The Frontier of Intellectual Property: Programmable IP w/ Jason Zhao (Story Protocol)

**Speaker A:** Hello and welcome back to the Strange Water Podcast. Thank you for joining us for another episode. Today's conversation begins in a world that I would also mark as distinct. Distinct from the real world, but one with a lot longer tradition than the blockchain world, the legal world, and more specifically, an intellectual property law. The rules and regulations that govern intellectual property, or ip, were written long before the digital age. They come from a time when the value of IP came from reproducing and selling copies of it. And it's tough to get past the fact that they are built for a different time and therefore are incredibly difficult to enforce in an increasingly online and international world. Part of the problem is the laws that we live under and the legal systems that enforce them. And at least in the US we don't have a lot of hope that we're going to see a lot of progress when the path lies through Washington. But another much more addressable part of the problem is that we don't really have the tools or the systems to express and track IP natively across the Internet. That is, until we had the world computer. Ethereum serves as the Internet native property layer of the Internet. And why can't we just build an intellectual property layer on top of it? Well, today we have the perfect guest for this question, as he's already raised over $50 million to build the answer. Jason Zhao is a co founder of Story Protocol who are building an open IP infrastructure and revolutionizing the way intellectual property works in the 21st century. This episode is a real treat. Not only do we walk through how Story Protocol works and how it will integrate with the existing IP infrastructure, we spend a lot of time thinking through some of the more exciting implications of blockchain, native IP and artificial intelligence. One more thing before we begin. Please do not take financial advice from this or any podcast. Ethereum will change the world one day, but you can easily lose all of your money between now and then. Okay, let's bring out Jason. Jason, thank you so much for joining us on the Strange Water podcast. **Speaker B:** It's a pleasure to be here. **Speaker A:** Awesome, man. Well, I'm so excited to, like, start talking about how, uh, basically we're going to fix the, like, Internet content problem. But before we get there, I am a huge believer that the most important part of every conversation are the people in it. So with that as a frame, can you tell us a little bit about yourself, how you found, you know, crypto and computer science and I guess, like, what about it was so compelling that you didn't run away like Most everyone else, absolutely, yeah. **Speaker B:** So tiny bit of background in myself and I'm very interested in philosophy, so I studied philosophy in university. I also studied computer science as well, which I love. But my true passion is, is in political philosophy. And so one of the reasons why I got super into crypto, I actually started off my career as a product lead at DeepMind. And so there's a lot of interesting ideas, especially now in AI, but at the time, when I got into crypto a few years ago, I actually found it as an interest through my interest in political philosophy. So what I started noticing as I was reading these white papers, Vitalik, Satoshi, these early blockchains were all created through a very libertarian philosophy. It had a very, very specific perspective on how society should function in the wake of 2008, creating an independent monetary system free from government intervention. And so that obviously animated a lot of crypto early on and still does. But what I found extremely interesting was that around the time I was getting into it was that there's a lot of conversation about daos and communities. This is also very pervasive. And so this is a very interesting line of thought where people are saying that people who use platforms should, should own a part of them. Right. If I were an early user of Uber and I helped bootstrap the network, why shouldn't I have tokens or some form of ownership in, in order to compensate me? And so I found that to be very communitarian in some cases, even like socialist in the sense of creating co ops. It's a very co op like language. And then of course you have people who are, you know, the quote unquote degens in crypto who are there to just trade and speculate. And that's also a big part of crypto today. And so it's a very capitalist, pure capitalist worldview. Right. So the fact is that I found crypto and blockchain to be a political mirror. And I think that technologies that reflect so many different worldviews and people see so many different visions being realized in them, that's a sign to me that something very powerful is going on. But one of the things that really drew me to move from DeepMind and start story protocol was the understanding that despite all this promise there, there wasn't a huge consumer use case that had been unlocked. To this day, there's a lot of defi and financial innovation with stablecoins Uniswap. And I think that some interesting consumer use cases have, have been unlocked with NFTs. But I really haven't seen the aha moment yet. And I think that a big part of that is because the intellectual property infrastructure for creativity isn't really there yet on chain. So I think that's. That's kind of what drew me to crypto is this political philosophy element and also seeing the big need to realize the potential for this technology. **Speaker A:** Yeah, for sure. I mean, I think there's something pretty interesting about how you're describing this as the, the maybe, like, political philosophies that swirl around in crypto are like mirrors of each other or like, definitely counterbalance each other. And I think that's definitely true. But part of me just wonders if