Why is a16z willing to invest $80 million in Story Protocol?
To understand the potential of Story Protocol, it is crucial to recognize how it differs from other blockchain projects.Original source: CREDIT SCEND X account
Author: CREDIT SCEND
Compilation: Deep Tide TechFlow
Disclaimer: We have not had direct contact with anyone from Story Protocol. The views shared here stem from discussions with legal experts and industry peers.
Our initial impression of StoryProtocol is that it might just be another Layer 1 (L1) blockchain. It wasn't until we learned that a16zcrypto is leading an $80 million Series B investment round that we took notice, prompting us to delve deeper into why investors support this project and how ordinary investors can get involved.
What Makes Story Protocol Unique?
To understand the potential of Story Protocol, it is crucial to recognize how it differs from other blockchain projects. Unlike many L1 blockchains that emphasize speed or security, Story Protocol positions itself as a blockchain for legal contracts, with a particular focus on intellectual property (IP) protection.
As of this writing, the testnet has just been released, so there are limited details regarding the technology. However, we believe that the technology itself is not the main differentiator—it just needs to work effectively. The real value proposition lies in its target market and application scenarios.
Target Users: Content Creators and Legal Professionals
Story Protocol is designed for content creators. Imagine being a songwriter distributing music on platforms like Spotify or YouTube, but uncertain about the ownership of your intellectual property. Story Protocol allows creators to record timestamped information on the blockchain, verifying that they created and uploaded the content. This could bring about significant changes in protecting creators from legal disputes.
Legal professionals may also adopt this technology. Currently, the process of proving the creation of intellectual property involves maintaining physical copies and notifying various parties and jurisdictions—this is a time-consuming and fragmented process. With Story Protocol, the creation of intellectual property can be timestamped on the blockchain, providing reliable evidence for legal proceedings. In an optimistic scenario, law firms may begin to standardize digital IP registration on Story Protocol, streamlining and securing the process.
In this ecosystem, lawyers will not be replaced—they will be empowered. Story Protocol could become an essential tool in their toolbox, providing incentives to adopt and integrate this new standard into their practices.
Why Are Investors Interested?
A closer look at the team behind Story Protocol can explain why investors are eager to get involved. The project is led by three individuals named Jason, all of whom have impressive credentials:
storysylee Seung Yoon "SY" Lee (Jason), CEO: Successfully sold a webcomic and web novel publishing business valued at $440 million.
JasonLLevy Jason Levy, COO: Developed a top gamified storytelling app with over 200 million downloads and $100 million in revenue.
jasonjzhao Jason Zhao, Protocol Lead: Former product manager at DeepMind with expertise in artificial intelligence.
The collective experience of this team in publishing, marketing, and artificial intelligence enables them to adapt flexibly to evolving fields such as infrastructure, consumer products, gaming, and AI—areas that are highly regarded for their revenue potential in web3. This multidisciplinary expertise makes the team particularly appealing as they can adapt to market narratives.
Controversial Views
Do they need smart contract developers? Not necessarily. Unlike other L1 blockchains, Story Protocol is less reliant on decentralized finance (DeFi) or trading. The primary focus will be on consumer application developers integrating with Story Protocol. In an already saturated blockchain developer market, many developers are replicating existing code, so the emphasis will be on innovation and practicality.
Potential Exit Strategies for Early Investors
How does Story Protocol provide returns for its early investors?
An initial public offering (IPO) is the most likely exit strategy. We do not believe it will achieve a 10x Series B valuation return through tokenization. In fact, Story Protocol is likely to avoid tokenization to sidestep legal scrutiny and concerns that may deter intellectual property creators from using the platform. Following a path similar to Coinbase, an IPO could provide the necessary capital to refine its revenue model before considering tokenization.
How can ordinary investors get involved?
If you are not in the legal field or a content creator, your journey with Story Protocol may be limited. Story Protocol does not intend to incentivize liquidity mining, as it is not a DeFi chain. Instead, the focus is on bringing in distribution platform partnerships to create broader opportunities.
Currently, the top three partners or projects funded by Story Protocol have no plans to issue tokens. However, it is crucial to monitor how they allocate grants to development teams, as this could signal future opportunities.
Story Protocol is also building a strong narrative for itself and has secured robust funding. We advise caution when investing in other protocols attempting to compete with Story Protocol unless they possess both expertise and capital to compete effectively.
Is there a Beta trade?
A potential opportunity could be investing in a hypothetical meme token named $JASON if it were to go public. However, given the current information, this remains a speculative opportunity. Good luck!
