Story Protocol: Tokenizing Intelligence Into Programmable IP Assets - Jason Zhao. Ep. 585

Transcript

IP is an asset class where the market for that asset is so inefficient the transaction costs to do business to transact trade use IP are so high and honestly it's so inaccessible and opaque you have no information about this market so it's illegible but it's also illiquid and it's high transaction cost so only the biggest biggest players with hundreds of lawyers they're able to do these like massive bespoke deals and negotiations for IP but for the 99.99% longtail of this Market nothing happened because the cost of making things happen are too high you know whether or not people think about it in this way is something that we interact with far more than with stocks right um every single day we spend three or four hours on YouTube on Tik Tok on Instagram we post photos we create photos and with AI there's going to be eight billion

Hollywood level creators uh that that can create Hollywood level movies by just having a single idea and putting in a single paragraph so even though the word IP is not how people maybe would call it like the reality is this is sort of the most tangible part of our lives like consuming and creating culture um and AI is only going to supercharge that the amount of infrastructure that build for IP it is very low comparatively to how deep of an impact it makes in our everyday lives we don't just build software we actually spend a lot of time and effort on the legal side of things so i' would say for every single dollar we put into building the stack I just told you about on the engineering side we probably spent as much with some of the best legal teams in the world to

create a new licensing framework that's first of its kind and we call it the programmable IP license essentially it's a standard legal framework that Maps one to one with the parameters on story so if you set some terms story let's say in order to use this IP you need to pay me $5 that smart contract parameter is also mirrored on the legal contract itself in other words there's a onetoone link between code and law and story and everything on story has a legal wrap around it that's enforceable welcome to epicenter the show which talks about the Technologies projects and people driving decentralization in the blockchain revolution i f ANS and today I'm speaking with Jason Jiao the co-founder of story protocol which is a protocol in the IP space that we'll dive into in

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nosis chain or secure the network with just one gno and affordable Hardware start your decentralization journey today at nosis doio Jason it's super nice to have you on thanks for having me really excited for this conversation before we dive into um story protocol um tell us a bit about yourself absolutely so um my background is a little bit uh more diverse I didn't come I haven't been in blockchain space for 10 years like some people here but I've been um you know pretty interested in a couple things before uh entering the blocking space so I studied philosophy in University really interested in political Theory and I also got a masters in computer science um both at Stanford so I I've always

liked to focus on the intersection of the humanities in technology um but originally you know my first Passion in technology and in software was really AI so I did some AI research at computer vision Lab at Stanford and then I worked at Deep Mind uh which is Google's AI for a couple years and what I was doing there was taking reinforcement learning uh coming out of alpha go and Alpha zero these large like chess playing game playing agents um and finding ways to take that research that reinforcement learning algorithms and and apply them to build new products on the back of that so one thing that I've been really interested in throughout my career is essentially finding ways to take cuttingedge technical research and find ways to translate that into tangible consumer products that's what I was doing at Deep Minds um but then I got

really interested in blockchain I would say around 2020 um around defi summer 2020 21 and what really excited me was I started to reread the Bitcoin and ethereum white papers in addition to Unis Swap and maker and these other core protocols and what was really striking is that reading these white papers it was almost like reading a political Treatise in some ways especially like Bitcoin and ethereum are so ideological and so philosophical with a little bit of computer science mixed in um so I I found that element very intellectually interesting that you know blockchains had this ambition to become core uh substrate of a new type of Internet and somewhat argue even like a new typee of society um so that was really exciting and and I think very fresh and then the other component was sort of the open source ethos in the organic almost

darwinian ethos of of blockchain where you know if you build a smart contract it's this Unstoppable soft software program that can last for thousands of years um as long as the blockchain is maintained and the idea that other people can permissionless build on top of your work they can Fork it they can build an application on top of it if they want they can even maliciously attack it right so if the software is inst structured perfectly then there will be cracks and those cracks will be manipulated and that leads to this really open research environment where you're going from white paper to products from research to production in like a matter of weeks or months rather than what I was doing in the AI world was you know you wait like five years to see some research go into production uh because there's only like five or six

players that can actually do that right so that that's kind of how I got into blockchain and the the sort of uh you know quick story of how story happened is just me and my co-founder were really focused on finding ways to build blockchains that could do something Beyond money and be on finance and I think IP is you know a 61 trillion dollar asset class that blockchains haven't really tackled and there's so many problems that IP is having because it's just so opaque so inefficient of a market um especially with respect to AI you're starting to see all these issues so that's kind of how story started and and how it got into the space and what are the pain points that you currently see with um how IP is treated under the current system yeah so I mean I could go on for a long time about this but just

to kind of give you the high level over view you know I think the history of crypto is kind of building software based networks blockchain networks that replace struggling existing institutions right and the best example of this is Bitcoin you have Satoshi responding to the 2008 financial crisis and essentially saying hey like Banks maybe we shouldn't maybe we shouldn't completely rely on banks maybe we should at least have an alternative where software is intermediary instead of like this massive you know Goldman Sachs or lemman brothers institution right and so that's kind of an example of where most Bings have been focused is kind of continuing that mission of decentralizing Finance uh um but if you look at the legal system that system is way more Antiquated and way less sophisticated than Wall Street Wall Street is actually quite sophisticated um if you think about just to give an

example I've talked to sort of execs of companies where their entire business is owning IP right and IP can be scientific research so it can be Pharmaceuticals it can be the biggest brands in the world think Louis Vuitton or Nike or Puma um or Jas and then also think you know media right so Hollywood uh music black pink things like that so it's a very broad asset class but if you go to EXA in any uh branch of this asset class I've I've literally heard this many times where they'll tell me hey um sometimes I just don't do deals where I could actually have someone else use my IP and pay me for it because I need to go to my legal team and find out what IP I own and that like quering what IP I own and what slice of the rights I own