that, like, all that's really saying is that none of these political philosophies are actually correct and that, like, life is just much more nuanced and, like, gray than the. The way we like to talk about it. And so when you find these areas where it just seems like everything's mixed up, and the same guy who's having, like, a libertarian argument about how, you know, code is law and if, like, you can do it, then you should be allowed to do it, are the same ones that are excited about what a DAO can do with the community. Like, that just shows that we're hitting something that is ground truth and not just like chasing more buzzwords. **Speaker B:** Absolutely. And even what you're saying about there being a lot of different worldviews is something that crypto really accommodates. If you look at Vitalik and Glenn Wild, they've written about pluralism too. Right. So it's almost like crypto invites pluralism and biologies. You know, talked about this in the network state, where because we move away from one centralized authority or several centralized authorities dictating the way that people can operate and the way that systems and software operate, you can actually have the libertarian vision, and it is compatible with the socialist vision or the communitarian, and that is also compatible with the capitalist vision. And if you don't like it, you have the right to exit. So I think that even like, maybe like a new meta narrative over all of these versions, varieties of political thought is that you have different modes of operating and they can exist because of the pluralism of what the blockchain can guarantee. **Speaker A:** Yeah, I say like the. The magic of Ethereum. Right. Which I believe will be the global settlement layer of the future. Right. Is that I still believe we're going to have, like, Wells Fargo bank and probably like Wells Fargo Chain, where most of our money actually lives. But what ethereum and the L2 paradigm, and blah, blah, blah. Everything we're building allows us to is the ability to rage, quit, and just say, like, hey, if this institution is screwing me, like, I'm out. And it's like, it's actually doable in a way that is just frankly not today. And you don't realize it's not until you try to do it. And so maybe like the meta narrative that we're, we're building here is like, by having this feature of opting out, like what the, the countervailing culture of Ethereum is, is that like, whatever you want, like you have the ability to opt in and like, by contrast, opt out. **Speaker B:** Yeah, I 100% agree. It's. Even if, you know, crypto, Rails isn't everyone's first option, in some cases it might not be. It at least offers a powerful backstop from the worst forms of abuse. **Speaker A:** Yeah, cool. So, like, let's. Why don't we talk through your story a little bit more to figure out how we get to story protocol. But tell me a little bit about like, what it was like working at DeepMind and like, why that work that you were doing just like, didn't capture you in the way that this like, like crazy space where like, philosophy meets like economic theory meets like computer science. Like what? Talk to me about that transition. Why was that right for you? **Speaker B:** Yeah, one thing that, you know, a couple things. So the first thing that I will say is that in AI, being at dmind is a very privileged place to be. And I, I have only good things to say about it, but it is, you know, it's only accessible to so many people. Right. You need a ton of data to make AI work. And that's why companies like Google and OpenAI and Microsoft and Amazon have invested so deeply into it and they have such a, such an advantage because they have these massive, massive silos of data that give them proprietary advantages in training the best models. And so one thing that is true of AI is that it's very centralized, very closed in that way, and only few people can access. But in crypto, it's inherently open, it's inherently permissionless, the data is inherently global. Like, these are the sort of guarantees that the blockchain provides. And I found that really exciting. So one thing I noticed in relation to this is that my job at DeepMind as a product lead was to essentially take research coming out of the labs and find ways to productionize it. So how can we take this abstract technical idea and actually generate value for consumers and also revenue for the company. And that, that's a very slow pipeline in AI because it's a very. Only few people can access that research. And so only myself and the engineers I was working with could really take that idea and put it into reality. But in crypto, because it's open and permissionless, because it's global, that research to production pipeline is so much faster. Right. You are, you are seeing white papers come out two or three years ago and in months there's like millions of users, there's millions of dollars being transacted. Yes, sometimes it gets forked, but that's part of the process. Like people are trying to break down this protocol they're trying to build on top of it. It's because it's open, it almost opens up the space of randomness and Darwinian evolution that allows that research to evolve at a much, much faster rate. And so that's what really excited me is it felt like things were happening so much faster in crypto because of the inherent guarantees of the technology that anyone could, good or bad, malicious or not, could go and engage with this technology. And even the times when it fails are going to move the space forward because it's this evolutionary process that just isn't the case in AI. **Speaker A:** Yeah, and I was never someone who like got bit by the AI bug at all. So like, I really can't speak to anything going on there. But at least in crypto, I like to think of it as like the final manifestation of open source because it is like open source with this added layer of like built in systems to reward the people that