Key Takeaways
- • $DATA, the startup formerly known as Story Protocol and backed by Andreessen Horowitz's crypto arm a16z, is shutting down its own first-layer blockchain and moving operations to the Sui network.
- • The company has reportedly raised approximately $140 million since inception, but management concluded that running an independent chain required engineering, validator, security audit, and infrastructure costs that distracted from its core product.
- • The Sui Foundation will invest $30 million in $DATA as part of the transition.
- • The strategy pivots from IP licensing of music rights, patents and trademarks toward AI training data, centered on a logging system called Trace.
- • Existing $DATA tokens will migrate to Sui on a one-to-one basis, with vesting schedules and holder rights reportedly preserved; the old network stays live until migration completes.
Summary
$DATA, backed by Andreessen Horowitz's crypto investment arm a16z, is undergoing a strategic shift that the source describes as potentially significant for the crypto sector. The startup, formerly known as Story Protocol, has decided to shut down the first-layer blockchain it developed over several years and continue its operations on Sui. According to the report, the company has raised approximately $140 million in funding since its inception.
The decision reflects management's conclusion that maintaining an independent blockchain carried engineering, validator, security audit and infrastructure costs that made it difficult to focus on the core product. As part of the transition, the Sui Foundation will invest $30 million in $DATA.
The company initially aimed to license intellectual property, including music rights, patents and trademarks, across its blockchain. It later acknowledged the difficulty of disrupting the established structure of those markets and shifted its focus to AI training data. At the center of the new strategy is Trace, a logging system designed to record who provides the video, audio and other data used to train AI models, the permissions under which it may be used, and its licensing history. According to the company, between 3 million and 4 million contributions are added to the system daily through the shared platform Kled, though the company notes that this volume does not mean all of that data generates licensing revenue.
Existing $DATA tokens are planned to migrate to the Sui network on a one-to-one basis. The company has stated that vesting schedules and existing token holders' rights will be preserved. The shutdown and migration will not happen all at once, as the old network will continue operating until the transition is complete.
The decision reflects management's conclusion that maintaining an independent blockchain carried engineering, validator, security audit and infrastructure costs that made it difficult to focus on the core product. As part of the transition, the Sui Foundation will invest $30 million in $DATA.
The company initially aimed to license intellectual property, including music rights, patents and trademarks, across its blockchain. It later acknowledged the difficulty of disrupting the established structure of those markets and shifted its focus to AI training data. At the center of the new strategy is Trace, a logging system designed to record who provides the video, audio and other data used to train AI models, the permissions under which it may be used, and its licensing history. According to the company, between 3 million and 4 million contributions are added to the system daily through the shared platform Kled, though the company notes that this volume does not mean all of that data generates licensing revenue.
Existing $DATA tokens are planned to migrate to the Sui network on a one-to-one basis. The company has stated that vesting schedules and existing token holders' rights will be preserved. The shutdown and migration will not happen all at once, as the old network will continue operating until the transition is complete.
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