5YF Episode #18: Story Protocol Co-Founder Jason Zhao

Future of ideas and creativity: a new IP layer

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Today, we explore the future of intellectual property and the economics of ideas.

IP just doesn’t operate at the speed and scale of the internet

The internet enables the instant global distribution of ideas and content. However, it has lacked the infrastructure to track and monetize these assets. Hollywood lawyers scramble to shut down fan-made Star Wars spin-offs, and OpenAI withdraws AI agents that mimic celebrities like Scarlett Johansson. It’s a chaotic game of whack-a-mole, but that’s all about to change.

In a new blockchain system, creators embed rules of engagement directly into their digital content, allowing others to license and remix it while sharing the profits. This approach to intellectual property (IP) is designed for the Internet age and is poised to transform legal frameworks while significantly expanding the economic pie for all creators.

To uncover what this future could look like I sat down with the company leading this disruption, Story Protocol. A South Korean startup that has raised over $50M to develop a programmable IP infrastructure for the internet.

My 5 Year Outlook:

• Wealth shifts to creatives
• South Korea rises to #2 cultural superpower
• AI agents use blockchain to trust each other

Curious? Read on as I unpack each below 👇🏼

Wealth shifts to creatives

The current IP framework limits the proliferation of licensing opportunities as signing partnerships does not scale. Creatives benefit from large licensing agreements, but they must act adversarial toward anyone who tries to use their content without proper authorization. As a result, the long tail of the market for their creation is not just ignored, but throttled.

With Story, the long tail can be mobilized like a creative army, encouraged to remix content alongside the creators. This can lead to the creation of new characters, storylines, products, and formats.

An IP graph where remixers are earning, J.K. Rowling is earning, and they’re growing the IP in a bottoms up way.

Remixing brings a shift from IP as legal enforcement and deterrence to IP as a network effect that promotes growth and reach. It aligns incentives throughout the creative value chain and coordinates the flow of earnings at scale. Creators will be rewarded with additional upside as their fans deploy adaptations, and a new cohort of fan-creators who earn a living through remixing IP will emerge.

Imagine the multi-year gaps between hotly awaited sequels, like Dune and Game of Thrones, filled with fan-led content and immersive worlds, all funneling revenue back to the original creators. The initial content will be just the tip of the IP iceberg. A large chunk of the IP earnings could come from viral remixes, becoming blockbuster earners for both fans and creators, thereby enriching the entire creative ecosystem.

Jason Zhao, Co-founder of Story Protocol

Story Protocol is building a programmable intellectual property (IP) infrastructure for the internet. Built on the blockchain, Story provides a neutral source to track IP origins, enable remixing of IP with multiple stakeholders receiving attribution, and delivers an economic framework for everyone to participate in revenue that is created. Born out of South Korea, a global cultural innovator, the startup has raised over $50M from the likes of A16Z Crypto, Endeavor, and Samsung to become the leading contender to reimagine how intellectual property is managed for our modern age.

Jason is co-founder and Head of Protocol at Story. Prior to founding the company, he was at Google’s Deepmind focusing on putting novel AI research into production. He is an investment Scout at Sequoia, a computer science graduate from Stanford and can be seen lecturing about his passion in philosophy at Oxford University.

South Korea rises to #2 cultural superpower

Story Protocol originates from South Korea, the home nation of its CEO, S.Y. Lee. As an observer of “Hallyu,” or the “Korean Wave,” the surge in global demand for Korean exports from music to makeup, this comes as no surprise. K-pop bands consistently top global music charts, films like Parasite sweep the Oscars, and shows like Squid Game achieve cult status on Netflix.

South Korea is known for innovating entertainment formats and introducing unique business models. The region has significantly impacted the global gaming industry, pioneering micro-payments, fan economies, digital goods, and crypto adoption. As Jason noted, South Korean studios are leading the adoption of new digital economics, while in the US, such innovations are often viewed as fringe.

Asian entertainment is ahead of American in many ways, especially in terms of the business model because they have a culture of really taking the digital asset space seriously.

This rise in innovation and cultural influence positions South Korea as a rapidly ascending soft power. In my opinion, on track to become the second most influential cultural power after the US. This is no accident. Just as the US government seeded the technology endeavors that led to Silicon Valley, the South Korean government has spent decades strategically investing in the cultural sector. We are now witnessing the fruits of these efforts, with wave after wave of new cultural phenomena emerging on the global stage.

AI agents use blockchain to trust each other

The innovations being developed have far-reaching implications beyond the media and creative industries.

The same blockchain technology that enables IP to be programmed, verified, tracked, and monetized opens a second and perhaps larger use case — the creation of a trust infrastructure for AI agents. Just as Story’s IP protocol provides an immutable source of provenance and truth for ideas and content, a similar approach can be applied to AI agents, allowing them to verify and trust the data being shared among themselves.

Machines don’t have the ability to trust each other. The notion of trust is a very human concept, and blockchains might be the real unlock for autonomous agents.

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Why is helping AI agents trust each other important?

Trust is crucial for AI agents to function effectively and autonomously, without human oversight. When AI systems interact, share data, and make decisions, a reliable method to verify the authenticity and accuracy of information is essential. A blockchain-based trust infrastructure ensures that data exchanged between AI agents is transparent, secure, and tamper-proof, reducing the risk of misinformation and errors (a.k.a hallucinations).

This trust layer can make AI-driven processes more acceptable across various industries, from healthcare to finance, which demand robust and dependable AI systems. Just as trust is fundamental to human interactions, equipping AI agents with the ability to build trust can make their widespread deployment in society and the economy a reality.

Companies like Story are modern examples of how new technology infrastructure can bring paradigm shifts across industries. As a protocol on the blockchain, they showcase the unique potential of Web3 technology, offering capabilities that no other software architecture can deliver. This is a timely reminder during our current crypto winter.

Onwards!