The Sandbox says it will fully reimburse eligible SAND holders after an Aug. 21 exploit drained 14.744 million tokens from an Ethereum vault, a loss the company valued at about $700,000. In a post-mortem, the metaverse project said affected users who legitimately held bridged SAND on Base or BNB Smart Chain before the attack will receive an equal amount of Ethereum-based SAND.

The company said compensation will be paid from its treasury and that no new tokens will be created for the reimbursement. It also outlined a claims window that is expected to begin within two weeks and stay open for a further two weeks.

Who will be compensated

According to The Sandbox, the repayment program covers users who held bridged SAND on Base or BNB Chain before the exploit took place. Those holders are set to receive Ethereum-based SAND on a 1:1 basis, preserving the number of tokens rather than compensating in another asset.

The company added that two centralized exchanges account for more than 72% of the eligible balances tied to the incident. Those platforms will handle payouts directly for their own affected customers instead of routing all claims through the public process.

How the exploit worked

The Sandbox said the attacker took advantage of a configuration flaw in the SAND contracts used on Base and BNB Chain. That weakness allowed the attacker to become the sole verifier of incoming bridge messages, making it possible to mint tokens that were not properly backed.

The company said roughly 14.7 million SAND was drained from an Ethereum vault in the incident. It estimated that amount at about 0.5% of SAND’s 3 billion maximum supply.

Scope of the token impact

The post-mortem said more than 339 trillion unbacked SAND was minted across Base and BNB Chain during the exploit. However, The Sandbox said those tokens have been isolated and cannot be bridged or redeemed.

The company also said the incident did not affect SAND on Ethereum or Polygon. That distinction is central to the reimbursement plan, which will use Ethereum-based SAND rather than assets from the compromised bridge setup.

Bridge changes and next steps

The Sandbox said the compromised bridge contracts will be permanently retired. If the project resumes bridging to Base or BNB Chain in the future, it plans to do so through newly deployed contracts rather than reusing the affected ones.

For now, the next confirmed milestone is the claims process. The Sandbox said it expects claims to open within two weeks, after which eligible users will have another two weeks to submit them. At the time of publication, SAND was trading at about $0.04, down 10.4% over the previous seven days.

Source: cointelegraph.com