is actually more expensive it costs more millions of dollars than the deal itself so I just don't do the deal right and this is indicative of a broader problem which is IP is an asset class where the market for that asset is so inefficient the transaction costs to do business to transact trade use IP are so high and honestly it's so inaccessible and opaque to people like you know you and I like how do how do I know what IP I can use there's not a place I can go if you go to the US copyright office for example it's like it looks worse than Craigslist right so you have no information about this market so it's illegible but it's also illiquid and it's high transaction cost so it's a very inefficient Market where you have only the biggest biggest players with hundreds of lawyers they're

able to do these like massive bespoke deals and negotiations for IP but for the 99.9% long tale of this Market nothing happen because the cost of making things happen are too high and that's what story is trying to solve is make it easier for individual IB holders even also AI companies right you're starting to see open AI getting sued by the New York Times um at the same time they're also paying a bunch of Ip companies like tens of million dollars a year so like how do you have this massive discrepancy there's this like free-for-all in the IP world and our thesis is like whether you're an individual IP holder whether you're an open AI it's very hard for you to license IP like you also can't expect open AI to make 10 million licensing deals per day they don't have the resources to do that so I think the

thesis is the market for IP is very inefficient and you need a blockchain based Global Market a transparent Market a programmable market for IP how did you stumble upon this kind of like interweaving set of problems because in a way it's very it's very obscure and that most of us don't really deal with IP directly the way that we kind of deal with say stocks or kind of like Financial products or um even kind of like things like reputation or so that kind of other people are trying to put on chain yeah it's a good question so the way I got interested in this issue is a couple a couple things so one is just my time at T mines and my time doing AI research um there's a saying in AI research it's quite simple

but it is very truthful which is if you have garbage in you're gonna have garbage out and what that means is if you have really bad IP really bad data you can have the world's most advanced AI model algorithm you can have the most computes all the gpus you want and you can train it for a million years but it's still going to produce bad outputs if you train it on bad data and so um very quickly I realized you know even at Deep Mind and at Stanford that essentially high quality data is a scarce resource and it's a resource that again doesn't have a very efficient market right so not only are there a ton of legal battles around you know like whether AI companies need to pay for IP which I certainly think they do um there's also just not an efficient way

to actually pay for that IP to actually even not even just pay for it but to discover it right so more you the closer you look at you know how the market for this sort of like high valuable training data works the more you realize that even the most basic insights as who owns what IP and how much do I need to pay and how can I pay them like these these questions are very difficult and very expensive to answer so that's kind of my first for into it and then like um I said before I got really interested in blockchains through defi summer and um I was thinking like you know if blockchains truly are like this substrate for new society and or at least a new internet uh you know can they do things Beyond just currencies because you know if you think about the

instit that hold our society together today there they go so much broader than just currency like currency is a big part of it money is a big part of it but uh what I'd argue is IP as a term is quite you know technical in some sense it's quite legal but IP as a concept you know whether or not people think about it in this way is something that we interact with far more than with stocks right um every single day we spend three or four hours on YouTube on Tik Tok on Instagram we post photos we create photos and with AI there's going to be eight billion Hollywood level creators uh that that can create Hollywood level movies by just having a sing single idea and putting in a single paragraph so even though the word IP is not how people maybe would call it like the

reality is this is sort of the most tangible part of our lives like consuming and creating culture um and AI is only going to supercharge that um so I think most people spend far more time that on on Tik Tok let's say then then on Charles Schwab or on Robin Hood uh and certainly on coinbase so I think IP has a to like a massive addressable Market it's very easy for people to understand why it's valuable because you know even your mom can understand like why Snoopy or Mickey Mouse is valuable they might understand like why uh you know collateralized loan over collateralized loan on a is so valuable right that might be more Niche but I think um the amount of infrastructure that's been built for IP uh is very low comparatively to how deep of an impact it makes in our everyday lives why do we think kind of there

needs to be a needs to be a blockchain at the core of the solution for this right kind of like if it sounds like um kind of some standardization and kind of like digitization would already kind of make a big dent I agree I think some standardization would make a big dent and I think the analogy I like to always go back to is because it's familiar in the blockchain space is money and so I think Swift has has somewhat standardized International payments right there are sort of global payment standards because you know countries with different banking systems and different currencies need to be able to exchange money with each other and so we as a society have tried to come up with an like a kind of overlapping set of agreements and and standards like Swift that allow us to pay money to each other

across borders um but then again stable coins are probably 100x cheaper than Swift so I think that you know like I think where IP is today is they don't even have a swift okay there's no there's no Swifts for IP so yes I do agree like even having offchain solutions would be really helpful and I think that it's great that people are thinking about that but I I like with stable coins being 10x better than Swift I think a blockchain based solution will be 10x better than even like a swift for IP and the reason why is because I think the killer app if I had to summarize in one sentence for blockchains is to create Unstoppable programmable digital markets and you have this instant settlement instant payment uh for IP across the world regardless of where you're from and I think that's really really powerful so I think that's why

blockchains are necessary and then as a very pragmatic matter um we're a developer product so we we don't necessarily build a bunch of user facing applications we're more like stripe uh or a payment platform in the sense of you know you're not going on stripe.com to pay for your hoodie or your shoes that you just bought you're you're going on some website and stripe is powering it's kind of behind the scenes powering the payment experience that's how we imagine the story is we're kind of like a developer tool and if you're building an app that touches IP whether it's an AI application or consumer app or Creator tool you're kind of using story just to sort of register IP that's being created on your app to story or pull IP that's already on story and bring it into your app and uh if that's the case

we need to sell to developers and in order to sell developers we need to assure them that if they're about to cut put their entire company's IP which could be 90% of the company's value on a system that that's system cannot just shut down um because what we're promising to developers or we're pitching them I should say is you register your IP from your application once on story it can now access uh monetization and distribution from the hundreds of other applications in our ecosystem right so it might originate from um like you might create a character on one Creator tool but then that character can be used as a comic in you know five other apps right and so if we just if we have the ability to shut that off shut that IP system off then we're cutting off like a very important source of revenue for that business and