contribute to it and believe in it and support it. And so like that is something that I find like, is really exciting to me like for like, you know, libertarian ideals and like, for some like, political stuff. But also just like, as someone who has dealt with like large enterprise like software and just like has seen the way the world works, it's just like open source usually is better and if it's not better, it's because someone took the open source and added some like proprietary data into it. And so like, for me, like Ethereum specifically, but really like the broader crypto is a bet on open source in a way that like just couldn't be made before. **Speaker B:** Yeah, that the way that you put it is so powerful and it resonates a lot with me because this is something we say at Story Protocol. It's open source exists, right? Like it existed before crypto. It will continue to exist in the future, but really the unique benefit is crypto combines open source guarantees with value capture. And that that is exactly what we're doing for IP and creative content at Story Protocol is allowing IP to not exist in these silos and in a studio somewhere, in someone's head on a piece of paper. Right. But instead to exist in a global ledger that anyone can access, and then to not just allow it to grow like an open source graph, like almost like an organic Darwinian tree, but also to allow people to capture value for their contributions to that tree. And both of those things don't exist in IP today. It's closed source and the value capture accrues to very few people. And so we want to open source IP in a way, but also allow people to capture value for the things that they've done. **Speaker A:** Yeah. And I think this is like a great pivot point to talk about Story Protocol. So we'll get there in a moment. But I think what is like, very cool about crypto and in general, which matches Story Protocol, is everything that we're talking about. But I think what's a little more ambitious and kind of terrifying about what you're doing is that yours is fundamentally built into the legal system, which is not only scary as itself, but is something that has not yet deemed to embrace our space. So anyway, we'll get to that part of the conversation. **Speaker B:** It'll be fun to talk about that. **Speaker A:** Great. Why don't we just start with what is the origin story and the founding moment of Story Protocol? **Speaker B:** Yeah. So Story Protocol, I'm one of the co founders and my other two co founders are Sy and another Jason Levy. So they are both very, very strong media entrepreneurs. They've been in the Hollywood and entertainment space for a very long time. And so my background, as I mentioned, was more on the technical side, having developed research to production pipelines at DeepMind. Right. And so as I was exploring crypto, I actually left DeepMind with. I just knew I wanted to work on crypto. I didn't have any real idea of what that would look like. So I was just out and about meeting people, hacking on different ideas, kind of getting to know a lot of builders in the space. And I was very lucky to have one of my friends from college introduce me to Sy. And so Sy at the time was thinking very deeply about some of the big, big problems in the entertainment world. And of course, I don't even need to say it out loud because Hollywood has gone through strikes in the past year. Right. Strikes that lasted almost half a year, I believe, on both the actors and the writers. Guilds. Right. And so we were thinking, I think from two different angles and converged at the same point, which is clearly entertainment is broken from some perspective. Right? It's, it's, and it's no one's fault. Like there's not some evil corporation that's, that's bringing this, this pain point. It's just really the structure of how the economics of creativity work is in Hollywood and beyond that make it extremely difficult for studios to generate revenue and also compensate creators fairly and give them ownership. So we're thinking, oh, well, you know, clearly there's, there's a big problem here and we need to provide an alternative. And it seemed like the blockchain was the perfect way to do that, given all the things that we talked about, allowing people to open source ip, allowing people, the creators themselves, to almost be creative entrepreneurs and owning that IP and deciding and setting the rules for who can build on top of that. And that's really important because that turns IP from this static asset into something that's programmable. And so programmability of IP is really what Story Protocol is about. And we believe that by giving this programmability to creators, that they can give other people in their communities go direct to their fans and allow them to write the rules for how their fans can contribute and also potentially earn upside and skin in the game for those contributions in exactly the same way as open source. **Speaker A:** So maybe what might be helpful, just to put meat on the bones here is could you kind of talk through maybe the problem that existed before something like Story Protocol, and then with the foresight of the solution you're building and how that's going to transform it. I'm just curious, from the insider perspective, it's one thing to just say, oh, IP is a mess and it's impossible to track and whatever, but let's look under the covers. What's really going on there and why is it broken? **Speaker B:** Yeah. So the way that I like to describe Story Protocol is first through a historical perspective and understanding how intellectual property as a concept has evolved alongside communication and information technology. So really, you know, intellectual property, what it is at a first principles level is injecting scarcity where there is natural abundance. And so if you think about the notion of property, especially physical property, it's. It's intuitive that it's scarce, right? Like