The recent departure of Jason Zhao, co-founder of Story Protocol—a blockchain-based intellectual property platform valued at approximately $2 billion—has introduced significant uncertainty within the project’s ecosystem. Zhao officially stepped down from his full-time role in mid-August 2025, choosing to remain involved only as a strategic advisor. His exit follows a 3.5-year tenure and coincides with his intention to focus on a new AI and robotics endeavor, Poseidon. While such changes are not uncommon in the technology sector, Zhao’s departure has provoked a marked reaction across crypto communities and social media, underscoring concerns about leadership stability.
Community sentiment has largely skewed negative, with many participants interpreting Zhao’s exit as abandonment during a challenging phase for Story Protocol. Discussions on forums and Twitter have featured accusations of a “founder led-exit” and raised suspicions of a potential “rug pull,” terms that suggest a precipitous withdrawal possibly motivated by financial gain. These perceptions are amplified by Zhao’s substantial token holdings—estimated at roughly 5% of the total 1 billion token supply—translating to an approximate value of $281 million at current market rates. Such financial stakes fuel speculation that Zhao may capitalize on his assets, thereby eroding investor trust at a critical juncture. Notably, the project had secured approximately $134.3 million in equity funding from top-tier investors, including a16z and Polychain, which adds to the community’s surprise over his exit equity funding.
Community fears founder’s exit signals abandonment amid fears of a financially motivated “rug pull” scenario.
The project itself, despite securing over $130 million from prominent venture capitalists including Andreessen Horowitz, has faced challenges in demonstrating viable revenue streams. Story Protocol’s business model, which centers on enabling creators to tokenize and monetize intellectual property onchain, has therefore far generated negligible income; reported platform fees amount to a mere $45 in total, casting doubt on sustainability and adoption. This revenue shortfall, coupled with Zhao’s leadership exit, poses questions about the protocol’s long-term viability and capacity to innovate. The platform was originally launched in 2021 with the mission to create a programmable IP layer that automates licensing processes via blockchain technology, aiming to empower creators through blockchain-based rights management.
With Zhao’s departure signaling potential internal difficulties, the remaining team confronts the task of maintaining momentum amid investor scrutiny and community skepticism. The unfolding situation warrants close observation as Story Protocol navigates this pivotal transition.
