Story co-founder backs token unlock delay, citing need for additional development time

Story Protocol co-founder S.Y. Lee said the project’s decision to delay its first major IP token unlock until August is aimed at giving the network more time to build usage, arguing that near-zero onchain revenue is a poor indicator of progress for an intellectual-property and AI data blockchain.

The six-month delay extends lockups for team and investor tokens as Story shifts its focus from a broad IP registry to licensing human-generated datasets used in artificial-intelligence training. Story Protocol is a blockchain designed to record ownership, provenance and usage rights for intellectual property.

Speaking to CoinDesk, Lee pointed to Worldcoin’s 2024 move to lengthen investor and team vesting schedules from three to five years as a precedent. That decision reduced circulating supply and was framed as extending development runway, with the token rising by double digits shortly after the announcement. Story’s approach follows the same rationale, Lee said.

“If we were all mercenary, we would have wanted a shorter lockup,” Lee said, describing the delay as a sign of long-term alignment rather than stress.

Some investors have raised concerns about Story’s lack of onchain revenue. Data from DeFiLlama shows daily revenue peaked at roughly $43,000 in September 2025 and has since fallen to zero. Lee said those figures fail to capture the project’s core business, which centers on offchain licensing agreements rather than transaction fees.

According to Lee, gas revenue is a lagging metric for a network built to establish IP rights before monetizing them. “We intentionally put our chain gas fee pretty low. We’re more of an IP chain,” he said. “You may not see the kind of revenue stream you’d expect from a DeFi chain.”

Instead, Story is prioritizing infrastructure that embeds ownership terms, usage rights and royalty splits into smart contracts for datasets and AI models. The pivot moves the project away from tokenized media and collectibles toward what Lee described as “unscrapable” human-contributed data, such as multilingual voice samples and first-person video, assets that are harder for AI developers to source legally at scale through web scraping.

The shift delays visible onchain income, as much of the anticipated value depends on enterprise licensing deals rather than retail transaction activity. Lee compared the timeline to his previous Web2 startup, which culminated in a $440 million exit in 2021, noting that it took years to generate meaningful revenue.

For token holders, the immediate effect is slower supply expansion while the team works to prove traction in AI data partnerships and rights-cleared dataset collection. Whether that strategy results in a sustainable business remains uncertain, but Lee said extending vesting schedules is preferable to accelerating liquidity in 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.”