everyone wants a mansion by the beach, but there's only so much space by the beach, and so there's only so many mansions. And of course that property accrues value naturally. And, and with Intellectual property, it's completely different. Because if I have a great idea and I. And you overhear me talking about it, right Rex, and then you, you go take that idea, you can spread that idea as much as you want the idea. I don't really have any real protection over it. It's a naturally abundant thing, right? You are having that idea doesn't take away from me having that idea. And so intellectual property is basically injecting scarcity in order to incentivize the creation of more ideas and more creativity. And it came about as a concept only when it became very possible to replicate content for free. And so when the Gutenberg Press was invented, that's actually shortly after that was when the first IP laws were enacted for the first time, the Statute of Man in England. And the reason why they had to be enacted was because now for the first time I could take ideas and replicate them at scale very, very cheaply. And so it became very, very abundant, the nature of content. But then you needed to inject artificial scarcity through these intellectual property laws to protect creators so that people didn't just take their ideas for free. Right. And so zooming way to the present moment, to the Internet era, you have a similar sort of explosion that the Gutenberg Press introduced, but just have a different form. So obviously the Internet has made content creation extremely cheap and social media and other sort of media platforms have made everyone into a creator. Right? Like you have so much user generated content on YouTube, Instagram, et cetera, TikTok that it's very clear that anyone can create content. And generative AI is only like going to supercharge that trend where it's not just me creating like a really crappy fan fiction somewhere, right. It's, I can actually take that and make it into almost like a Hollywood style short film in a day. And so everyone's going to be able to generate high quality content. And as this new technology comes about, just like with the Gutenberg Press, it demands a new IP regime, it demands a new way of thinking about how do we inject scarcity into the system so that we can actually compensate creators. So one of the things we like to point out at Story Protocol is you look at like the Drake and the Weeknd remix that was created and went to the top charts of Spotify or Harry Potter and Balenciaga, Harry Potter and the style of Balenciaga things on YouTube, they get tens of millions of views. No one's capturing value from that. The creators can't because they're using someone else's work and IP, but also if you're J.K. rowling, you're not getting any value from that because you can't monetize that. And so it's kind of a lose lose situation. And Generative AI is fundamentally, it's fundamentally different from Gutenberg Press. It's not just copying, right? It's not replication, it's actually generation. And so we think that the Internet era needs a new IP technology. Just like intellectual property laws helped usher in the Gutenberg Press, we think that there's a really, really big need for IP to be able to grow at the speed and the scale of the Internet, but also provide real scarcity. And that's where the blockchain comes in. So the blockchain, what it is fundamentally, why are NFTs important at all? Well, fundamentally they're about digital property rights. And so they're a perfect fit for this explosion in creativity, this explosion of abundance and injecting scarcity into it. So we can prove who's owning the ip, let them program the rights, make it programmable, like literally. Take Lawrence Lessig's idea of code is law and make it a reality, and then allow them to share that IP permissionlessly in a way that transcends different mediums and different platforms. So you can own one piece of IP and allow it to go on YouTube, allow it to go on another platform, but you're really the owner. And it's very similar to sort of these decentralized social platforms like Lent and Forecaster, except instead of owning your social graph, you're owning your IP graph. **Speaker A:** So while we're still in this realm of just talking about maybe bigger picture and history of ip, I think something that is just the reality of the perversion of the 21st century is that those same ideas that the way you described IP was very much about supporting innovation and the little guy and fostering a sense of if you work hard, the system will find a way to reward you. And I think in a lot of ways that's true. And I think in a lot of ways and more and more every day, it's not true. And I think that what we see today is that those IP structures are like weapons, but use that, become more effective the more resources you have. And we're like, let's just elephant in the room here probably get sued for saying this, but it's Disney where that has become a black hole of ip. And because of that and because they're so litigious, that probably has stopped a lot of people from moving forward with their ideas. And so I guess my question for you is whether or not Story Protocol has a role to play in kind of unbundling in fixing this problem. Where do you think we went wrong from that original vision 600 years ago? Around Gutenberg Press Times. How do things got to where they are? **Speaker B:** Yeah, this is a really, really interesting question. And I think that it's interesting if we're continuing that historical perspective to think about storytelling in general. It's, it's not naturally a siloed activity. Like, like storytelling and myth making is one of the things that makes us human. Like you got. I'm not an anthropologist, but I imagine our ancestors gathered around the campfire to tell stories and those stories were modified and remixed by each generation to sort of accommodate the new