Author: CREDIT SCEND
Compiled by: TechFlow
Disclaimer: We have not engaged directly with anyone at Story Protocol. The opinions shared here are derived from discussions with legal experts and industry peers.
Our initial impression of StoryProtocol was that it might just be another layer 1 (L1) blockchain. It wasn’t until we learned that a16zcrypto was leading an $80 million Series B investment round that it caught our attention, prompting us to take a deeper look at why investors were backing this project and how regular investors can get involved.
What is unique about Story Protocol?
The key to understanding the potential of Story Protocol is to recognize how it differs from other blockchain projects. Unlike many L1 blockchains that emphasize speed or security, Story Protocol is positioned as a blockchain for legal contracts, with a special focus on intellectual property (IP) protection.
As of this writing, the testnet has just been launched, so details on the technology are limited. 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 use cases.
Target users: Content creators and legal professionals
Story Protocol is built for content creators. Imagine being a songwriter who distributes music on platforms like Spotify or YouTube, but is uncertain about ownership of the intellectual property. Story Protocol allows creators to record time-stamped information on the blockchain, verifying that they created and uploaded the content. This could bring about a sea change 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 - a time-consuming and fragmented process. With Story Protocol, the creation of intellectual property can be time-stamped on the blockchain, providing reliable evidence for legal proceedings. The optimistic scenario is that law firms will begin to standardize digital intellectual property registrations on Story Protocol, thereby simplifying and securing the process.
In this ecosystem, lawyers are not replaced — they are empowered. Story Protocol could become an important tool in their toolbox, providing incentives to adopt and integrate this new standard into their practice.
Why are investors interested?
A closer look at the team behind Story Protocol shows why investors are eager to get involved. The project is led by three people named Jason, all of whom have impressive credentials:
storysylee Seung Yoon “SY” Lee (Jason), CEO: Successfully sold a $440 million webtoon and web fiction publishing business.
JasonLLevy Jason Levy, COO: Built a top-tier gamified storytelling app with over 200 million downloads and $100 million in revenue.
jasonjzhao Jason Zhao, Protocol Lead: Former DeepMind Product Manager with expertise in AI.
The team’s collective experience in distribution, marketing, and AI gives them the flexibility to address evolving sectors such as infrastructure, consumer products, gaming, and AI — sectors that are receiving high attention for their revenue potential in web3. This multidisciplinary expertise makes the team particularly sought-after as they are able to adapt to market narratives.
Controversial Views
Do they need smart contract developers? Not really. Unlike other L1 blockchains, Story Protocol is not heavily reliant on decentralized finance (DeFi) or trading. The main focus will be on consumer application developers building integrations with Story Protocol. In this already saturated blockchain developer market, many developers are copying existing code, so the focus will be on innovation and practicality.
Potential exit strategies for early investors
How does Story Protocol provide returns to its early investors?
An IPO is the most likely exit strategy. We do not expect it to achieve a 10x return on its Series B valuation through tokenization. In fact, Story Protocol will likely avoid tokenization to circumvent legal scrutiny and concerns that could discourage IP creators from using the platform. Taking a Coinbase-like path, an IPO could provide the necessary funding to perfect its revenue model before considering tokenization.
How can ordinary investors participate?
If you are not in the legal field or are not a content creator, your journey with Story Protocol will be limited. Story Protocol does not intend to incentivize liquidity mining because it is not a DeFi chain. Instead, the focus is on introducing distribution platform cooperation to create broader opportunities.
Currently, the first three partners or projects funded by Story Protocol have no plans to issue tokens. However, it will be important to monitor how they distribute grants to development teams as this may indicate future opportunities.
Story Protocol is also building a strong narrative on its own and has strong financial backing. We recommend caution when investing in other protocols that attempt to compete with Story Protocol unless they have both the expertise and capital to compete effectively.
Are there beta transactions?
One potential opportunity could be to invest in a hypothetical meme token called $JASON , if it ever does come to market. However, given the current information, this remains a speculative opportunity. Good luck!