I think developers from you know seeing for example Twitter shut down their API I think in the 2010s uh that was very devastating right and people have stop trusting centralized API so much um that if we're asking these businesses where 90% of the values acud in IP like it's good to have this immutability and unsto ability condition where they know that you know the software we put out there that they're registering their IP on is actually not in our control either uh so I think that's an added layer benefit but I do think sort of just having a global settlement layer uh in instant payments is really important part of why we chose to have blockchains as the back end okay yeah um I think this sets the stage super beautifully so kind of let's dive into kind of like how the protocol itself works and then we can kind of

loop our way back around to kind of like how how this kind of applies to the real world so um story is actually its own blockchain right so kind of what why did you choose to kind of build a new blockchain rather than kind of use an existing one yeah so uh there's two reasons for that one is more I would say historical based on like our own sort of trials and tribulations as a company the other is um more philosophical and feuture facing so um in terms of the sort of history of why we ended up building an all1 that was never really Our intention so we started off trying to build just a pure smart contract protocol um and we immediately like ran into a lot of limitation so essentially what we wanted to do uh the way that IP works is it's very

graph-like in nature if you try to represent it in a database structure and what I mean by that one example I can give is um uh this game called Super Smash Brothers so it's a pretty popular uh game where you have like characters from many different franchises that are able to fight with each other and it's like kind of a combat game right so you have Mario from Nintendo you have uh Sonic from Sega you have you know characters that are licensed in essentially from let's say five to 10 different franchises so you can imagine there's like let's say 30 to 50 characters in that game from many different franchises and um the way that we would represent that on story is you'd have like 30 different parents IPS so you have Mario you have son you have some other character and they're all kind of like licensing their IP into

this game which is its own sort of dot or node on this graph right so you can imagine like 30 parent nodes all connecting to a single child node and if if the game generates Revenue let's say generates $100 in Revenue that Revenue would be flow it would flow up to each of the parents based on the agreements that they had right so maybe Mario gets 1% of the revenue so it gets $1 right so now you have this Revenue coming in to this graph and flowing up to each of the 30 parents but the thing about building something that's permission in on chain is that those parents can have parents as well right so you have money moving into one node that's the game it flows up proportionately to all the parents and then the parents have their own parents and so you have this very

computationally expensive graph traversal problem and the evm as it stands today is just is not optimized to do this sort of computation and because it was so expensive we had to limit our protocol such that each IP could only have two parents connected to it and that really limits the sort of things that you can do on story for example if you have a song that has three components like let's say a Harmony uh a melody and then like some instrumentals you can't represent that on story because you can only have two parents and so we had to limit a lot of the applications and um we decided that that's not the route we wanted to go like we didn't want to just wait for the evm to get better and so what we did was we just built our own uh execution environment and um this kind of goes to

the sort of future facing reason we we decided that like IP is is just a very different type of asset than money and it requires a lot of additional things Beyond just the graft rever problem I mentioned to you in terms of the execution environment um you also need to validate HP you need to validate whether it's Unique or not right um so if someone registers Mario like we can't have like 5,000 Marios on story right that that's not how IP works there's only one Mario and it's the unique one and then we need to we need to track other usages of Mario right so this even like this sort of decentralized validation surface we have to build out ourselves and so the benefit of building a layer one although it's much much more costly and takes a lot more time on the engering side is that you you can

customize every layer of the stack so we can choose exactly what software our validators are running we can choose exactly how to customize our virtual machine and I think that you know the product that we put out there on public mainnet is going to be version zero and like I think there's going to be many many improvements fundamental improvements that we want to make over the coming years as we get more feedback and it's very difficult to change and customize these things if you're either building a smart contract protocol on another layer one or if you're even building a layer two where if a is struggling for example you're just by default struggling and if ethereum is making certain changes so it's op codes you kind of have to accept those changes and so I think um for us the freedom in Independence was worth the extra cost as

we started to encounter more and more bespoke problems that we ran into I want to double click on the um how do you know which one's the right Mario but kind of I want I want to do that a little bit later so maybe maybe first up um let's talk about kind of the um Tex deck kind of your building on so kind of like what texc did you pick and kind of like Which novel features did you introduce and kind of like how did you make um those tradeoffs when you when you were designing the system yeah so our current layer one is is a little multi-layered um so we have a very I would say uh composable stack and in the

sense that we can upgrade each each layer of the stack very easily if we wanted to and that kind kind of alludes to the flexibility that we want to have in the future but basically on the consensus level we're using a version of uh Comet bft which is also supported by the cosmos SDK so we have compatibility with the cosmos SDK which we think has the biggest developer ecosystem out of any sort of uh blockchainbased SDK so that allows us to have like a very developer friendly consensus level so that's that's what we're doing on on the consensus side for the validators and then um on the execution layer we started with the evm but we made a lot of changes to solve these IP specific problems so I talked about the um graph traversal issue and and flowing royalties through this very large graph

so we have pre compiles that are optimized towards lowering the cost of that execution and uh we will continue adding more and more execution customizations in the future and then on top of so we have the consistence layer we have the execution layer enshrines natively into our execution layer is a smart contract protocol called the proof of creativity protocol and this is kind of the original smart contract protocol we were building um way back when a few years ago um and the basic functionality of the smart contract protocol is to number one create a standard set of metadata for each IP asset so that whether your IP is from country a or country B whether it's from the US or from Europe it essentially has the same metadata um whether it's registered by open AI or by small in the apppp right

