Why Story Protocol Raised $140 Million to Bring Creator IP Onchain

Story Protocol isn't your average blockchain — mostly because it's not solving your average crypto problem.

Rather, Story has been able to raise $140 million from the likes of a16z and other leading crypto VCs for its solution to an offchain problem that has persisted in leaving billions in value on the table — the problem of intellectual property.

IP, aside from being a thing that's somewhat hard to define, is also a thing that makes any creative project (or creator themselves) powerful. And for basically forever, it's been quite hard for creators to find a way to tap into leveraging or unlocking the IP they own.

Furthermore, as artificial intelligence gets better and better at emulating the IP floating around from existing creators, the risk of not being compensated for any creative output only grows larger with every ChatGPT prompt.

Enter Story Protocol, co-founded by Jason Zhao and S.Y. Lee as an ambitious project to help bring IP onchain in an effort to help creators protect themselves from the risks of AI and help creators unlock existing value from their works. Zhao, whose background includes being the youngest product manager at AI giant DeepMind, sat down with Coinage to share his journey from AI to blockchain and the vision behind Story Protocol.

"It was clear to me that the first thing to be changed by AI would be creativity — images, videos, creative prose," Zhao explained, noting that it would also catch the creator economy flatfooted in preventing AI from emulating any existing human-made creativity.

Case in point, as Coinage has previously covered, it took even less time for AI to emulate one of Drake's songs than it did for Drake himself to go from playing a wheelchair-bound character in Degrassi to becoming a world-famous musician.

Instead, Story is looking to build a way to help creators by giving them control over their intellectual property in a way that is both scalable and transparent. Much like how Shopify enabled a wave of online entrepreneurs, Story aims to do the same for creators.

"We want to give creators the tools to own the IP they produce, license it easily, and monetize it without needing complex legal teams," Zhao said. With Story, creators can set the terms of how others use their IP and be rewarded when their work is expanded upon.

A key differentiator for Story Protocol is its ability to integrate smart contracts that map directly to offchain legal agreements. Zhao emphasized the importance of building a system that not only automates the process but also ensures legal protection. "Our smart contracts are backed one-to-one by legal contracts, so creators can feel confident their IP is protected, even when dealing with major studios," Zhao added.

To be clear, Story Protocol still has a long ways to go. It only recently entered its testnet phase, with the Iliad testnet going live in August. A mainnet launch is expected by early 2025, marking a significant step toward bringing Story’s vision to life. Until then, Zhao is focused on attracting the next generation of consumer entrepreneurs, believing that the success of Story Protocol hinges on killer use cases that demonstrate its potential.

"As I was starting to explore the space, everything was about money. It was Bitcoin as digital gold, it was stablecoins as this global payment rails, and that's really exciting but ultimately ... people don't really spend all their time on Charles Schwab or their bank accounts watching stuff go up and down," he said. "That's that's just not a typical thing people do. People will spend hours — 4 or 5, 6, 7 hours a day on TikTok, Netflix, YouTube, creating and consuming culture."

As Story Protocol prepares for its next phase, Zhao remains laser-focused on building the infrastructure that will enable decentralized IP ownership. "If we're going to be successful in the long run, the blockchain element needs to be invisible, like how HTTPS or the Domain Name System works behind the scenes," Zhao said, hinting at a future where blockchain underpins creativity without users even realizing it.

With backing from major investors like a16z, Story Protocol is poised to bring the world of IP into the era of Web3. By putting creators in control and leveraging blockchain to streamline IP licensing, Story Protocol is setting the stage for a new wave of creative entrepreneurship.

As Zhao put it, "We have an enormous opportunity to make IP a platform, a network, where everyone can win together."

Coinage members can watch our full episode with Jason Zhao above. To support our community-owned outlet, own it with us, and unlock other exclusive benefits, mint one of our Membership Passes today or Stake with us today! Chat with Coinage in our Discord.