Story Protocol rebrands, pivots to AI data after 98% token plunge

Story Protocol, a blockchain project focused on intellectual property that had raised $140 million in startup funds, announced a major pivot after a 98% plunge in its token price, with an admission that the initial strategy didn't work.

The project has transitioned to DATA Foundation and refocused on AI training data, citing rising demand from AI companies for rights-cleared datasets, The Block reported on June 25. The foundation also launched Trace, an on-chain registry and audit platform for training data, alongside an integration with the marketplace Kled that brings more than 1.5 billion user-contributed records onto the DATA network.

The announcement marks a dramatic comedown for a project that had been showered with money by major venture capital firms. The latest round came in 2024, when the high-profile firm Andreessen Horowitz (a16z) led an $80 million round, assisted by the well-heeled crypto-focused VC firm Polychain Capital.

Lesson learned

As reported by Yogita Khatri for the outlet:

According to DATA Foundation, AI developers are increasingly running into shortages of high-quality training data as much of the publicly available internet has already been scraped. At the same time, AI companies face growing legal and regulatory scrutiny over whether their training data was collected with proper consent and licensing.

Story co-founder Andrea Muttoni has become CEO of DATA Foundation, while Kled founder Avi Patel joins as chief data officer. The foundation said Story's native IP token will migrate to a new DATA token on a one-to-one basis, with existing holders needing to take no action, the article stated.

In a post on X, Muttoni wrote that the team "set out to build the IP layer for the internet, a place where all IP becomes a programmable and permissionlessly licensable asset."

Instead, they learned the "lesson" that "companies behind the most valuable music, games, and brands guard their most valuable IPs jealously, and the open nature of permissionless licensing clashed with the very control the companies want to keep."