so that's number one is the same smart contract metadata and then number two is allowing hiip to be programmable right so not just storing the static information around hip on chain which is relatively uninteresting but actually allowing uh the programmable terms that each IP owner sets for that IP to be enforced automatically and so an example I can give is like let's say I create uh let's say I create like some sort of music I can register on story and I say anyone can use this song in AI remixing if they pay me $5 a front and if this remix that they make blows up and generates a lot of Revenue then I want 10% these terms are actually registered on a smart contract through the proof of crazy protocol and whenever someone tries to

use that IP uh we would actually enforce the payment up front and then also if the derivative generates Revenue we would also flow like I used in the Super S example we would flow 10% of the revenue to the original music Creator right so in this example it would be myself and so essentially what we've done is allow every single IP asset to have its own terms its own programmable parameters and to allow them to be enforced on chain through story automatically building this kind of like parallel IP system on chain so that's enshrined on top of our execution layer um and then the last thing on our stack is essentially uh this validation service I was talking about which every single IP asset that comes in that gets registered to story we actually check whether it's Unique based on the

reference set of every other asset that's already been registered on story as well as a common set of Ip assets like Mickey Mouse or Thanos that we know are likely to be infringed upon um so every single IP asset that's coming into store we actually check for a basic level of uniqueness before it can be registered and that's also a separate system that we built um that works in parallel to the stack I just shared what do you do if um I kind of just bypass story and just use you know the uh the IP uh without ever involving story right kind of like I can take this song and kind of just remix it um what prevents that yeah so I mean one thing that is really important to note is

there's many layers of defense that we have um so uh first and foremost right uh we we don't just build software we actually spend a lot of time and effort on the legal side of things so i' would say for every single dollar we put into building the stack I just told you about on the engineering side we' probably spent as much with some of the best legal teams in the world to create a new licensing framework that's first of its kind and we call it the programmable IP license and essentially what that license is is a standard legal contract think about it like similar to a YC safe right it made YC safe made it really easy for people to raise Capital um without having to have a priced round and so essentially it's a standard legal framework that Maps one to one with the

parameters on story so if you set some terms on story let's say in orders to use as IP you need to pay me $5 that smart contract parameter is also mirrored on the legal contract itself in other words there's a onetoone link between code and law and story and everything on story has a legal wrap around it that's enforcable right so story is not guaranteeing that no one will ever be able to use your IP in a malicious way that's impossible without running like some sort of Big Brother Security State where we track every click that everyone's doing at all times it's impossible but what we can say is at the very basic level if you do not support the terms that the creator has set you are violating the law right and usually that is actually quite a level of deterrence that people aren't

familiar with right so if if there is like actual consequences then people are less likely to infringe so that's kind of like the Baseline right like the worst case scenario on story is the best case scenario today right which is that someone violates your IP and you have to go to court that's not a very good outcome it's very expensive but we think that's important as a back stop so that's kind of why we invest on legal side but hopefully we don't have to get to that back stop hopefully we can actually build a set of solutions um that are like levels of escalation below having go to court because we want to avoid that and so what we've done is like I mentioned before we had this IP validation service and so what it does is we partnered with a lot of web 2

Enterprise providers whose you know entire companies focus on scanning the internet and finding instances of similar images so every asset on Story by virtue of it being registered on story now all these different providers are actually searching for instances where that IP is being used right and we can flag that and we have an onchain attestation service where we essentially flag hey your IP may be used elsewhere you might want to take a look um and if the violating IP is also on story right so let's say if there's two IPS on Story one is pretending to be the other we would actually have the ability to demonetize the IP that's infringing um so that those are sort of the ways that we like have these levels of escalation such that on chain there are already quality signals uh to people that want to use IP uh as well as to the IP

holders that there may be something wrong or that they might want to avoid using certain IP but the legal back stop is always there right so I think that's kind of important as well is to have that legal back stop cool I I have more legal questions in just a bit maybe let's talk about the blockchain for for a little bit so um I I assume this is proof of sake right yes um so who are your validators so our validators are a mix of what I would say like our relatively professional validators that you see working on a lot of other top blockchains and then we also have a good amount of validators from our community so we have validators being run by students at Stanford we have validators from people you know in Asia all around the world and so we you know right now we're starting off with

the Genesis set of 64 validators um which is relatively common uh for something you'd see in the cosmos C dek realm for Comet bft because comet bft has two to 3 second block finality time so it's good to start off with a smaller set of validators but we're planning on very quickly ramping that up um and getting to like 80 even 100 in the first year and so when we do expand our Focus will be primarily filling those with more community validators so like I know some folks at Stanford uh that I that I talked to some students there like they didn't get in on the Genesis set so they're very excited about getting it on the seconds um as well as like other sort of Community Players um either ecosystem projects or folks that we work closely with um outside of that I think

those are the people that we're really prioritizing but right now it's a set of uh professional validators as well as like I would say 20 to 30 community validators so it's a little bit under half that would be community and like as we expands um most of the marginal additional validator should be from the community and H how do you um ensure interoperability with other blockchains because kind of like in principle you can kind of use IP in different ways too right I in principle kind of say I could use this as colet or I could kind of borrow against this and so on so H how do you can you can you kind of create that level of interoperability yes this is something

that's it's a core focus of ours at the end of the day because our our thesis our success casad story is that we actually become a core protocol for the internet and by that I mean there's not many people out there that like are big domain name system fans or like https fans like there's not many people saying I love the internet like you know IP protocol TCP IP right like because are just the fabric of our lives like we just take HTTP for granted we take DNS for granted um and I think that's the level of invisibility that we aspire to and in order to get to the point where we are just the sort of peer-to-peer IP system that powers not just government IP systems but also individual companies in this in this massive ecosystem we

