On August 17, 2025, Story Protocol co-founder Jason Zhao announced that he is leaving his full-time role at the project. Zhao said he will remain a strategic adviser, but his main focus will be a new company called Poseidon, which develops artificial intelligence for industries such as science, robotics, and space.
Zhao described Poseidon as an effort to bring AI into “frontier industries,” adding that if successful, it could represent a new industrial revolution.
Story Protocol launched in 2021 with the goal of making intellectual property “programmable.” The project raised more than $130 million, including funding from Andreessen Horowitz (a16z). Its blockchain allows creators to register, tokenize, and monetize their work while automating licensing through smart contracts.
With Zhao stepping back, SY Lee becomes the sole chief executive. Andrea takes over as chief product officer, while Sandeep becomes chief AI officer.
The news of Zhao’s departure spread quickly on X. Some users described the move as a “betrayal”, while others argued that it showed a lack of conviction from the founding team.
In early-stage blockchain projects, founder commitment is often seen as a measure of long-term reliability. Zhao leaving before the project proves strong adoption has raised concerns about whether the original vision is still intact.
At the same time, Story Protocol is facing questions about its usage. Community data shows that the network is collecting only about $17 in daily fees. Daily fees represent the total amount of money paid by users to use the blockchain in a single day. A higher figure usually signals strong activity. A lower figure suggests that few people are currently using the network.
With more than $130 million in funding behind it, the gap between investment and actual fee generation has become a focal point for critics.
This is not the first time a blockchain founder has stepped back. In December 2024, a co-founder of Aptos also left after reaching a vesting milestone. That move was mostly met with understanding.
The Story Protocol case, however, has been treated differently. Many users argue that Zhao’s departure feels premature, as the project has yet to establish strong adoption or significant revenue. Viral posts have compared the two cases side by side, framing Story Protocol’s situation in a more negative light.
Despite these challenges, Story Protocol still has a live blockchain, its IP token, and backing from major investors. Zhao also said he will continue to support the project through partnerships and investment, calling it the most meaningful experience of his life.
The next phase now rests with SY Lee and the leadership team. Their main tasks will be to reassure the community about direction and to grow on-chain activity so that fee revenue increases.
