Secured a16z's Series C investment, valued at 2.25 billion USD, Story was ultimately acquired by Sui for 30 million USD

Author: Zhou, ChainCatcher

On October 12, the Sui Foundation and DATA Foundation jointly announced that the Sui Foundation will invest $30 million in the DATA Network, becoming the largest institutional holder of the network, while PIP Labs and DATA Foundation will continue to hold their original shares.

According to the arrangement, the DATA Network will upgrade to a protocol natively running on Sui, with the original independent public chain being retired. SY Lee will also serve as a strategic advisor to the Sui Foundation.

After the announcement, DATA saw a short-term surge, rising from about $0.197 to $0.221 within two hours, an increase of about 12%, with the 24-hour trading volume expanding from about $10 million to over $60 million. However, the upward trend did not continue, and later that day, the price had fallen back to around $0.20.

The predecessor of the DATA Network was the Story Protocol, which was once valued at $2.25 billion. Over three years, this project shifted from a programmable IP public chain to AI training data, and now it has handed over its own public chain. What does the $30 million buy, and can this pivot fulfill the demands that were not met in the previous two attempts?

$2.25 Billion Valuation of IP Public Chain, Two Pivots in Three Years

Story Protocol was founded by SY Lee in 2022, with PIP Labs as the developer. The project's initial positioning was as an IP public chain, allowing intellectual property to be registered, authorized, and automatically settled on-chain, enabling creators' works to be invoked, adapted, and traded.

This narrative attracted top-tier capital. Data from RootData shows that Story completed three rounds of financing, raising $29.3 million, $25 million, and $80 million, with a16z participating in all. The Series B financing completed in August 2024 corresponded to a valuation of $2.25 billion.

Image Source: RootData

In February 2025, the Story mainnet and IP token were launched simultaneously. According to CoinGecko data, the IP token reached an all-time high of $14.78 on September 21 of that year, but subsequently declined, with a drop of over 98% as of the time of writing.

After the peak, the project began to adjust its direction. On June 25 of this year, Story announced its rebranding to DATA Foundation, with the IP token converted to DATA at a 1:1 ratio, shifting its business focus from general IP infrastructure to AI training data.

The official launch of the on-chain registration system Trace was introduced to record the source and usage rights of training data and to settle rewards for data contributors. The human data trading platform Kled joined as a core partner, with its founder Avi Patel serving as the Chief Data Officer of DATA Foundation.

Four months later, DATA pivoted once again, this time even handing over its own public chain.

Copyright Holders Did Not Come, No Revenue on Chain, Story Retreated to Sui

The first pivot of Story was due to the fact that copyright holders never truly entered the market. The official explanation during the rebranding was that leading music, gaming, and brand companies valued control over their own copyrights and were unwilling to place valuable IP into an open authorization system, which conflicted with Story's original intention of making all IP programmable.

This disconnect became evident as early as September 2025. At the Story Origin Summit, SY Lee announced that Pinkfong, the producer of Baby Shark, would launch its first official token through the third-party distribution platform IP.World.

Days after the token launch, Pinkfong issued a statement on X, claiming that the token had no association with the company, leading to a collapse in the token's price. IP.World later stated that the rights it obtained from Pinkfong, one of the authorized parties, were flawed. The registration on-chain was completed, but the rights themselves were not valid.

With the copyright holders absent, the on-chain usage also shrank accordingly. According to DefiLlama data, the DeFi locked value on this chain reached a peak of $45.12 million on September 23, 2025, but as of the time of writing, only about $32,000 remains.

On-chain application revenue also significantly declined, dropping from about $145,000 in September 2025 to $3,893 in September 2026. The trading volume on the on-chain DEX over the past seven days was only $0.30.

Regarding the team, in August 2025, co-founder Jason Zhao announced his resignation from his full-time position, transitioning to a strategic advisor role.

Entering 2026, the token unlock for the team and investors, originally scheduled for February, became a new pressure point. At the end of January, the Story board announced that the unlock would be postponed by six months to August, stating that it would use this time to drive revenue growth and product validation, with plans to announce a partnership with a large AI company in the third quarter.

