple diamond plots, which spreads risk and returns.
Why is the Diamond Lands team anonymous?
- For the short term, the Diamond Lands team are choosing to remain anonymous due to their current physical world contractual obligations but the team will doxx themselves leading into the launch of the first centralised investment funds. Until then, custody of investor funds will be managed by the doxxed DLS team.
Who will build the smart contract?
- The same team at DLS and Land Trust that have built the Land Trust floor pools will build the Diamond Lands smart contract
How often will this pool be released?
- Diamond Lands pools that deploy this specific strategy will be released at a maximum once per quarter, each with limited size, so as to not influence the pricing of the DS1 target plots.
Token type, name, chain and how to I buy it?
How do I receive my distributions?
- Investors will receive pro-rata distributions from sale proceeds in ETH into their wallet holding the pool tokens at set major milestones — for example when 50% and 100% of the plots are sold
How are the funds managed?
- With this pool, our smart contract is responsible for buying and dividing the profits across the investors of the pool without neither funds nor assets leaving the smart contract. The actual purchase and distribution commands are made by a human within a predefined strategy in the smart contract.
Can I withdraw my investment early?
- There will not be additional early exits for investors outside of the 3 distributions outlined above. We suggest if you are not comfortable with this or have shorter investment horizons to not invest in this pool.
How is the reserve set at auction in 12 months if a plot doesn’t sell as a buy now at the set multiple?
- The auction reserve price will be set at floor price of Sandbox land at that time in ETH
What is the LAND Trust?
- The Land Trust represents an investment platform that enables ownership and management of metaverse lands through fractionalized index pools and protocol governance through DAO.
Will you launch other pools?
- Yes, we will launch a range of pools, all based upon the Diamond Matrix. The Diamond Sandbox Pools employ this specific strategy will remain limited in size and also to max 4 deployments per year, so as to not move the market.
Will you launch development pools?
- Yes in future we will launch development pools and we plan to employ a similar data-driven approach to identifying the highest development yields for specific locations in different metaverses.
Does it matter if I invest on the Diamond Lands page or the Land Trust pools page?
- You can invest on either Diamond Lands or DLS, it will go into the same pool and the cart on both sites is the same/integrated.
What happens to unplaced ETH?
- Any ETH that is not utilised due to the remaining amount being too small to purchase a plot, will be redistributed to investors pro-rata at the exit/distribution of the pool.
What is the minimum pool size and what if this is not reached?
- The minimum pool size is 50 NFTs. If this threshold is not met one month after the pool goes live for investment, the pool will be liquidated and all funds will be returned to investors. Diamond Lands will cover the gas fees in this scenario.