need to have a lot of adoption from different parties right and I think that starts with offchain IP so we worked with you know Justin Bieber we worked with dualipa um we worked with some top Hollywood creators as well as um you know stability AI right which is one of the world's largest AI companies they they're the creators behind stable diffusion which is the biggest uh most most remixed I should say most uh forked uh image creation model image generation model in the world so we have like these large offchain partners that we work with in the AI worlds and in the worlds of Ip holders and the way that we treat other chains is very similar so we just treat them as offchain essentially you're not on story so if you are building an IP on Bas or salana or polygon or what have you um essentially

it we treat it the same way as we would treat you know a Creator who Justin Bieber who isn't onchain right because ultimately we want to be able to support IP no matter where it is and that IP should live wherever it living before but its specific transactions its specific exchange information its settlements should be settled on story so I would say that we do have like an integration with layer zero so we can have crushing communication but our overall philosophy is um I told you about the entire stack that we built there's this consensus layer execution layer there's a protocol layer on the smart contract side but wrapped around that entire stack is a simple API and it looks just like the stripe API right like it's just a service that you can use and so whether your app is on salana

whether your app is completely off chain you just call her API and it doesn't work for you so story is sort of this invisible IP settlement layer but we are wrapping and abstracting away this entire stack in the form of an API that anyone can call regardless of whether they're onchain or offchain okay how do you um Envision kind of the shift um from you know the traditional IP system um to your onchain model so kind of what um how do you get people to move it's a good question so there's two there's two ways to do this and we focused on both ways but to different extents so the first way is onboard offchain IP and I would say existing IP

the second way is to just get net new IP on story and I actually think the second way is more interesting um so we spend probably 80% of our time trying to just get all future IP being created on a story natively right so I say story native on chain native IP and the reason why we spend more time there than on traditional IP or existing IP is because um I think about it similarly to YouTube uh whenever you have like a new paradigm shift in content it's never the incumbents that are the best most Avid adopters of that technology so YouTube is a good example because YouTube when they started they didn't go after Hollywood people and say Hey Stephen Spielberg or James Cameron why don't you create like a five- minute movie on

YouTube right they went after or at least I should say the people that adopted YouTube were uh the Mr Beast of the world right or people in their living rooms like creating Home Videos for fun and over time they got more sophisticated and now I would say like Mr Beast Maris brownley these big YouTube creators probably make two or three or even 10x more than the average like very successful Hollywood producer director right so it's taken a couple decades but my point is YouTube would not have succeeded if they had gone after traditional big players in Hollywood they succeeded by finding a neglected class of creators and serving them and those people became YouTube Native internet native creators and I think the same thing will be true of Ip when it comes to story which is that um

brand new like economics are going to be unlocked when you have this new Marketplace for IP and people that get it may be Crypt native at first and they're probably just creating net new IP on story rather than onboarding just these massive cataloges of already existing IP what is like a purely onchain native version of Ip look like that's kind of the ecosystem that we're building that's what a lot of the apps that have been built on top of story are doing is just letting people create IP natively on story so that I think is a big Focus where we're not even trying to onboard the existing class um and I think that's going to be very exciting on the other hand like there's so much valuable IP out there like and we want to get as much of it onto story so we do

have to work with these traditional institutions and I actually think 2025 is just going to be a great year to work with institutions especially you know being an American uh company like in the US I think a lot of more people in the government are much more open to blockchain now right and that's that's a real opportunity because I think with Story one of my goals for this year is to work with institutions and in particular with copyright offices and patent offices around the world um essentially because they all have very outdated very fragmented very expensive and inefficient IP systems imagine if every single copy that was registered in the US was also registered on story and in a standardized way such that anyone around the world could use uh that copyright and generate revenue for that American copyright holder and same thing

for someone in Germany or someone in France like they would able if they register a copyright or patents with the German or French governments that would also be on story now you have this fully composable network of Ip um and so just starting to work with governments this is conversations we're already starting to have uh with folks in the US government and other governments about being a sort of backends for their IP systems I think that's also really and actually is going to be like way more efficient than on boarding one by one um but just to kind of outline the progress we've already made with traditional IPS we've already started to work with you know we've we've taken Justin Bieber's peaches and tokenized it as an ipwa so now all the rights are on chain we've done that with a song with Miley Cyrus

and DBA and we're planning on doing that some more with some big IPS in Korea so we we are working with some of the world's largest music cataloges and IP catalogs to onramp their IP on a story um and then last thing I'll say is with the stability AI partnership the stable diffusion partnership one reason that's so exciting is because 90 to 99% of the contents in the future will probably be ai sistered ai generated so I think in the next decade we'll see you know in 2035 90% of AI cont or content is is AI generated or AI assisted and the best way to register new IP on a story is to just embed ourselves at the AI model level so now with stable diffusion any output of stable diffusion if you call stories API it gets registered on story as an IP set so if we can embed

ourselves into these AI models and these AI models are what's going to be producing most thep in the future that's going to be huge onboarding tactic for us and that's something that we're jumbling down on so I think there's a lot of ways to get IP But ultimately I think getting new IP is actually even more exciting than just getting existing IP can you tell us about um some of the applications that sit on stop on top of story and kind of like um create IP directly on story yeah absolutely so um the one I just mentioned around like tokenizing some of the biggest music catalogs that is a very interesting protocol that's built on top of story called Arya and essentially what Arya does is they have really close relationships with some of the biggest music catalogs in the world and

eventually they'll expand beyond music to Fine Arts and and other sort of Ip assets but the idea is they want to do what you know let's say Ando did for t- bills but for a much more interesting asset class which is these like really iconic IPS right the thing about treasury bills is that you know anyone can bring most people can purchase treasury bills right treasury bills is probably one of the most common financial instruments in the world so bringing it on chain is less beneficial I I think um because it's already so common and also treasury bills are not programmable so I mean if you have it on chain like the programmability of that treasury bill is not enhanced by bringing on change there's not much you can do it's just it's a treasure build whereas with IP what Arya is doing is they're bringing some of the biggest

