“That beastly predator is the only thing that hunts krayt dragons—and those are massive.“

Hare’en

The Sand Demon’s of Tatooine were 6 legged semi-sentient insectoids that stood as tall, if not slightly taller then the average human of the galaxy. However these were the deadliest and most feared creatures in all of the Dune Sea, as a single Sand Demon was fully capable of killing a Krayt Dragon.

Known only in myth and legend to the locals and transients of Tatooine, they were well known in both Tusken and Jawa folklore. To the Republic and Empire, the Sand Demon’s had only ever been seen in grainy satellite photos, leading many across the Galaxy to believe that they did not exist.

Sand Demon’s were said to be able to swim under the deserts as easily as water, and were known for their extensive periods of hybernation where they would shed their skin, and as they shed let ungodly amounts of blood flow from their shell. This blood was prized in Tusken folk lore as the ‘Demon Blood Ritual’, this ritual was often performed by explorative Jedi wishing to gain enlightenment through meditation whilst covered in the Sand Demon’s blood, believing it to have special influences on them.
Known successors of the Demon Blood Ritual include Jaesa Willsaam and the Wrath (Sith Warrior).

The Sand Demon was also believed by Tusken folklore to drain the Life Essence of their victims, in which the creatures would siphon life out of their victims, which allowed the Sand Demon to regenerate and extend their life to the point that they were believed to become immune to all injury.

The Sand Demon appeared visually similar, near identical to the Lylek, a creature from Ryloth that originated in the 1990’s, the difference being that Lylek’s sport tentacles and Sand Demon’s do not.

Sources:
Sand Demon – Star Wars the Old Republic – Tatooine Sith Warrior Storyline
Lylek – Star Wars: X-Wing Rogue Squadron: Battleground: Tatooine