Story Protocol co-founder S.Y. Lee defended the project’s decision to delay its first major IP token unlock until August, arguing the blockchain needs more time to build meaningful usage and that onchain revenue is a misleading measure for an intellectual-property and AI data network.
The six-month delay keeps team and investor tokens locked as Story shifts strategy, moving away from a broad IP registry toward licensing human-generated datasets for artificial intelligence training. Story Protocol is a blockchain designed to manage intellectual property ownership, provenance and usage rights.
In an interview with CoinDesk, Lee cited Worldcoin’s 2024 decision to extend team and investor lockups from three to five years as a precedent. That move reduced near-term token supply and was framed as lengthening the project’s development runway, with Worldcoin’s token posting double-digit gains shortly after the announcement. Story’s decision follows the same logic, Lee said.
“If we were all mercenary, we would have wanted a shorter lockup,” Lee said, describing the extension as a signal of long-term commitment rather than a response to distress.
Investor concerns have focused in part on Story’s revenue profile. According to DeFiLlama, the network’s daily revenue peaked at about $43,000 in September 2025 and currently sits at zero. Lee said those figures understate activity because Story’s intended monetization largely occurs offchain through licensing agreements, not transaction fees.
In his view, gas revenue is a lagging indicator for a blockchain built to register IP rights and usage terms before extracting value from them. “We intentionally put our chain gas fee pretty low. We’re more of an IP chain,” Lee said. “You may not see the type of revenue stream that you’re looking for like a DeFi chain.”
Instead, Story is focused on embedding ownership terms, usage rights and royalty splits for datasets and AI models directly into smart contracts, a direction the project announced last year. The shift moves Story away from tokenized media and collectibles toward what Lee described as “unscrapable” human-contributed data, such as multilingual voice recordings and first-person video, which he argues are difficult for AI developers to obtain legally at scale through traditional web scraping.
That transition delays visible onchain income, as much of the anticipated value is tied to enterprise licensing deals rather than retail transaction fees. Lee compared the timeline to his previous Web2 startup experience, which culminated in a $440 million exit in 2021, noting that it took years for meaningful revenue to emerge.
For token holders, the immediate effect is a slower expansion of circulating supply while the team works to demonstrate traction in AI data partnerships and rights-cleared dataset collection. Whether the strategy translates into a sustainable business remains uncertain, but Lee said extending vesting schedules is preferable to pushing liquidity into weak market conditions.
“The best founders, the best teams, the best companies usually do it for a decade plus,” Lee said. “We’re in it for the long term and longer innings.”