things that were happening in that generation. And ultimately like when writing was invented, you could write these things down, moving from the oral tradition and encode them. So that's how you end up with these sort of founding texts like Homer, Homer's Odyssey. There's so many, so many characters in this, probably because it was accumulated through generations. There's this organic Darwinian remixing that naturally happens. But then again, Homer probably wasn't a very wealthy person. He probably didn't make much by writing the Odyssey because you know, there wasn't IP rights to protect that. And so I think there is a real benefit to IP rights, but that benefit may have been taken too far. So now we're in this new era where it's almost the antithesis of this organic Darwinian storytelling that was practiced by the ancients. It's now this extremely siloed behind closed doors activity where corporations as you mentioned, dominate ip and in some cases they keep it very close to themselves. Right, they clip it close to the chest. And so I think it's probably gone too far. You want to have value capture and that entails a little bit of scarcity as we talked about, but you don't want too much scarcity. And so I think what story protocol is doing is we want to work, I mean also with the Disney's of the world, if they're ready for it. We want to help them turn their IP into a network. And we're seeing that in gaming. This is actually something that's starting to happen where game developers realize that you need to have user generated content like gta, Roblox, Minecraft. The biggest games are also platforms for creation. And so I think for gaming IPs at least they've started to realize like you can't really keep things ultra closed. You have to allow creativity to happen from the bottoms up. I don't think that other forms of media are as close to that yet, but I do like, we do want to work with these companies. I think that the alternative though is, to be completely honest is if you look at any sort of new media technology, it generally arises because it, it empowers a class of creators that have been neglected before. So this is very prevalent on social media. Like, like, you know, when, when everyone's parents were on Facebook, then people started using Instagram and then when Instagram became too mainstream, then you, then you had high schoolers using Snapchat. Right. And so in YouTube. YouTube didn't target Hollywood film creators and video creators. They targeted this new class of people that were creating videos at home. And of course they were lower quality and made a lot less money, but that's what it takes to develop the Mr. Beast of today. And so story protocol. We certainly want to work with the large companies of the world and open up their IP to their community in a measured way. But we think that probably a lot of the early users will use our tools and there will be people that weren't able to get things done before. So it'll be someone, you know, maybe like a USC creative writing students putting their ideas, all their characters and stories on chain setting licensing terms and then doing a mass marketing campaign on social media, getting, you know, a lot of people around the world to build on that IP and create a universe together. And we think that allowing these communities and network effects to accumulate through open source IP with value capture built in, it is going to create the next Marvel. It is going to create the next, you know, next big franchise. So there's basically two models. We can either work with the large companies now and sort of make them more open, or you know, we want to do both, which is enable smaller creators that are currently neglected by the creative system to, to come up and build their own ideas. **Speaker A:** Yeah, and I think, I think maybe the answer to this question is like the always the same answer with all crypto things, which is like before crypto and these rails and like these opportunities, it like the world has gotten so complex and just like, I'll just stick with complex, but that it led to a situation where like the only way to survive and to thrive was to like skate as fast as possible towards Monopoly. And like it's all about consolidation of power. And like we can talk about it like literally in every industry from entertainment to like the beer industry to anything. Right. But what crypto does is, like, we love to say it, democratize, you know, democratizes whatever. But what it does do is, I think you put it in a much more realistic way, which it serves like the class of people that are locked out by, like, the way things are set up today. And so I think maybe the reason Story Protocol is, like, a solution to how, like, perverted IP laws have become is because it allows, like, creators that don't have the resources to hire lawyers and to, like, look into how to weaponize the legal system the ability to, like, still, like, extract all the benefits that, like, were placed there by our social contract to benefit them. **Speaker B:** Right, right. Exactly. **Speaker A:** Awesome. Cool. All right, so let's, let's progress. Progress this conversation a little bit further and, like, let's talk about how this actually works. So can you give us just not a technical breakdown, but just a brief description of, like, when I'm using Story Protocol, like, what, what are the different pieces? How does it work? **Speaker B:** Absolutely. So the way we think about our protocol at a high level, just defining literally what it is, it's a set of smart contracts that we've written that can be deployed really on any chain. Right now, we're currently focused on evm, but it's a set of smart contracts that essentially empowers two different categories of functions that are very related. So just colloquially, the first class of functions, what we call nouns or data structures, they're the stuff of the protocol, the ip. And then the second