🧞 Inside the Story switch

From Zhao’s post to token moves: the facts, the problems, the fallout

Aug 25, 2025

Gm and happy Monday frens 🌞

Crypto never sleeps, and this week’s plot twist is at Story Protocol. Co-founder Jason Zhao is stepping back from his full-time role, SY Lee is taking the wheel, and CT is split between “meh” and “rug?”.

We sifted through the noise and pulled together a clear rundown of what changed, why it happened, and what the numbers actually say about usage vs. valuation.

In this deep dive, you’ll get the quick timeline, who’s running things now, the token deal that raised eyebrows, and the smartest takes from across the space, so you can decide what’s signal and what’s smoke.

Today, we explore:

💰 Crisis of Story
🧵 ZK Digest, Polkadot ideas and gas abstraction
📰 News

🔮 What to do during KBW & Token2049

🚀 dApps & Mini-Apps Day
A full day of keynotes, panels, workshops, and networking on dapps and mini-apps.

Messenger-agnostic - covering Line, Kakao, Farcaster, and more!

Seoul, September 22

🌎 Real-World Adoption Day
Explore how Web3 is revolutionizing finance for institutions and enterprises.

Panels, showcases, and top networking with 350+ leaders and 20+ speakers.

Singapore, September 30

🧠 Agents Day

The Agentic Web is not a far-off vision — it’s happening right now.

Agents Day is where AI meets crypto to enable autonomous systems without gatekeepers.

Singapore, October 1

Check out the calendar

🛠️ Deep-dive: The troubles with Story

On August 16–17, 2025, Story Protocol co-founder Jason Zhao said he’s leaving his full-time role to focus on a new AI project called Poseidon. He’s not disappearing entirely—he’ll stay on as a strategic advisor—while fellow co-founder SY (Seung-Yoon) Lee takes over day-to-day leadership as CEO. Around the time of the announcement, Story’s IP token barely budged, with CoinDesk noting it sat a little above $5.80, roughly +2% on the day.

Short story of Story

Story is a blockchain project built around a simple idea: let people register their intellectual property on chain and set the rules for how it can be used.

The network and the IP token went live on February 13, 2025.

Before that, the project’s core developer (PIP Labs) raised an $80M Series B led by a16z in August 2024; altogether, reporting puts Story’s total funding north of $130M.

What happened

Zhao’s post said that after three and a half years building Story, he’s stepping back to concentrate on Poseidon, which he describes as applying AI to areas like science and space. He’ll remain an advisor to Story.

The company signaled continuity: SY Lee moves into the CEO role, and coverage also mentions Andrea (chief product officer) and Sandeep (chief AI officer).

Problems with Story

The pushback isn’t just about a founder leaving. Unchained highlighted how little on-chain activity the project has seen so far: about $26,652 in lifetime chain fees, and $23 in fees on August 17. These numbers look tiny next to the ~$143M raised and a ~$2.25B valuation cited in prior funding coverage.

The Defiant also emphasized token structure concerns: more than half of the initial supply went to insiders (team/investors/foundation), only ~30% is circulating, and there are large unlocks ahead.

On top of that, a high-profile corporate deal added fuel to the debate: Nasdaq-listed Heritage Distilling announced a $220M private placement tied to a $360M IP-token reserve, including $82M to buy IP at $3.40 per token from Story Foundation, and the foundation said it would use the cash to repurchase IP on the open market within 90 days.

Critics read those terms and the timing as bad optics; supporters call it a liquidity and visibility win.

Reactions

Reactions split fast. On X, industry figures like Anthony Sassano and Adam Cochran blasted the move, arguing that big-name backers funded flash over substance while real usage lagged.

Others pointed to the small price move as a sign the market wasn’t panicking, and noted Zhao isn’t fully gone.

Depending on when you looked, the token was either down a touch on the day (The Defiant) or up a couple of percent (CoinDesk), which mostly underscored that sentiment, not price, was the real story.