Story Protocol turns the page with intellectual property token launch
Story Protocol’s sovereign layer-1 targets blockchain-native intellectual property monetization including AI
Story Protocol and Adobe stock modified by Blockworks
Story is a sovereign layer-1 blockchain built using the Cosmos SDK and CometBFT consensus, with an added EVM execution — a custom Geth fork. This choice allows for full governance control, optimized execution for intellectual property workflows and a staking economy based on the $IP token.
Standard blockchain environments — even high-performance chains like Solana — struggle with modeling the recursive licensing structures that intellectual property ecosystems require, the team said. Story’s unique graph-based architecture is specifically designed to handle the complex relationships between intellectual property assets, the team said.
While Story Protocol’s vision of a graph-based intellectual property economy is ambitious, its decision to launch an entirely new layer-1 with its own token instead of, say, a validium rollup, is worth scrutinizing.
Many projects claim to need a custom execution environment, only to ascribe an L1 premium to their tokens. Could Story not have built this as a rollup with a purpose-built intellectual property layer on top?
The Cosmos SDK grants Story more sovereignty, but at the cost of fragmenting liquidity, security and developer mindshare. Do we really need to bootstrap yet another staking economy? Many similar application-specific chains have struggled to justify their independence beyond token incentives. Rollups benefit from inheriting Ethereum’s deep liquidity and mature validator set, and even Cosmos chains are trending toward greater use of Interchain security.
The role and tokenomics of $IP
$IP serves multiple key functions in the Story ecosystem, according to a blog released today. Such functions include:
- Securing the network: Validators stake $IP to participate in consensus.
- Gas token: $IP is required for all on-chain interactions.
- Governance: Token holders shape the future of Story Protocol through governance decisions.
Story has structured $IP’s supply and distribution to prioritize long-term community participation. The total supply is set at 1 billion $IP, with an initial unlocked supply of 25%.
A portion of $IP is burned with each transaction, potentially reducing supply over time.
‘Fair Launch’ staking
Unlike many token launches that benefit early insiders, Story’s staking mechanism ensures no one earns staking rewards before the community does. February is part of what the protocol is calling the “Singularity Period,” during which users can stake or delegate tokens without earning rewards yet. Only after the “Big Bang” event on March 2 will rewards begin accruing to all participants at the same time.
Public mainnet access is set to launch alongside an initial claim for the community. Importantly, locked tokens will also have their staking rewards locked for a minimum of six months, though that may be extended, a spokesperson told Blockworks.
“We will not allow locked tokens to sell staking rewards anytime soon, and we believe the community should have the ability to set up staking and receive rewards,” the team said.
AI and IPFi
A fascinating prospect is the potential for intellectual property-based DeFi primitives — or IPFi. Teams like Unleash, Verio and Color are already developing marketplaces, restaking mechanisms and lending/borrowing infrastructure for intellectual property-backed assets. The example of Aria securing real TVL on intellectual property, including assets like Justin Bieber’s Peaches, is interesting. However, the real test will come once public mainnet launches.
For now, whether intellectual property assets can be meaningfully used as collateral outside of Story Protocol remains theoretical. That said, LayerZero (LZ) integration means that some form of cross-chain composability will be possible from day one — an indicator that Story’s intellectual property-backed assets could plug into Ethereum-based DeFi protocols if liquidity and demand exists.
The mention of a new DeFi-oriented API leveraging LZRead functionality is intriguing. If Story can abstract complexity and make intellectual property-backed lending as seamless as USDC or wBTC lending, it could position itself as a unique RWA-like collateral class for DeFi lenders. But that’s going to be a mammoth task.
AI meets intellectual property
Story Protocol isn’t just about digitizing intellectual property — it’s building a blockchain-native economy for AI and creativity. By removing intermediaries, enabling automated licensing and supporting agent-based transactions, Story is positioning itself as a fundamental layer for digital ownership.
“The easier you make it to register [intellectual property], the easier you make it to license [intellectual property], the easier you make it to transact on it — the more this turns from an oligarchy into a true marketplace,” Story Foundation president and Roman emperor-styled “Marcus Devrelius” said in a Twitter Space.
Updated Feb. 7, 2025 at 4:55 pm ET: Clarified company role of Marcus Devrelius.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: Unpacking crypto and the markets.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
