Blockchain game project The Sandbox announced it will compensate eligible SAND holders on a 1:1 basis after a bridge hack occurred on August 21, resulting in the withdrawal of 14.744 SAND from a treasury on the Ethereum network, valued at roughly $700,000.

This pledge came in a post-incident report published by the company, which stated that users who had legally held SAND connected on the Base and BNB Smart Chain networks prior to the attack would receive an amount of SAND backed on Ethereum that is equal. The compensation will be funded from the project’s treasury, without issuing any new tokens.

According to The Sandbox, it is expected that the claims process will begin within two weeks, and remain open for an additional two weeks. The company also stated that two centralized platforms hold more than 72% of the eligible balances, and these platforms will distribute compensation directly to the affected customers they each represent.

In its explanation of the nature of the hack, the company said the attacker exploited a flaw in the SAND contract settings on Base and the BNB Chain, allowing them to become the only validator of the incoming bridge messages and thereby mint unsupported tokens. The Sandbox confirmed that around 14.7 million SAND were withdrawn, which is equivalent to about 0.5% of the coin’s maximum supply of 3 billion.

It also clarified that more than 339 trillion of the unsupported SAND were minted on the two networks, but these tokens were isolated and can no longer be traced or redeemed. In contrast, the SAND tokens on the Ethereum and Polygon networks were not affected.

The company added that the compromised bridge contracts will be permanently retired, and that any future bridges on Base or BNB Chain will rely on new contracts deployed from scratch.

At the time of publication, the price of SAND was trading around $0.04, down 10.4% over the previous seven days, according to available market data.

What does that mean for SAND holders?

• Compensation will be 1:1 for eligible parties only.

• Claims will open in about two weeks and continue for an additional two weeks.

• Compensation will come from the project’s treasury, not through minting new tokens.

• Tokens on Ethereum and Polygon were not affected by the incident.

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