Story Protocol (IP): A comprehensive presentation of a blockchain for intellectual property

What is Story Protocol?

Story Protocol is a Layer 1 blockchain built using the CosmosSDK and Cosmos' CometBFT for its consensus mechanism. It is EVM-compatible, meaning that applications and tools developed on Ethereum can be easily deployed on Story Protocol, although they do not function natively as on a standard EVM.

The ambition of Story Protocol is to become the reference blockchain for intellectual property (IP). An IP can represent any identifiable and monetizable creation: a piece of art, a video, a digital identity, an audience, or even a trading technique. Story Protocol thus provides a decentralized infrastructure allowing creators to register, manage, and monetize their works transparently and automatically.

To achieve this, Story introduces the concept of “programmable IP”—just as Ethereum did with “programmable money” (cryptocurrencies). This means that the rights, licenses, and monetization rules for IPs are encoded into smart contracts, enabling automated, transparent, and permissionless management.

The Story Protocol team has solid entrepreneurial and technological experience, particularly in fields related to digital intellectual property:

• Jason Zhao (Co-founder): Former researcher at DeepMind (AI division of Google).
• Seung Yoon Lee (Co-founder): Founder of Radish Fiction (1 million downloads), sold to Kakao Corporation for $440 million.
• Jason Levy (Co-founder): Former director at Pocket Gems (video games, generating up to $100 million per year) and former analyst at Apple, product manager at Amazon.
• Hao Chen (CTO): Former VP of Engineering at Harmony, former software development lead at Amazon.

The project has already enjoyed strong community engagement: during its testnet phase, it recorded approximately 5 million daily transactions and gathered over 19 million active wallets, demonstrating significant pre-mainnet interest.

In total, Story Protocol has raised $134 million across three funding rounds, mainly led by a16z crypto. The seed round in May 2023 raised $29.3 million, the Series A in September 2023 secured $25 million, and finally, the Series B in August 2024 brought in $80 million.

On Thursday, February 13, 2025, Story Protocol announced the launch of Homer, its public mainnet. This event was accompanied by the launch of the IP token via an airdrop, which will be discussed further in this report.

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The Thesis of Story Protocol

The Current Problem with IP

Intellectual property (IP) is at the heart of today’s creative economy. However, in the traditional system, registering and protecting IP often involves lengthy, costly legal procedures, accessible only to those who can afford specialized lawyers.

Furthermore, once a work is shared on the Internet, tracking its derivative uses and enforcing the creator's rights becomes nearly impossible. This leads to a major issue: revenue from derivative works is often distributed opaquely, and original creators are rarely compensated fairly for their contributions.

The rise of artificial intelligence (AI) has amplified these problems. AI models, trained on existing works, blur the lines of copyright law. For instance, Hollywood was recently marked by a screenwriters’ strike protesting the use of their works to train generative models without financial compensation.

Although blockchain technology offers a potential solution, current blockchains are not well-equipped to handle IP management. The primary issues are the enormous storage capacity required and the need to maintain complex relationships between different IPs to ensure fair royalty distribution.

The Solution Proposed by Story Protocol

Story Protocol aims to solve these issues by introducing a decentralized infrastructure where each IP becomes programmable, traceable, and composable. With smart contracts, the rules for using, remixing, and monetizing works are predefined and executed automatically.

Unlike traditional linear blockchains, Story Protocol uses a directed graph structure, where each IP is connected to its derivative works, enhancing information processing. Additionally, a native royalty module ensures that a portion of the revenue generated from derivative works is automatically returned to the original creators, fostering a collaborative ecosystem.

Lastly, Story Protocol’s on-chain licenses are backed by off-chain legal contracts, ensuring their legal validity and compliance with international standards such as the Berne Convention, making these on-chain licenses legally recognized in more than 180 countries.

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Architecture and Technology of Story Protocol

Proof of Creativity & Programmable IP License

At the core of Story Protocol lies the concept of proof of creativity, which consists of two main elements: IP assets, represented as special NFTs called “IP assets,” and various programmable modules covering rights registration, license management, royalties, and dispute resolution. These modules are executed on-chain through smart contracts.

However, to ensure legal protection outside the blockchain, every registered IP must be linked to an off-chain legal contract. This is known as the Programmable IP License (PIL), the first hybrid license model directly imported onto the blockchain.

The PIL ensures that legal documents associated with IPs are recorded on Story Protocol in a transparent, autonomous, and permissionless manner via smart contracts, creating a bridge between on-chain and off-chain worlds. Notably, this license complies with international standards, such as the Berne Convention, guaranteeing worldwide legal recognition.

Note: The programmability of licenses also enables “Liquid Licensing”, a mechanism where licenses themselves become NFTs that can be traded on secondary markets, thereby creating a decentralized licensing marketplace.

Token Bound Account (TBA) & ERC-6551

Within Story Protocol, each IP is represented by an NFT and is linked to a Token Bound Account (TBA), in accordance with the ERC-6551 standard, introduced in May 2023. This standard allows a smart wallet to be bound directly to an NFT.

In other words, the NFT is no longer a simple representation of intellectual property. It becomes a virtual entity capable of holding its own assets (such as tokens and NFTs), performing on-chain interactions (such as licensing and collaborations), and applying its own economic rules (such as royalty payments).