hits uh out there right like I just use Justin Bieber pees as an example and they're bringing it on to story which does two things one it means that people who have no access to IPS and class right I was talking about the 99.9% long tail all these people you and I can now access uh the yield from all the streams of Justin Bieber's paches right so as I'm listening to Justin Bieber's Peaches on Spotify I am benefiting the people who have access to that asset on Ara and that's really exciting because you're not taking this asset that used to be held by like the top 0.1% of Institutions and letting everyone have access to it but it's not just the yield because that part is kind of similar to what Ando is doing with treasury builds bring treasury builds yield on chain what's even more exciting is that the

rights are also on chain so not just the economics but also the rights are on chain and so whoever owns the Justin Bieber asset or even a fractionalized part of that asset on story now has the right to create AI remixes of that song right and that's really exciting because that licensing is done through story and that's something that just isn't possible in the traditional legal world if I wanted to remix Justin Bieber Peaches I mean I would have to go talk to his lawyers right that would be very very difficult for me to do that now I can do it with a single click on stor so I think that's one exciting use case the St staple diffusion uh is another one and then we actually announced recently that um David goyer who is the creator Behind The Dark Knight trilogy the big Batman movie series he's the lead

screenwriter there he's actually creating a brand new IP franchise on story where every single character every single spaceship every single uh story in that universe is on story and uh his fans and his community can actually extend uh and add new stories add new characters add new lore and and if accepted by David they actually share Revenue in the entire franchise so if that franchise becomes a movie and generates a lot of Revenue all their revenue would be share with people who contribute along the way uh so it's almost like a Wikipedia for fiction where you have these Atomic building blocks these IP assets that the community can now have full Reign to build on top of and now there's actually already AI agents being trained on top of the IP that David has put out so that these AI agents are actually creating

you know short films images based off of the Canon and they can monetize as well right so this an example of a sort of a Creator who's actually leaning in to opening up that IP creating a market around it leaning into AI even extending his work and helping him make Revenue because if that AI does a really good job builds a lot of popularity generates a lot of Revenue David is also going to get a share so I think all these things are like very exciting early experiments of how story can be used um in AI how story can be used in sort of defi or ipy and then also just by like everyday users that may not be crypto native I think IP is going to bring a lot of people on chain that just had no reason to be on chain before you talked about the legal

framework um that kind of you're setting up um to go alongside the software part of this in which jurisdictions is is that recognized yeah so luckily for us we started with copyright and the the great thing about copyright is that there's this thing called the burn convention which is a little bit obscure but basically the burn convention I believe it was 1884 1886 essentially around 200 countries around the world met to harmonize the basic standards of copyright law right and the reason why that's important is because if I created Pikachu as Nintendo in Japan that doesn't mean that like someone in the US who's not in Japan should be able to use Pikachu freely right like you want uh these ideas and this creativity and this knowledge uh to be Global and you want it to be protected globally and so most

copyright law is it functions relatively similarly across countries what is different is enforcement so some countries enforce copyright much more heavily than others um but when it comes to at least declaring this sort of principle they are very similar and our legal contract is designed primarily with the US and mines but in a way that it is compatible with most other countries copyright systems and so that allows us to start giving Global or near Global protection to um to basically all the people using story right so that's why one of the reasons why we started with copyright is because you do have this Global harmonization on the basic principles of copyright law okay I understand what other flavors of I IP are there I mean there must be more right yes so there's copyright

which covers media right so you're think about songs movies anything creative work like a poem um a new character and then there's um there's patents which cover sort of unique ideas or processes so you can patent a drug you can patent a specific process for making a car things like that and then those trademarks which are sort of um protecting the brands that businesses and people kind of do Commerce around right so like think about Nike logo that's trademark um and so yeah patents and trademarks are a little bit more complex that's something that we haven't we're not supporting on day one of main net is patents trademarks but it's something that we're very interested in supporting and I actually think the inefficiencies in patents and trademarks are much higher than in copyright um because they're just higher value Assets in General on average and so um right

now we we're kind of starting to do the legal work to also have that legal wrapper for patents and trademarks on story but one of the things that we'll have to deal with as you said is that they're less Global right so you have a patent office in the US you have a patent office in Germany those are completely different patent offices with different so being able to harmonize that we might have to go country to country as opposed to copyright which is much more Global okay maybe let's talk about the enforcement of Ip rights on story so kind of like you talked about um Mario and only being able to kind of like upload Mario once how do you disc understand who who the true Mario IP holder is to kind of give them the rights of reaping the um the uh y on on

that asset yeah so the way that we do this is twofold so there's sort of like a I would say like an information signal layer and then there is a dispute layer and so the information signal layer every single ass said that someone tries to register on story we have four or five different IP partners that essentially are specialized they're basically API Services right SAS services that go and scan the internet and say hey have I ever seen something that looks like this and if so what percentage confidence do I have that this is infringing or not unique so every single asset that comes in the story we actually query a series of these apis and kind of average out the results and try to give a signal now it's not binding so the signal might say hey this is like 99% likely to be

infringing and the idea is that like we're a permissionless protocol right so ultimately if you see a Mario asset and we're like this is 99% infringing and you want to use it then you're running that risk as a user right but we want to provide developers and their end users as much information as possible so we have all these signals that every IP asset has based on um its analysis right um the the sort of second layer of this is a dispute system so anyone around the world can dispute an IP asset on story and say hey this asset is actually infringing so if Nintendo goes and sees this Mario with 99% certainty that it's infringing and it's like this is not registered by a Nintendo employee then they can go and dispute it in the dispute process right now we're using Uma which is the same thing that settles

