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Story Protocol has delayed its first major token unlock by six months, pushing the release of team and investor tokens to August as the blockchain’s onchain revenue has fallen to near zero from a September peak of $43,000 daily, according to DeFiLlama data.
Co-founder SY Lee defended the decision as a signal of long-term commitment rather than financial distress, even as the project pivots toward AI data licensing amid mounting questions about its business model.
Lee framed the IP token unlock delay as a deliberate signal to the market that insiders are willing to wait alongside users. He pointed to Worldcoin’s 2024 decision to extend team and investor vesting schedules from three to five years, a move that temporarily reduced circulating supply and was widely interpreted as an effort to strengthen long-term alignment.
“If we were all mercenary, we would have wanted a shorter lockup,” Lee said. “Extending it is a way to show that we’re committed to building something durable, not extracting liquidity at the first opportunity.”
In Worldcoin’s case, the announcement was followed by double-digit token gains in the hours that followed. Lee cautioned that Story is not seeking a similar price reaction, but said the logic behind the IP token unlock delay is comparable: slow supply growth while fundamentals catch up.
Investor concern has largely centered on Story’s onchain revenue, which data from DeFiLlama shows peaked at roughly $43,000 per day in September 2025 before falling to near zero in recent months. Critics argue that the IP token unlock delay masks weak usage at a time when market conditions are already fragile.
Lee rejected that framing, saying onchain gas fees are the wrong metric for a network designed around intellectual-property enforcement rather than decentralized finance.
“We intentionally set our gas fees very low,” he explained. “We’re more of an IP chain. You shouldn’t expect the same revenue profile as a DeFi protocol.”
According to Lee, much of Story’s expected monetization occurs offchain through licensing agreements, not through transaction tolls. That structure, he said, naturally delays visible onchain income, even as backend activity increases.
The IP token unlock delay coincides with a strategic pivot that narrows Story’s focus. Instead of tokenizing media content or collectibles, the protocol is now prioritizing rights-cleared datasets for training AI models.
These datasets include multilingual voice samples, first-person video, and other forms of human-generated data that Lee describes as “unscrapable” — assets that cannot be easily or legally sourced through traditional web scraping.
“The future bottleneck for AI isn’t compute, it’s clean, licensed data,” Lee said. “We’re building the rails to manage ownership and usage terms for that data at scale.”
Payments and royalty splits, he added, are embedded into smart contracts but may not immediately translate into visible onchain revenue, reinforcing why the IP token unlock delay is meant to align supply with a longer commercialization timeline.
Lee drew comparisons to his previous Web2 startup experience, which resulted in a $440 million exit in 2021. In that case, he said, years passed before the company generated meaningful revenue, despite heavy early investment in infrastructure.
“That experience taught me that building real businesses takes time,” Lee said. “Token markets often expect instant validation, but infrastructure doesn’t work that way.”
From that perspective, the IP token unlock delay is less about market timing and more about preventing premature liquidity from distorting incentives while Story attempts to secure enterprise partnerships in the AI sector.
For token holders, the immediate effect of the IP token unlock delay is a slower expansion of circulating supply, which can reduce near-term selling pressure. However, it also raises the bar for execution, as the team must now demonstrate tangible progress in AI data partnerships before additional tokens enter the market.
Analysts note that delayed unlocks are increasingly common among infrastructure-focused crypto projects, particularly those targeting enterprise use cases rather than retail speculation. Still, skeptics argue that repeated extensions can erode trust if not paired with measurable milestones.
Lee acknowledged the risk but maintained that accelerating unlocks in a weak market would be more damaging.
“Rushing liquidity into a system that isn’t ready doesn’t help anyone,” he said.
Whether the IP token unlock delay ultimately proves to be a prudent governance decision or a deferral of hard questions remains unresolved. Much depends on Story’s ability to convert its AI data thesis into sustained licensing demand.
What Lee is clear about is the time horizon.
“The best founders, the best teams, the best companies usually do this for a decade or more,” he said. “We’re in it for the long term and longer innings.”
As crypto markets continue to scrutinize token economics more closely, Story’s approach underscores a broader shift: supply discipline and patience are increasingly becoming as important as technical ambition.