This innovation transforms each IP into a programmable economic entity, capable of automatically collecting royalties or issuing licenses without human intervention.

Key Modules: License, Royalty, and Dispute

License Module: The graph-based architecture of Story Protocol allows each IP to define its own terms and access rights. The license module enables creators to specify the rights attached to their IP (e.g., usage, remixing, commercialization), issue automated licenses as smart contracts, and even participate in secondary markets for licenses through Liquid Licensing.

Royalty Module: Story Protocol allows creators to establish royalty policies between multiple IPs. A minimum royalty percentage from a “parent” IP can automatically apply to all derived IPs. This ensures that derivative works can be used freely as long as royalties are paid to the original creator, maintaining the genealogy of creative works while ensuring efficient and accessible distribution.

For example, a piece of music registered on Story Protocol can automatically distribute royalties among all contributors, including on derivative works such as remixes, live performances, or acoustic versions.

Dispute Module: To secure the network against potential abuses, such as plagiarism, hate content, or illegal use of protected IPs, Story Protocol implements an on-chain dispute module. A dispute can be opened permissionlessly by paying an amount in IP tokens, which is refunded if the dispute is won.

Initially, disputes will be reviewed by the Story Protocol team, with third-party arbitration mechanisms expected in later phases. If an IP loses the dispute, it receives a “tag” marking it as non-compliant. This tag results in the loss of its rights to generate licenses, collect royalties, or be linked to other IPs.

Agent TCP/IP Framework

One of Story Protocol's most significant innovations is the Agent TCP/IP Framework, a system inspired by the Internet’s TCP/IP communication protocol. Developed with contributions from specialized AI organizations such as ai16z (Eliza), Zerebro (Zerepy), and Virtuals, this framework facilitates direct IP transactions between AI agents without human intervention or third-party intermediaries.

The framework’s whitepaper was published on December 16, 2024, outlining how AI agents can autonomously exchange IPs backed by legally binding smart contracts. This innovation recognizes that interactions, content, data, and results produced by AI can themselves be considered intellectual property.

For example, the data on which an AI model named Aixbt was trained—defining its personality and responses—could be autonomously sold by the AI itself to help develop other agents, with royalties automatically distributed through smart contracts.

Another real-world example is Story Protocol’s hiring of the AI agent “Luna” to manage its official X (Twitter) account, with an annual salary of 365,000 USDC. Luna interacts with the community, manages content, and provides a tangible demonstration of the Agent TCP/IP framework’s capabilities in the AI-IP economy.

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Mainnet & Tokenomics

The Story Protocol mainnet, named Homer, was officially launched on February 13, 2025, marking the protocol’s transition into its operational phase. The launch coincided with the Token Generation Event (TGE) of the native token IP, alongside an airdrop rewarding early contributors and testnet participants.

Before the mainnet launch, Story Protocol conducted several community engagement programs:

• The Odyssey Testnet allowed users to explore and test the Story Protocol ecosystem. Although this phase is now complete, it resulted in the minting of hundreds of thousands of NFT badges, distributed to participating users.
• The OG Program introduced a tiered system to recognize and reward community contributions. Roles included: Seekers (Junior OG), awarded to users who actively participated during the program’s initial phases, Adepts (Intermediate OG), given to contributors who made long-term and impactful contributions and Ascendants (Senior OG), reserved for the highest contributors with exclusive rewards and privileges.

Story Protocol also revealed the complete token distribution for IP:

• Community & Ecosystem: 38.4% (airdrops, grants, and ecosystem incentives)
• Early Investors: 21.6% (Seed, Series A, and Series B participants)
• Core Contributors: 20% (team members and developers)
• Initial Incentives: 10% (liquidity incentives and staking programs)
• Story Protocol Foundation: 10% (allocated for ecosystem development)

The project initially attempted to frame the Foundation’s allocation as part of the community distribution, totaling 48.4%. However, the community widely rejected this interpretation, agreeing that only 38.4% of tokens should be considered strictly community-focused.

The token release schedule outlines a gradual unlock mechanism, starting with low emissions during the first 10 months to limit selling pressure. This is followed by an accelerated release phase, with the total supply of 1 billion tokens expected to be fully unlocked within 3 years.

Ahead of its official listing, the IP token was already trading on pre-market platforms at approximately $3.50, implying a Fully Diluted Valuation (FDV) of $3.5 billion, even before public exchange listings.

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Conclusion

The founders of Story Protocol have consistently criticized the lack of purpose in many "generalist" Layer 1 blockchains. With Story Protocol, they aim to create a blockchain with a clear and singular mission: to democratize intellectual property (IP) management, making it more efficient, transparent, and secure.

By introducing the concept of programmable IP, Story Protocol provides creators with powerful tools to protect, monetize, and manage their intellectual property. From the modular architecture to the Agent TCP/IP framework, every component is designed to streamline IP management and foster collaborative creativity.

However, despite the strong utility case for the IP token, the tokenomics has sparked debate—especially regarding the allocation balance between the community and early investors. The project's ability to navigate these concerns will be critical for maintaining community trust and long-term engagement.

In conclusion, Story Protocol stands out as a promising and specialized Layer 1 blockchain, led by a highly qualified team addressing a real-world problem in the creative economy. Its success will depend on adoption by creators, developers, and enterprises, as well as its capacity to uphold a balanced and transparent governance model.