The Sui Foundation invested $30 million in DATA Network. DATA will upgrade to a Sui-native protocol, and the original public chain will be retired. After the announcement, DATA rose 12% in two hours, with trading volume expanding to $60 million. Story Protocol, once valued at $2.25 billion, has pivoted twice in three years. Can it deliver on its promises this time?
Author: Zhou, ChainCatcher
On October 12, the Sui Foundation and DATA Foundation jointly announced that the Sui Foundation will invest $30 million in DATA Network, becoming the network's largest institutional holder, while PIP Labs and DATA Foundation will continue to hold their existing stakes.
Under the arrangement, DATA Network will be upgraded to a protocol running natively on Sui, and its original standalone public chain will be retired accordingly. SY Lee himself will also serve as a strategic advisor to the Sui Foundation.
After the news was announced, DATA surged in the short term, rising from about $0.197 to $0.221 within two hours, a gain of about 12%, with 24-hour trading volume expanding from about $10 million to more than $60 million. However, the rally did not continue, and later that day the price had fallen back to around $0.20.
DATA Network's predecessor was Story Protocol, which was once valued at $2.25 billion. Over three years, the project shifted from a programmable IP public chain to AI training data, and now it has handed over its own public chain as well. What did $30 million buy, and can this latest pivot deliver on the demand that the previous two pivots failed to realize?
An IP public chain valued at $2.25 billion, two pivots in three years
Story Protocol was founded by SY Lee in 2022, with PIP Labs as the developer. The project was initially positioned as an IP public chain, allowing intellectual property to be registered, licensed, and automatically revenue-shared on-chain, so that creators' works could be invoked, adapted, and traded.
This narrative attracted top-tier capital. According to RootData, Story completed three rounds of financing, raising $29.3 million, $25 million, and $80 million respectively, with a16z participating in all of them. The Series B round completed in August 2024 corresponded to a valuation of $2.25 billion.
Image source: RootData
In February 2025, Story's mainnet and the IP token launched simultaneously. According to CoinGecko data, IP hit an all-time high of $14.78 on September 21 of that year, then declined steadily, and as of publication the drop has exceeded 98%.
After the peak, the project began to adjust direction. On June 25 this year, Story announced a rebranding as DATA Foundation, with the IP token converted to DATA at 1:1, and its business focus shifted from general-purpose IP infrastructure to AI training data.
The team also launched the on-chain registration system Trace, used to record the provenance and usage rights of training data and to settle compensation with data contributors. The human data marketplace Kled joined as a core partner, and its founder Avi Patel became chief data officer of DATA Foundation.
Four months later, DATA pivoted again, and this time it handed over even its own public chain.
Rights holders did not come, on-chain revenue vanished, and Story retreated all the way to Sui
Story's first pivot was driven by the fact that rights holders never truly entered. In explaining the rebranding, the team said that leading music, gaming, and brand companies place greater value on control over their own copyrights and are unwilling to put valuable IP into an open licensing system, which conflicted with Story's original intention of making all IP programmable.
This disconnect had already become apparent in September 2025. At the time, at the Story Origin Summit, SY Lee announced that Pinkfong, the producer of Baby Shark, would launch its first official token through the third-party issuance platform IP.World.
A few days after the token launched, Pinkfong issued a statement on X saying the token had no affiliation with the company, and the token price immediately collapsed. IP.World later said that the rights it had obtained from one of Pinkfong's licensees were defective. The registration was completed on-chain, but the rights themselves did not hold.
Rights holders did not arrive, and on-chain usage shrank accordingly. According to DefiLlama data, DeFi total value locked on the chain peaked at $45.12 million on September 23, 2025, and as of publication only about $32,000 remained.
On-chain application revenue also fell sharply, from about $145,000 per month in September 2025 to $3,893 in September 2026. On-chain DEX trading volume over the past 7 days was only $0.30.
On the team side, in August 2025, co-founder Jason Zhao announced he was stepping down from a full-time role to become a strategic advisor.
Entering 2026, the token unlock for the team and investors, originally scheduled to expire in February, became a new source of pressure. In late January, the Story board announced it would postpone the unlock by 6 months to August, saying it would use the time to drive revenue growth and product validation, and expected to announce a partnership with a major AI company in the third quarter.
