Story Protocol’s co-founder Jason Zhao announced he would step down from his full-time role and move into a “strategic advisor” position, citing plans to focus on a new AI venture called Poseidon.

Zhao’s exit, which comes six months after the mainnet launch of the protocol’s native token IP, drew backlash from the crypto community. 

“Another L1 founder exit after producing absolutely nothing and making a lot of money in the process. The industry needs to stop supporting this crap,” said EthHub co-founder Anthony Sassano on X. 

“It’s so disheartening that even the “top VCs” just seem stuck on this loop of rewarding flash over substance,” wrote Adam Cochran, partner at Cinneamhain Ventures, on X. “How the hell do we advance as an industry, if you throw money at smoke, mirrors and grift?”

This story is an excerpt from the Unchained Daily newsletter.

Story Protocol has raised around $143 million, with a valuation of around $2.25 billion as of its latest funding round led by a16z.

Despite raising significant capital, the protocol has made just $26,652 in lifetime chain fees, earning just $23 in daily fees on Aug. 17.

Story’s core contributors received 20% of IP’s 1 billion token supply — none of which was unlocked at the token generation event. The tokens are subject to a four-year linear vesting schedule with a one-year cliff, meaning no tokens unlock until after the first year.

Last week, a Nasdaq-listed company called Heritage Distilling announced $220 million in PIPE financing to establish a treasury strategy focused on IP. The firm said it plans to use $82 million to buy IP on the open market within the first 90 days.

Update, Aug. 20, 2025, 10:40 am ET: An earlier version of this article misstated the vesting schedule for Story Protocol’s token. The correct schedule includes a one-year cliff and a 48-month vesting period, with no tokens unlocking before the first year. The article has been updated to reflect this.