diff --git a/images/wrenn-init.sh b/images/wrenn-init.sh
index 8a9e22e..b05a08b 100644
--- a/images/wrenn-init.sh
+++ b/images/wrenn-init.sh
@@ -18,8 +18,8 @@ mount -t cgroup2 cgroup2 /sys/fs/cgroup 2>/dev/null || true
 echo "+cpu +memory +io" > /sys/fs/cgroup/cgroup.subtree_control 2>/dev/null || true
 
 # Set hostname and make it resolvable (sudo requires this).
-hostname sandbox
-echo "127.0.0.1 sandbox" >> /etc/hosts
+hostname capsule
+echo "127.0.0.1 capsule" >> /etc/hosts
 
 # Configure networking if the kernel ip= boot arg did not already set it up.
 if ! ip addr show eth0 2>/dev/null | grep -q "169.254.0.21"; then
diff --git a/internal/vm/config.go b/internal/vm/config.go
index 0c1f258..ea229b6 100644
--- a/internal/vm/config.go
+++ b/internal/vm/config.go
@@ -90,7 +90,7 @@ func (c *VMConfig) applyDefaults() {
 // kernelArgs builds the kernel command line for the VM.
 func (c *VMConfig) kernelArgs() string {
 	// ip= format: <client-ip>::<gw-ip>:<netmask>:<hostname>:<iface>:<autoconf>
-	ipArg := fmt.Sprintf("ip=%s::%s:%s:sandbox:eth0:off",
+	ipArg := fmt.Sprintf("ip=%s::%s:%s:capsule:eth0:off",
 		c.GuestIP, c.GatewayIP, c.NetMask,
 	)