In response to doubts about the near-zero on-chain revenue, SY Lee stated in a February interview that on-chain revenue is an incorrect metric. He explained that the team intended to keep gas fees very low, and Story's business model relies on off-chain data authorization, so the outside world should not expect to see revenue like that of a DeFi public chain.

Six months later, this statement changed. On August 5, DATA Foundation published a lengthy article provided by PIP Labs, announcing that the board approved another delay, with the unlock date for all locked tokens pushed to February 13, 2028. The reason given was that the model had been validated, claiming that it had grown over 200 times in a few weeks, with chain fees ranking in the top 20.

The article also mentioned that insiders chose to continue locking their tokens after reviewing on-chain data, rather than cashing out. According to DefiLlama data, as of the time of writing, the 24-hour chain fee for this chain was about $918.

Meanwhile, the AI data business has not yet produced sufficient results. As of the time of writing, the official has not publicly named any AI laboratories purchasing data, and the anticipated partnership with an AI giant announced in January has not been disclosed.

As a core data source, Kled was announced in June to bring over 1.5 billion data points to the network. By October, the Sui official blog still described this batch of data as being in the process of integration, while the cumulative data contributions recorded on Trace since its launch amounted to 250 million.

RootData data also shows that DATA Foundation itself is an investor in Kled.

A public chain with almost no usage still incurs maintenance costs. The official stated that the purpose of migrating to Sui is to enhance scalability and reduce the costs of maintaining an independent L1. The chain fees used to validate the model will also disappear along with this chain.

$30 Million and a Migration Cannot Bring Copyright Holders and Data Buyers

The Sui Foundation's investment is quite substantial. According to CoinGecko data, as of the time of writing, the circulating market value of DATA is about $73 million, with $30 million accounting for nearly 40% of it.

However, the official public information did not specify the form of this investment, the source of the tokens, or the price, only stating that the positions after the migration of locked and allocated tokens would remain unchanged. Just two months ago, the official had stated that insiders chose to continue locking their tokens instead of cashing out.

On the token side, DATA will migrate to Sui at a 1:1 ratio, with the total supply remaining unchanged. According to official information, the team and investor tokens will still follow the schedule announced in August, starting to unlock in February 2028, and will be released in batches until 2031.

After the migration is completed, the validators, staking, AMM, and other contracts on the original chain will gradually be shut down, and the positioning of DATA will change from a protocol token to the native token of Trace. Transaction fees on Sui will be paid in SUI, and the gas and staking functions originally borne by DATA will no longer exist.

The official stated that governance rights and token economics will at least be comparable to the current situation, but did not specify the details. For holders, no action is currently required, and the migration schedule will be announced separately, while Walrus is expected to become the default storage layer for applications under DATA Foundation in the coming months.

For Sui, this collaboration fills in the puzzle for AI data. Adeniyi Abiodun, co-founder of Mysten Labs, stated that Sui and Walrus are positioned as platforms for AI data storage, authorization, and payment, with the authorized data brought by DATA already serving cutting-edge AI laboratories worldwide.

The migration does indeed improve one shortcoming of Trace. According to Sui, currently, a Trace record can only prove when a certain file was registered, and the hash relies on metadata provided by the application party. After integrating with Walrus, Trace can save an encrypted copy of the original file, with the hash generated directly from the data itself.

However, the technical improvements do not answer the questions that Story has faced since day one. The Baby Shark incident has already shown that there is a gap between on-chain registration and real authorization. This gap has not been bridged from IP public chains to AI data protocols.

Crypto KOL AlΞx Wacy believes that building an L1 in recent years was seen as a symbol of project strength, but operating a public chain and creating a good product are two different things. Cutting off something that has been invested in for many years is harder than continuing to add features to the roadmap.

Looking at a larger scope, Story's situation is not uncommon. According to DefiLlama chain fee data, as of October 14, out of 560 blockchains, 400 had zero fees in the last 24 hours, and 449 had fees of less than $10, with only 5 having daily fees exceeding $100,000. On this list, DATA is not at the bottom, yet it is still difficult to cover the costs of maintaining an independent public chain.

Story may not be the last project to hand over a public chain. For DATA, migrating to Sui addresses the cost issue, but whether a third rebirth can occur still depends on whether there are truly AI companies willing to pay for this data.