Story Faces Community Backlash Following Jason Zhao’s Departure

Story, a blockchain platform for programmable intellectual property (IP) with $23 million in total value locked, is drawing criticism from the crypto community following co-founder and CEO Jason Zhao’s announcement that he is stepping down after three and a half years with the project.

Zhao said on X on Aug. 16 that his decision allows him to concentrate on Poseidon, a venture applying artificial intelligence (AI) to industries like science and space.

Following the news, Story’s native token, IP, is trading at $5.70, down 2% on the day and over 11% on the week, according to CoinGecko.

Under Zhao, Story grew from a whiteboard sketch into a platform supporting IP from brands such as Balmain and BTS, and attracted more than $130 million in funding from investors including Andreessen Horowitz (a16z), he revealed in the post. The protocol has also facilitated nearly 44 million transactions to date, according to Story Blockchain.

Despite these achievements, some in the crypto community remain skeptical of Story.

Adam Cochran, a partner at Cinneamhain Ventures (CEHV), an activist venture capital firm, criticized Story in a detailed thread. Cochrain called it an example of a “tier 1 backed VC company” where founders with prestigious backgrounds raise large sums, hire roles like a chief AI officer for a non-AI startup, have few users, exit via over-the-counter deals, and “step back” right before vesting renews.

Cochran noted that Story made only $24 in revenue on Aug. 15 and argued that industry expertise is often overlooked in favor of flashy presentations to top VCs. The protocol brought in just $23 in revenue the past 24 hours, per DeFiLlama. Despite this, IP currently ​​boasts a fully diluted valuation (FDV) of nearly $6 billion.

“Founders who know their industry inside and out, aren’t flash in the pan and spent decades in their field, get passed over for the next Stanford kid with buzzwords who puts on a show,” Cochran said. “The pitch has also never made sense to anyone who has actually worked with IP licensing.”

Popular crypto trader @cryptopathic, who previously worked with Own the Doge, also criticized Story’s platform, saying it “would be essentially impossible to work with Story without locking ourselves into their framework” and adding that they were “not aware of anyone in this industry who has benefitted from their platform.”

Meanwhile, X user @SmokeyTheBera – an account associated with Berachain – speculated that Zhao was “lowkey pushed out gracefully to avoid a larger problem in a face saving manner.”

While Seung‑Yoon Lee is expected to replace Zhao as CEO, the Story co-founder will remain a strategic advisor.

The announcement comes just weeks after Grayscale, one of the largest crypto-focused asset managers, announced an investment trust for IP. The new investment vehicle is designed to give accredited investors direct access to Story’s token, at a time when the global intellectual property market is estimated to be worth over $80 trillion.

The IP token launched in February – notably, more than 50% of the initial token distribution was allocated to the team, early investors, and foundation.

Only around 30% of the IP supply is currently in circulation, with significant token unlocks on the horizon.