class are what we call verbs or modules. And that's the sort of abilities that get unlocked once you register your IP on Story Protocol. And so just to go a little bit deeper into the nouns, what we've created is essentially a universal IP layer for programmable ip. So we take IP off chain or on chain and allow you to bring it onto our protocol in a set of standardized data structures that we define for basically maximizing composability around different types of ip. And so you take your ip, whether it's on chain or off chain, bring it to Story Protocol, and it becomes programmable ip. And so you can set the rights and the terms for how that IP can be used. So you can tell, you can say, if you know, I own an NFT, that someone must pay one ETH up front and share 50% of any revenue that they generate from using my IP, and they can use it in these regions. Right. So it's a very simple on chain parameters that distills the complexity of a legal license into Code, of course, one thing that we can get into later is that our IPs actually do link to a license off chain. So we've actually created something as a company called the Universal Media License. So we have a story protocol Universal Media License. And it's just very simple to read, legally binding license with parameters that people can choose from. So it's almost like, think about it like a YC safe but for story protocol. And so we think this will capture like 99% of the use cases that people need. So they'll have a legal license that allows them to have the rights over what they've registered on chain. And then those rights and terms are also enshrined on smart contract level too. So there's this link between off chain IP and on chain ip. So that's the nouns part. We're creating a universal composable IP layer for programmable IP that can talk to any medium, live on any chain, and really be a sort of infrastructure, core infrastructure for the Internet. We see. And then why is this important? Well, obviously if you register things on sort of protocol, there's the provenance and the attribution that you get for free. But then really the modules are what make this protocol so powerful. And so once you've registered your IP as a noun, you have access to our verbs, so you have access to these modules. In particular, we built a sort of remixing or licensing module that allows you to set the terms for engagements on how people can use your IP and then allow people to build essentially an IP graph or an IP network around that intellectual property. So let me just give you a very concrete example. If I register a pro story on story protocol, it's registered on chain, it's an nft, it has, you know, all these metadatas attached to it that, that are relevant for licensing, it has on chain rights. And then I would use a licensing module to say who can interact with my ip, what sort of economic terms are there? And then if anyone else, let's say someone from around the world sees this on an app and any app can surface this, right? So like, you know, it can be on OpenSea, it can be on a new app. That's kind of the power of the protocol. But let's say they see see it on some client or some front ends and they say, oh well, I can, I really love this story and I want to create a comic around it. As long as those rights are acceptable, as long as I meet those conditions, let's say I pay 1 ETH to the smart contract. And there's a royalty link such that if I create this comic and make five bucks, then, you know, 5 ETH and 2.5 ETH flows back, back to the original creator. These are all set automatically. And then I can go, or whoever is making this comic book can go and create a comic book. And that itself is an IP asset. So, so it's IP assets all the way down. Right. Everything that's a derivative is literally, you know, also a progenitor, possibly of a whole tree of its own. And so you have this graph like growth with money and economic and legal terms flowing through each edge of the graph. And that's really what we built is, is this very extensible protocol that allows anyone to tap into our ip. And it's almost like IP liquidity, the way that Uniswap has LP liquidity. Farcaster talks about conversational liquidity, story Protocol talks about IP liquidity. And that's really what we're doing is allowing IP to be super legible and standardized and then also making it liquid in a very real way. **Speaker A:** Yeah, so everything you said makes so much sense. I think it might be helpful to just like, let's step off chain for a moment and talk about so ip. Right. It is just basically like, you can give a much better summary, but it's like the idea behind the project you're embarking on. And so what we're saying is we can take this idea, we can basically convert it into metadata attributes and then have it in a smart contract on Ethereum, and then based on these programmable set of rules that you call verbs, that can dictate how that can be used by future creators. And that not only dictates how they can use it, but how the economics flow back and forth between original creator and new creator. **Speaker B:** Exactly, exactly. **Speaker A:** So I guess, like, for me the, the big thing is that like IP in the real world is like just totally a legal construct. Right? Like, it is, it is something that we have just decided that like, as a society, we've created these like relatively arbitrary laws that if you break them, like our system will tell you that that's like wrong and like seek restitution. And so I guess, like, what I'm wondering is as you're building out story protocol, like, how does that interact with like how IP works today? Like, how are lawyers involved? Like, as a creator, am I relying on like story protocol or whatever, you know, like Labs company is behind it to enforce these. Like, talk to me about what is the real world interaction between Story protocol and the traditional IP system. **Speaker B:** Absolutely. It's a great