Facing questions about on-chain revenue being nearly zero, SY Lee said in a February interview that on-chain revenue was the wrong metric. He explained that the team intentionally set gas fees very low, that Story's business model lies in off-chain data licensing, and that outsiders should not expect to see revenue like that of a DeFi public chain.
Half a year later, that statement changed. On August 5, DATA Foundation published a long article provided by PIP Labs, announcing that the board had approved another extension, postponing the unlock of all locked tokens to February 13, 2028. The reason was that the model had been proven, and they said it had grown more than 200 times within weeks and entered the top 20 by chain fees.
The article also mentioned that insiders chose to continue locking their tokens after reviewing on-chain data rather than cashing out. According to DefiLlama data, as of publication, the chain's 24-hour chain fees were about $918.
At the same time, the AI data business has yet to produce sufficient results. As of publication, the team has not publicly named any AI lab purchasing the data, and the third-quarter AI giant partnership previewed in January has not been announced.
As a core data source, Kled was announced in June as bringing more than 1.5 billion pieces of data to the network. By October, Sui's official blog still described this batch of data as being integrated, while cumulative data contributions registered through Trace since its launch stood at 250 million.
RootData data also shows that DATA Foundation itself is an investor in Kled.
A public chain with almost no usage still incurs full maintenance costs. The team stated that the purpose of migrating to Sui is to improve scalability and reduce the cost of maintaining an independent L1. The chain fees used in August to prove the model had been validated will also disappear along with the chain.
$30 million and a migration cannot buy rights holders and data buyers
The Sui Foundation's investment is considerable in size. According to CoinGecko data, as of publication DATA's circulating market capitalization is about $73 million, and $30 million is close to 40% of that.
However, public information from the team does not specify the form of the investment, the source of the tokens, or the price, saying only that positions under lock-up and vesting will remain unchanged after migration. Just two months earlier, the team had said insiders chose to continue locking their tokens rather than cash out.
At the token level, DATA will migrate to Sui at 1:1, with total supply unchanged. According to official materials, team and investor tokens will still follow the timetable announced in August, beginning to unlock from February 2028 and then releasing in batches through 2031.
After the migration is completed, validators, staking, AMMs, and other contracts on the original chain will be gradually shut down, and DATA's positioning will change from a protocol token to the native token of Trace. Transaction fees on Sui are paid in SUI, and the gas and staking functions originally borne by DATA will no longer exist.
The team said governance rights and tokenomics will be at least comparable to the current setup, but did not specify the exact arrangements. For holders, no action is currently required, and the migration timetable will be announced separately. Walrus is expected to become the default storage layer for applications under DATA Foundation within the next few months.For Sui, this partnership fills in the missing piece of AI data. Adeniyi Abiodun, co-founder of Mysten Labs, said that Sui and Walrus are positioned as a platform for AI data storage, authorization, and payment, and that the authorized data brought by DATA is already serving cutting-edge AI labs around the world.
The migration can indeed improve one of Trace's weaknesses. According to Sui, at present a Trace record can only prove when a certain file was registered, and the record's hash depends on metadata provided by the application side. After integrating with Walrus, Trace can store an encrypted copy of the original file, and the hash will be generated directly from the data itself.
But technical improvements cannot answer the question Story has faced since day one. The Baby Shark incident has already shown that there is a gap between on-chain registration and real authorization. From IP public chain to AI data protocol, this gap has never been closed.
Crypto KOL AlΞx Wacy believes that in the past few years building one's own L1 was regarded as a symbol of a project's strength, but operating a public chain and building a good product are two different things, and cutting something that has already been invested in for years is harder than continuing to add features to the roadmap.
Viewed on a larger scale, Story's situation is not uncommon. According to DefiLlama chain fee data, as of October 14, 400 of 560 blockchains had zero fees within 24 hours, 449 had less than $10, and only 5 had daily fees exceeding $100,000. On this list, DATA is not at the very bottom, but it is likewise difficult to cover the cost of maintaining an independent public chain.
Story may not be the last project to hand over its public chain. For DATA, moving to Sui solves the cost problem, but whether the third rebirth can succeed still depends on whether AI companies truly willing to pay for this data can emerge.