The $140 million financing of Story Protocol has been controversial, with co-founders sparking a war of words by "picking a fight" with Monad and Berachain

Author: Frank, PANews

The on-chain intellectual property agreement Story Protocol has become a hot topic in the crypto community after securing a massive $80 million Series B funding round led by a16z crypto, bringing its total funding to $140 million.

On one hand, people are curious about how this on-chain protocol focused on IP protection actually operates. Discussions about whether Story Protocol is overvalued are also rampant. On the other hand, Story's co-founder S.Y. Lee seems to be generating more attention through a war of words.

Combating the Infringement Risks Brought by AI

Story Protocol is a blockchain protocol that allows creators to register their intellectual property to track and monitor usage, ensuring their legal and economic rights are protected. The founding team of Story Protocol hails from South Korea and consists of three co-founders. "SY" Lee serves as CEO; he previously established a mobile serialized novel application called Radish, which was ultimately sold to Kakao for $440 million. Jason Levy serves as COO; he worked as a financial analyst at Apple for five years and founded a mobile entertainment startup called Worlds Between Worlds. Jason Zhao is the protocol lead for Story Protocol; he studied computer science at Stanford University and later researched artificial intelligence at DeepMind, and is currently responsible for the technical development of Story Protocol.

Among Story Protocol's investors, besides a16z crypto, there are also notable investors such as Samsung Next Fund, Adrian Cheng, Executive Director of Chow Tai Fook Group, and dao5. In an article announcing the investment, Chris Dixon, managing partner at a16z crypto, stated: "A wave of new AI-driven search engines provides comprehensive answers instead of directing users to websites. Social networks are increasingly filled with AI-generated images and videos. These AI systems may have been trained on original human-created content but often do not acknowledge or cite their sources. Without attribution or compensation, who will be motivated to publish original works on the open internet?"

Chris Dixon proposed that Story Protocol could achieve, "Creators of original content will be rewarded regardless of how their content is used and distributed. At the same time, the licensing of intellectual property becomes low-friction and standardized, encouraging widespread sharing and collaboration. The goal is to create infrastructure to support a new economic contract between creators and platforms."

It is worth noting that Story's approach to IP protection differs from the NFTs commonly used in the crypto space. "You can put media files on any blockchain! But that’s not IP," Jason Zhao, co-founder of Story Protocol, stated in response to a netizen. He explained that intellectual property (IP) is structured graphically, like code or social networks, but we need to flow value through this graph that may contain thousands of intellectual properties for royalties/remixing/licensing/AI training.

In simple terms, Story's goal is to establish a blockchain network where creators can upload their IPs and track their usage across various network environments (including AI), helping creators earn reasonable returns.

If this goal is achieved, it could indeed disrupt the current creative environment. This may also explain why institutions like a16z crypto choose to invest heavily. However, achieving this goal is not easy; a prerequisite is that mainstream social media platforms also support the Story protocol. In this regard, Jason Zhao mentioned that they have already collaborated with some top Hollywood creators and will announce the details of the collaboration soon.

Regarding the discussions about overvaluation, there are many skeptical voices in the community, suggesting that this might be another overvalued VC coin. 0x12.mint, co-founder of NFTScan Labs, stated: "What Story is doing in the IP space is relatively mature; startup teams don’t have the opportunity. This direction is suitable for teams with strong fundraising capabilities and significant advantages in integrating business resources. Is it worth $1 billion? Personally, I think it is, because the entertainment industry itself has a large scale and growth potential, with even larger consumer volume and good growth space. Recent consumption phenomena in mainland China can be seen, or the emergence of Pop Mart directly confirms this."

Co-founder Provoking Monad and Berachain to Spark Attention?

The funding news for Story Protocol drew the community's attention to another co-founder, S.Y. Lee, who had previously "provoked" other public chains on Twitter.

On July 10, S.Y. Lee mentioned Monad and Berachain while introducing Story, stating in a tweet: "Story seems to be playing a completely different game than other crypto infrastructure participants like Monad and Berachain," and "that old infrastructure is self-satisfied, playing a slightly better technical general blockchain game, or launching another decentralized finance chain or decentralized finance application. EVM parallelization this, new Move language that." This statement seemed to mock projects like Monad and Berachain.

Subsequently, Berachain co-founder Smokey The Bera replied: "A very strange view, but nevertheless, congratulations on your launch."

The two then engaged in a discussion, with S.Y. Lee questioning Smokey The Bera: "What real-world problems have you solved? The industry really needs to move beyond just another 'novel' liquidity guidance mechanism and the self-entertainment of decentralized finance circles." This statement also sparked considerable controversy.

"Sorry, but belittling other major L1s for your own influence is not a good look, especially when trying to gain market presence! If you don't understand a protocol, don't publicly criticize them and then ask what problems it solves; that seems like a foolish rookie mistake!" commented Fable Platform, a Berachain ecosystem project.

However, this war of words was not over; on August 22, after announcing the funding, S.Y. Lee released another long tweet, again mentioning Monad and Berachain: "Last month, we announced our vision to build a global IP blockchain. This elicited some reactions, mainly from @Smokeythebera, @berachain, and some from @monad_xyz," and "I didn't expect such a big controversy. I made a rather obvious point: the industry is too obsessed with 'old infrastructure self-entertainment.' They start defending their 'breakthrough' liquidity proof models and how they 'invented' some incentive mechanisms."

This statement sparked even greater controversy than before. Smokey The Bera responded: "If the main way you promote your product is by looking down on others, then I can only hope you mature in the future."

Mert, founder of the Solana developer platform Helius, also joined the comments, saying, "Aren't you using cometBFT on cosmos sdk + L1? You're actually using the same technology as Berachain while mocking the technology."

Meanwhile, Keone Hon, founder of Monad, seemed more composed, saying, "Congratulations on the successful funding, and best of luck to you and your team!"

Another angel investor from Arbitrum, soby is on xai, commented: "You don't need to belittle others to express your point. Monad and Bera are both opinionated infrastructures with passionate developers solving difficult technical problems."

Additionally, many KOLs expressed their opinions, with most content focusing on criticizing S.Y. Lee for his unfounded accusations against Monad and Berachain.

Moreover, S.Y. Lee's emphasis on Story's regionality also sparked some discussions: "We Koreans are the best in the world when it comes to creativity. Our talent is unparalleled. That's why decentralized finance chains like Terra and ICON waste our time. Intellectual property is more suitable for us. We Koreans are destined to put our stories on-chain."

However, these remarks have made Story one of the hottest projects on Twitter in recent days; controversy always brings traffic. The founder of Four Pillars wrote a piece about S.Y. Lee's background, mentioning that S.Y. Lee was elected president of the debate club at Oxford University, and his first startup, Byline, was a news platform. With expertise in media and debate, S.Y. Lee may be uniquely helping Story gain more attention.

Undoubtedly, the story of Story Protocol seems to have gained the trust of capital, but whether it can earn the trust of creators and users will take time.