question. So basically, the way to think about SORT protocol is not that we are creating some completely distinct island of authority that is, you know, disjoint from the legal regime that we have in the United States and other countries today. Right. So we are actually deriving this. Reason why we even care about having a license is because we want to respect the authority of the existing legal system insofar as, you know, it's important for protecting copyright. Right. So we creators do care about this and they want their work to not just exist only on chain, but they might want to create T shirts or films that are shown in studios in different countries. So it is very important to creators to have this tie to the traditional legal system. But the way that I would conceptualize this is that imagine the legal layer that we currently have is at the very top. It's where authority derives from, but it's also extremely expensive, it's extremely inefficient. And so many different types of creative interactions just don't happen. Because I don't know as a creator what IP I can use. I can't afford a legal team. I have to go through a one on one negotiation. Even if I did have a legal team, it's all very expensive. And so 99% or like the long tail of licensing and creative remixing just doesn't happen today. Right. So this is the legal layer. So what we do is we say, okay, great, why don't you delegate some of the authority of the legal layer to the blockchain? Why don't you delegate some legal authority to ledger authority? And so that's why we have this tie to a legal license off chain. But really we think that 99% of licensing interactions can be enforced on chain using programmable ip. So the blockchain, it's almost like we're sort of delegating all of this to the blockchain and the code literally becomes law on the blockchain because we are enforcing rights that are enshrined in a legal contract via on chain rights that mirror that contract on story protocol. And so to sum it up, I think that we are essentially making the legal system more efficient and more effective by making IP programmable, by making these laws enforceable as code, so that there's transparency and composability built in. And just making analogy with defi. I think that one of the early promises of crypto is that everything's programmable and that everything's composable. I Think that promise has really been realized in the world of decentralized finance, where you can put your tokens into compound, generate C tokens, swap C tokens on Uniswap and the list goes on. Right. It's very composable, but I haven't seen that. I don't think that composability has been realized in the worlds of ip, in the world of creativity. So even though I, you know, we have a lot of respect for Yuga and Azuki and they really pioneered this model of putting rights on chain. If I wanted to take my bored ape and create a comic with someone else's Zuki, you're back to the existing legal system. You have to go create a license, figure out how you're going to share the revenue. And it's this high friction, high expense, low legibility interaction which prevents a lot of things from happening. And so we really think that the multiplayer storytelling, multiplayer IP in this promise of composability hasn't been realized in the world of content yet. And so that's what we see story protocol as is if DEFI is programmable money, then we are programmable ip. And so that's where we see crypto has a lot of improvement to do. And we hope to be kind of the underlying infrastructure that lets programmable ip, composable IP really come to life. **Speaker A:** Yeah, got it. So it sounds like the secret ingredient here is that in this, like I, I think you called it the story Protocol, like Universal Content License, right? Which is. Sounds like, you know, just like any open source license or we like we're all familiar with, with license are. But based on what you're saying, it sounds like that is like an explicit legal contract that like you as a creator are entering into that says, you know, like based on, let's say like the laws of like a specific state maybe or the federal government or maybe a specific country, I don't know. But based on these laws, like if we get into a legal conflict and like if a judge is evaluating this, they have to go refer to what is ever being expressed on chain. And like, look at that for like the resolution. So for my first question, is that sound right? And my second question is like, we'll never really know until this is tested through fire. But like, do you, how, how much of a leap is it for a judge to say, like, okay, like I believe in this blockchain thing and whatever this blockchain thing is reporting out to me is like, what I need to go reforce, Sorry, go enforce in like the real physical world. **Speaker B:** Yes, yes, great question. So first of all, absolutely, our Universal Media License, it is a real license. We've worked very hard with some world class lawyers and legal counsel to create it. So it is 100% part of the legal system. And, and there is an option on that license whether you want to choose your license to be legal authority or ledger authority. So legal authoritative would imply that if there is a disparity between the on chain states of story protocol and you know, the off chain states of your ip, then the off chain legal reality is authoritative and then ledger authority, which is the default option we recommend this is that the state of the blockchain is reality, it is legality. You are sort of again delegating the responsibility for IP to the blockchain two story protocol. And so in that case, if there were conflicts between the on chain states, like let's say someone somehow takes your NFT that represents your ip, then that would be the reality. Right? So there are of course risks, but I think that there are also a lot more promise. There's also a lot more promise when you can enforce rights and IP