The recent departure of Jason Zhao as full-time CEO of Story Protocol marks a significant shift for the blockchain-based intellectual property (IP) venture, which is valued at approximately $2 billion yet reportedly generates only about $45 daily in transaction fees. Zhao, who led the company for nearly three and a half years, shifted to a strategic advisor role on August 17, 2025, maintaining involvement through partnerships and investments. His successor, co-founder S.Y. Lee, now leads the company alongside Chief Product Officer Andrea and Chief AI Officer Sandeep, signaling an intended new phase in the protocol’s development. Despite the leadership change, the market exhibited relative stability, with the Story Protocol IP token seeing slight gains following Zhao’s exit announcement. The project’s minimal utility has been a focal point of criticism, with only $45 in fees collected over 24 hours despite claims of tokenizing $61 trillion in intellectual property assets.
Jason Zhao steps down as Story Protocol CEO, passing leadership to co-founder S.Y. Lee amid steady token performance.
Story Protocol has attracted over $130 million in funding from prominent venture capital firms such as Andreessen Horowitz (a16z), positioning itself as an ambitious on-chain platform aiming to revolutionize IP management by enabling creators to register, monitor, and monetize diverse works, including books, films, music, and AI-generated content. However, the company faces criticism due to the disparity between its substantial valuation and the modest daily revenue generated from blockchain fees, which stood at roughly $45 at the time of Zhao’s departure. This discrepancy has raised questions about the project’s operational performance and its ability to translate a claimed $61 trillion in tokenized intellectual property assets into meaningful transactional fees. Zhao’s planned transition support includes ongoing assistance through partnerships and investments to ensure continuity.
The departure has prompted widespread skepticism within the crypto community, with accusations of a “soft rug pull” suggesting that Zhao exited after benefiting personally while leaving limited tangible value for stakeholders. Industry commentators have expressed surprise at the underperformance of a project with significant venture backing, highlighting concerns about the protocol’s utility and long-term sustainability. Some community members have described the project as overhyped relative to its on-chain activity, underscoring the challenges of aligning ambitious blockchain visions with practical revenue outcomes.
Zhao’s decision to focus full-time on a new AI-driven initiative called Poseidon, which targets scientific research, biopharma, robotics, and space, reflects his shifting interests, although he remains committed to Story Protocol’s future success through strategic collaboration. The incoming leadership has pledged to advance the original whitepaper’s vision into a second phase, aiming to strengthen the protocol’s ecosystem and address ongoing concerns about its real-world impact. This shift underscores the complexities of scaling blockchain ventures in emerging sectors, where high valuations may not immediately correspond to financial sustainability.
