Story co-founder defends token unlock delay, says project needs ‘more time’

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Story co-founder defends token unlock delay, says project needs ‘more time’

In an interview with CoinDesk, S.Y. Lee pointed to Worldcoin’s extended lockups as precedent for longer runways.

By Sam Reynolds|Edited by Shaurya Malwa

Updated Feb 9, 2026, 8:36 a.m. Published Feb 9, 2026, 7:48 a.m.

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PIP Labs CEO and Story Protocol co-founder SY Lee (Provided modified by CoinDesk)

What to know:

• Story Protocol delayed its first major IP token unlock by six months until August, keeping team and investor tokens locked while it builds more usage.
• Co-founder SY Lee argued that near-zero onchain revenue is a misleading metric because Story’s business model centers on offchain licensing of human-generated datasets for AI training rather than gas fees.
• The project is pivoting from tokenized media toward "unscrapable" human-contributed data and enterprise licensing deals, slowing visible onchain income, but aiming to signal long-term commitment and reduce token supply overhang.

Story Protocol co-founder SY Lee defended the project’s decision to push its first major IP token unlock to August, saying the blockchain needs “more time” to build usage and that near-zero onchain revenue is “the wrong metric” for an intellectual-property and AI data network.

The six-month delay keeps team and investor tokens locked as Story pivots from a general IP registry toward licensing human-generated datasets for artificial-intelligence training.

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In an interview with CoinDesk, Lee pointed to Worldcoin’s 2024 decision to extend investor and team lockups from three to five years, a move that reduced near-term circulating supply and was framed as extending the development runway, with the token posting double-digit gains in the hours after the announcement. Story, Lee said, is following the same logic.

“If we were all mercenary, we would have wanted a shorter lockup,” he said, describing the extension as a signal of long-term commitment rather than distress.

Story's daily revenue, which peaked at $43,000 in September 2025 and is currently $0, according to DeFiLlama, has been a concern for many investors.

(DeFiLlama)

Lee contends that those numbers understate Story’s activity because much of the intended monetization occurs offchain through licensing agreements rather than in transaction tolls.

In his view, gas revenue is a lagging indicator for a network designed to record intellectual property rights, provenance and usage terms before it begins extracting meaningful value from them.

“We intentionally put our chain gas fee pretty low. We’re more of an IP chain,” he said. “You may not see the type of revenue stream that you’re looking for like a DeFi chain.”

Instead, he said Story’s near-term focus is on recording ownership terms and usage rights for datasets and models used to train artificial-intelligence systems — something the project announced last year — with payments and royalty splits embedded in smart contracts.

That shift moves the project away from tokenizing media content or collectibles and toward what Lee described as “unscrapable” human-contributed data, such as multilingual voice samples and first-person video, assets he argues are harder for AI developers to obtain legally at scale through traditional web scraping.

The transition, however, delays the visibility of onchain income because much of the expected value is tied to enterprise licensing deals rather than retail transaction fees. Lee compared the timeline to his previous Web2-based startup experience — which landed him a $440 million exit in 2021 — noting that it took years for meaningful revenue to materialize.

For token holders, the practical implication is that supply expansion is being slowed while the team attempts to demonstrate traction in AI data partnerships and rights-cleared dataset collection.

Whether that strategy ultimately converts into a sustainable business model is an open question, but Lee maintained that extending vesting schedules is healthier than rushing liquidity into a weak market.

"The best founders, the best teams, the best companies usually do it for a decade plus, we’re in it for the long term and longer innings," Lee said.

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