poly Market but in the future we want to have you know professional lawyers and and you know more sophisticated methods of settling these disputes but basically there's an onchain arbitration process and the results of that process is enforced onchain right so in the case of Mario being 99% chance of infringing Nintendo raises a dispute well the dispute is probably going to end that this asset is indeed infringing and it would be demonetized and essentially not surfaced by story Zone API and story Zone indexing right because it's on chain we can't actually remove it and we don't want to like censor fully so you can still look at it on chain but it will say hey this is you know an asset this been successfully disputed so we have basically our own onchain sort of information system almost like a sort of like you know nutrition fact of each IP

and then also an onchain dispute system which is like an onchain court that can actually take decisions um so that is all the sort of onchain apparatus that we've had to build to make story like a high quality IP repository a global IP Marketplace and then like I said before like I mean maybe they're not perfect because we're just starting out so maybe there's some gaps on the edges that's why we also have the legal backing where you know if none of that works then you can still take it to court and you'll still have that protection from the law but I mean to the extent that we can avoid that we want to because it's very expensive to do that so we try to keep things on chain say I'm I'm the original Mario owner and kind of like someone else has uploaded it um do you force me to kind

of dispute it on chain first or can I take you to to court right away because kind of like you should you can do that right away yeah yeah okay because you can't really Force someone to kind of like of course the dispute is more of like um we think I mean if you're Nintendo I think it's maybe like a hard to use in example they probably already have a bunch of lawyers that are suing people out so they probably don't need this but um we're really thinking about the long tale right so if you're a Creator I mean the unfortunate truth of the current legal system as it's set up is that it it's it's biases towards people who infringe on IP because the cost of persecute Prosecuting IP infringement is so high that most creators choose not to right so if you're a Creator and you're not making

that much every year and someone violates your IP it's going to cost you tens of thousands of dollars over potentially multiple years to to go and say hey this person you know to go to court right so it's actually incentivizes creators to not file a suit and that systematically biases the system towards people who infringe because they know a lot of these people they don't have the resources to defend themselves what we're trying to do is at least if it's on story if it's on chain we're giving you a very cheap way to sort of defend yourself that's much less cost prohibitive than the traditional system but of course if someone wants to go straight to the you know uh very very complex gunfights of the uh traditional legal system then of course they can do that but you can't remove my IP from from uh from the blockchain right kind

of like it's permissionless and even if kind of like even if it was something that I I wouldn't want to be online you you can't remove it right we can't remove it in the sense of we choose not to sensor on story because we don't want to beers of Truth um well it's it's it's it's hard to remove content that's on chain it depends on whether it's on ipfs or rwe like on rwe it's very difficult to remove uh if it's on ipfs then there are ways to do that but the you know even if we could we wouldn't because we think it's important to be like a sort of censorship resistance and in line with the usess of blockchain but that's why we have this API right so functionally speaking it's kind of like

it's kind of like Twitter if Twitter decided okay we're not going to remove your post but we're just going to make sure that the algorithm never serves your post to anyone and the only way to see this is if you have to go on this specific profile right uh except 20 times harder because navigating the blockchain is not you know it's not like as easy as navigating Twitter so that's kind of the idea right it's kind of like we just don't show anyone this asset anymore um so if someone calls our API we just don't show it to them now if someone wants to go and you know actually Traverse the blockchain uh then they can find it but you know the amount of people who want to do that are probably very low and so it's functionally a soft it's soft removal um but we don't want to actually remove all

possibility for people to actually access this you said earlier that you can also demonetize s an IP how do you do that so essentially just we just prevents people from uh so we have this sort of royalty system so we prevent people from being able to send uh funds to that wallet that's part of the world system so basically like every IP asset has its own wallet a smart wallet associated with it so it almost as like it's autonomous bank account attached to hip but that bank account is kind of held through stories proof of creativity protocol and one of the features in that protocol is we can actually prevent that account from occurring more value if uh it's deemed as disputed so essentially we just remove the ability for that IP asset you know let's say you know it's

owed $10 because some royalties were were shared it's it's enable to claim those $10 for's wallet how does the governance behind that work the governance for for story is mostly done on the blockchain level so we uh we have like some basic governance through um you know decentralization we have a forum but essentially like the governance is is uh it's making suggestions to how we can improve the protocol but for now we kind of want to make sure that we can Steward the protocol for the first few months um before we sort of allow uh things to be decentralized progressively I think the first few things that we'll decentralize is actually protocol fees um rather than the specific logic of the royalty module so for example you know you know Unis swop has protocol fees and the and the

Dow has the ability to sort of turn it on and off I think that's something that we'll be looking at um giving that decision the community okay but in due course kind of the community will be will be the one deciding um which um IP to demonetize no so that's based on the disputes the dispute system so in this case it would be Uma and the people participating in that on Uma but in the future we want to add a lot more dispute options so that it's not just one option um but basically the dispute process and the outcome of that process is binding there are ways to uh let's say um try to reverse that dispute as well so you can challenge the dispute um but essentially or appeal I should say um but

essentially the dispute system is what is used to turn on and off the royalties and once kind of an item has been disputed um can they just upload it again and I have to dispute it again or do you ban kind of like re-uploads yeah it's hard to ban re-uploads in some sense because people can I mean even if we try to ban a wallet right anyone can create a new wallet and so it's kind of like a constant battle like I think there's no there's no unless we centralize the whole thing there's no one SI you said you scan the content right when I registered you scan it against yes we do scan the content yeah yeah so so you could in principle do it right we could in principle Do It um but you know you know you never know if Nintendo is the

one that's actually registering it right so we don't want to ban let's say Mario we don't want to just ban Mario forever because Nintendo could actually register Mario rather than some random person right so um that that's why we don't want to ban the image because the image maybe there's nothing wrong with it it's just the person that's registering it is not the one that owns the image okay and the person who's registering the image um without um my permission as uh the IP holder um are they penalized in any way other than kind of like being demonetized because otherwise they can just grief me right kind of like they can just make five million accounts and kind of upload um the Mario pick five million uh five million times and kind of like I have to dispute it five

