Besides the continued downturn in the broader cryptocurrency market, on-chain memes have also lost steam. Compared to the same period last year, the activity has notably cooled down. However, a few non-tokenized projects have caught the attention of enthusiasts, with Story Protocol—which recently announced an $80 million funding round led by prominent venture capital firm a16z—being the most closely watched.

This week, CryptoSnap’s Dr. DODO is here to take you through what Story Protocol is all about!

Source: https://x.com/StoryProtocol/status/1815429614208250134/photo/1

Funding and Background

Introducing Story Protocol would be incomplete without discussing its powerful background. Recently, Programmable IP (PIP) Labs, the developer behind Story Protocol, announced the completion of an $80 million Series B funding round. This round was led by the renowned venture capital firm a16z Crypto, with participation from Polychain Capital and others. Notably, the angel investor lineup is equally impressive, including key figures like Scott Trowbridge, Senior Vice President and Board Member of Stability AI; Adrian Cheng, billionaire and founder of K11; and digital art collector Cozomo de’ Medici.

This latest funding follows a $54 million Series A round from last year, bringing PIP Labs’ total fundraising to an astounding $140 million. The company’s valuation now stands at $2.25 billion.

The team behind Story Protocol also has a noteworthy pedigree. SY (Seung Yoon) Lee, CEO and founder of PIP Labs, brings a wealth of entrepreneurial experience and industry insight. He previously founded the mobile storytelling platform Radish, which was acquired by South Korean communication giant Kakao for $440 million. After the acquisition, Lee served as Kakao’s Global Strategy Officer, overseeing the company’s global investments and mergers & acquisitions. Additionally, he is a venture partner at Hashed, South Korea’s largest blockchain fund.

Core Technology: A Blockchain Solution Redefining IP Management

The core objective of Story Protocol is to revolutionize the way intellectual property (IP) is managed by leveraging blockchain technology, making the legal framework for creative IP more efficient, transparent, and user-friendly. Its foundation is built on three key components:

1. Story Network: A Layer 1 blockchain specifically designed for IP management.
2. Proof of Creativity Protocol: A smart contract system that allows creators to register their IP as “IP assets.”
3. Programmable IP License (PIL): A bridge that connects on-chain IP with real-world legal contracts.

Story Protocol chose to develop its own blockchain rather than operate on an existing one for several reasons:

First, IP management involves a complex network of relationships, requiring efficient graph data processing capabilities. Existing blockchains face performance bottlenecks when handling large-scale, intricate IP relationships. By building its own Layer 1 (L1) blockchain, Story Protocol can optimize its underlying architecture to enhance the efficiency of IP graph traversal and storage.

Second, Story Protocol aims to become a global settlement layer for IP, enabling cross-chain IP composability. Having a dedicated L1 allows it to provide a unified hub for all registered IP.

This dedicated infrastructure positions Story Protocol as a groundbreaking solution for streamlining the management and monetization of creative IP on a global scale.

Source: https://learn.story.foundation/

Ecosystem Operation: Innovative Mechanism for IP Management and Protection

Within the Story Protocol ecosystem, creators can register their IP as an IP asset and set specific usage terms. Other creators can directly view these terms on the blockchain, and if they agree, they can instantly obtain authorization and begin creating. When derivative works generate revenue, smart contracts automatically distribute royalties based on the predefined terms, ensuring the entire process is transparent, efficient, and free from intermediaries.

Let’s use a concrete example to better understand how Story Protocol operates. Imagine an animator named Alice creates an adorable cartoon character. In the traditional system, if another artist, Bob, wanted to use this character for a short film, he would need to contact Alice and might have to hire lawyers to draft a complex licensing agreement. This process could take weeks or even months.

In Story Protocol’s ecosystem, however, Alice can register her cartoon character as an IP asset and set usage terms, such as allowing non-commercial use for free or charging a 5% royalty for commercial use. Bob can directly view these terms on-chain, and if he agrees, he can immediately get authorization and start creating. When Bob’s short film starts generating revenue, the smart contract will automatically distribute the 5% royalty to Alice, making the entire process significantly more efficient than traditional methods.

Story Protocol also incorporates an on-chain dispute resolution mechanism to address IP infringement issues. If someone uses an IP without authorization, community members can raise a dispute on the blockchain. If the dispute is valid, the content will be flagged, preventing further licensing or revenue generation. Moreover, by connecting the Programmable IP License (PIL) with real-world legal systems, creators retain the right to pursue legal action if necessary.

This approach offers a streamlined, transparent, and secure solution for managing and protecting intellectual property in a decentralized ecosystem.

Source: https://learn.story.foundation/

Vision and Outlook: Building the Future of a Global IP Ecosystem

The vision of Story Protocol is to create a global IP repository and trading system, enabling creators to build narrative universes from the ground up. It also plans to allow major content platforms like Netflix and TikTok to operate validator nodes, directly transmitting IP data on-chain, thereby fostering a fairer and more transparent content ecosystem.

Current Status of Story Protocol

At present, the Story Protocol mainnet has not yet launched, but its testnet is already available for early experimentation. Interested users can add the testnet to their MetaMask wallets, claim faucet tokens ($IP), and register their own IP assets. Afterward, users can trade assets on the Colormp marketplace or add liquidity to the assets on PiperX. Additionally, platforms like Layer3 offer tasks related to Story Protocol that participants can engage with to explore the system further.

Author’s Perspective

Story Protocol is one of the most intriguing projects I’ve seen recently. Unlike many current networks that emphasize high performance and throughput, Story Protocol’s Layer 1 blockchain has a very clear function, specifically addressing the inefficiencies in today’s IP licensing models and outlining how blockchain can solve these pain points. From the NFT boom in the last cycle to the current Memecoin craze, it’s clear that IP is an incredibly valuable asset.

As the digital creative industry continues to grow, the importance of IP management becomes more prominent. Story Protocol’s innovative solution could serve as a key bridge between creativity, technology, and law, injecting new energy into the global creative industry. Although there is still a long road ahead, Story Protocol’s innovative vision undoubtedly points to a hopeful future for intellectual property management.

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