million times and kind of it'll just cost me a bunch of time yeah so I think that in that case right I mean it's a good Edge case but ultimately I mean that is the sort of risk of a permissionless system is that you have the ability for people to do uh things openly I think what in real realistic will happen is that essentially like there will be social consensus and there will be reputation systems built around this and so like we already have a lot of apps that are focused on this specific sort of problem um we don't have to solve every problem ourselves as like an ecosystem so one example is essentially um there's a there's an application called vario which allows people to stake IP on assets and say hey if I'm staking um this token on an IP asset I'm basically

saying I believe that this is the real one right and so I think there are going to be a lot of sort of immune system uh sort of type of responses that develop in the ecosystem where people might only really look at or take seriously IPS with a certain level of stake and if everyone knows hey like for whatever reason there's 5,000 Marios on story but this one has 10,000 usdc Stakes then that one's going to be the the accepted one and the other 5,000 will probably be looked at with you know just an understanding that that is not the real consensus one right so I think there are sort of like many cryptoeconomic ways that we can actually generate legitimacy um in a more scalable way but ultimately like as a matter of practice we are not trying to limit the amount of people who

can register and even if we try to limit specific wallets they can always cre more wallet right so the way that we approach this problem is less how can we prevent any wrongdoing because if you want to have 100% success and preventing wrong doing you need to have full control over the system and that just kind of now you revert into this sort of centralized version of that governments try to do very unsuccessfully and in trying to achieve Perfection they actually achieve medocity um whereas we could have more scalable systems um that have like you know different approaches to developing an immune response they kind of spamming or other forms of longtail behavior to make them unprofitable essentially right because you know if you have a lot of Ip staked or a lot of token staked on um one asset and then there's 4,000 other versions of

that asset that don't have any then it's pretty clear which one is the real one okay what do you do in a case where kind of the I the IP rights are disputed even offchain because that happens very regularly right I mean there's IP fights all the time um say um I developed a drug and someone else say they kind of develop the same drug ahead of me and there there's a lawsuit um do do you just freeze kind of the registering of that IP until it's decided in court yeah so one thing that we are developing is essentially a way to kind of take offchain events and bring them on chain so there's this thing called the story orchestration service and actually the story orchestration service

is one thing that we already use now to coordinate these like offchain infringement detection providers so the these detection providers are not primarily serving blockchain companies they're primarily serving two companies and so they have like some sort of you know auan algorith them and they send a result to us and we need to bring that result onto story so uh one thing that we want to extend is if there are offchain disputes can we actually have an oracle that brings them on chain and updates with the result right ultimately our thesis that story is kind of similar to stable coins in a way where you know stable coins they are totally rc20 tokens if they're on ethereum they're totally like you know blockchain native but they derive their legitimacy from the US dollar and then they take the US Dollar's legitimacy and add in the

blockchain technology to make it much better right so now you have instant Global Payments with stable coins instead of having to go through all these terrible processes if you just had US dollars I think stories same thing right like we're not trying to create a parallel legal system where like we have a completely different set of laws what we're trying to do is take the legitimacy of the legal system and then make it 1,000x better on chain and so if there are things happening in the traditional legal system then we should be responsive to it and that's a really great point so I think right now we don't have that um support live but one thing that the story organization service is meant to do is to bring the relevant events and Analysis from offchain world into onchain World um so as as time goes on and as we you know

prove story out uh I think that that'll be an essential feature and actually one thing that I am eager to do is is actually you know when people violate ipon story to take it to court in the traditional legal system just to prove to everyone using story that this actually does work and that we're putting our money where our mouth is so I I think that we're we're sort of driving towards that institutional adoption by showing that we're going to put our money where our mouth is okay can you outline the road M map for story so what are the key milestones in the next year and uh beond that yeah so I mean the biggest mon for us coming up is our public main net launch so that's going to be very very soon and um you know I'm really excited to to to sort of

celebrate that with the community with the team because we've been working on this for three years and so we've had a few test Nets by now and this will be like our first main net and just making sure everything goes well um beyond that um looking forward to deepen our relationship with stability AI as well as working with you know some big players in the AI worlds because I think you know story is one of those few projects in the blockchain space that can work with these massive companies because we're providing them with this massive essentially training set of Ip that they can use but also pay for right in a legal way so continue to work with a providers starting to work with governments as I mentioned um and then um essentially just building up the ecosystem and a lot of the technology like the way that we see story as I

mentioned is it's not a finished product like even though it's on Main net I think a lot of um a lot of the blockchain space has this notion of like once you launch on meia that's kind of like the core thing it's done it's send Stone but we kind of see this as an iterative approach and so uh we're dropping our white paper very soon which will show a lot of the future directions we have but I think there's a lot of Innovations we can make in decentralized file storage I think there's a lot of Innovations we can make in connecting deeper to the AI stack and knowing you know the moment AI model generate something whether it can be registered on story um I think there's just going to be a lot of technical upgrades to our also just like basic scalability as a

blockchain as we get more and more adoption so I see our Tech as very much vzero and I think we're just gonna have to add a lot more bells and whistles as a year goes on in addition to partnering with these AI companies and um working with governments cool so um if a Creator or developer kind of wants to get involved with story where would you send them yeah so for developers definitely our docs so docs. story. Foundation we update it like more than once a week so super live super up to date we also have a version that you can easily download to train an AI agent on so we know that a lot of people are coding with AI uh helpers now so you know our documentation is AI consumable uh and then for creators we we actually going to launch a a very interesting

first-party app that allows you to seamlessly register ipon story very shortly after our public mainnet so I'd encourage you to experiment with that um it's going to be called the IP portal uh and it's going to be a really really easy app for you to register protect and monetize your IP without having any technical ability or knowing what the blockchain is so that'll be relaunched pretty shortly after our public main that fantastic thank you so much for coming on Jason thank you thank you for having me