interactions automatically on chain. So there is a difference between leisure authoritative and legal authoritative. We give people the option, it's one of the parameters in the Universal Media License. But ultimately it is a legal license that will hold up. And it also gives people the choice to say, hey, I'm crypto native and I'm going to allow story protocol in the blockchain to determine the ground truth of my rights. **Speaker A:** And sorry, I don't mean to like drill so hard into this point, but I do think that it is like the, the secret sauce that you guys have created. I guess. So what you're saying makes so much sense to me in cases where we're talking about creating a like, asset that has some sort of create, sorry, crypto native ness. And then like, if someone wants to like actually use the crypto nativeness, we can enforce via smart contracts, like fees flowing through in any specific ways, like totally makes sense. Like that's the point of smart contracts. Right? But what about the flip side of the problem where let's say I say that you are welcome to use my NFT that I just put out there as long as you share 10% of like revenue with me. And then I go see that like, hey, this guy just made $2 million using my NFT and like didn't give me a cent. Like how, how, how would I as a creator, like leverage the work that I've done? Using story protocol to go like, resolve this situation. **Speaker B:** So there's, I would say, different levels of escalation and obviously we want to keep things as permissionless and frictionless as possible because the legal system is difficult to say the least. Right. So the way that this would work in your specific example, which is a good one, let's say I've set some conditions for who can use my ip. One of those conditions is that you need to pay me 50% royalties. And I noticed someone just making tons of money off of my IP and not sending me any eth in return. In that case, the first line of defense is we built a royalty module that works with our licensing and remixing module such that it shouldn't happen, this shouldn't happen. We should automatically be able to see that revenue, if it's all on chain, I should say that revenue came into this user's wallet and that this user made this commitment and therefore, you know, the revenue should flow automatically. So we have this sort of royalty protocol, right? But let's say someone, you know, malicious creates a separate wallet or somehow, you know, doesn't get permission. Right? Like, so they didn't even, they didn't even accept this license term. They just saw it on OpenSea or some other NFT marketplace and they're like, oh, this is a great piece of art. I'm going to do my own separate thing. Right? So in that case our royalty module wouldn't be able to see that, you know, any revenue had come in because there was no connection made. Right. So in that case, what we've created is also a dispute module. So it's almost thinking about like on chain court system and we can connect to existing arbitration systems like Claros or any custom smart contract really that allows people to settle disputes. And so there's people can choose how they want to settle a dispute, but there's basically an on chain arbitration system that determines who's in the right and who's in the wrong. And if they're wrong, then of course there are, you know, your IP is marked as invalid. And so that would take care of the problem on the blockchain level. So you have these different levels of escalation on chain, which the first is that this shouldn't happen because a royalty module helps enforce this. And then the second level is if for some reason something happens, you have an on chain dispute mechanism. So those are the first two layers. But then in the final analysis, if there's still no proper resolution, then you can go and use the fact that you have a license and that this is a real legally binding IP and take it to court in whatever jurisdiction you're in. So that's the ultimate escalation. And our goal is to make 99.9% of things automatically enforced. And then, you know, only 0.1% needs to go to dispute and then only 0.1 of that needs to ever go to the legal system. Reality now is that 100% of things go into the legal system. And also there's like no visibility. So it's even very difficult. There's a whole industry to try to figure out what's going on with your ip, is someone misusing it on chain? You know, you don't even have that problem. It's much more legible. So we think that again, we're not trying to usurp the legal system in any way, but we are trying to make it more efficient by bringing it on chain. **Speaker A:** I hear you and I think that like, so if you'll indulge me for a moment, I entered crypto like from Defi. I like I used to work at, in corporate finance, like cash management. And like I thought like okay, this curve, like all this crazy stuff is just going to be like the new way that finance works. And you know, that was 2021 and like there was a, like Do Kwon was in there. At some point SBF came, came and left and, and I, I still very much believe that crypto is going to completely transform finance. But like I don't think that it's like any of this like defi crypto native stuff. Like what I see that's really transformative is like I used to have to transfer like billions of dollars of fiat like regularly for my job. Like we would have to do cash transfers from our North American business to the European business or we would have to do like huge tax payments or whatever and like it's a total shit show. I could go on and on, but the reality is that it doesn't really work. And it's so easy to just use Ethereum to send value, whether that's Ethereum value or USDC value or NFT or whatever, but it just works. And that I think is going to completely transform how finance is done. I bring that up because what I'm seeing here is very similar because look, I'm definitely bullish and excited about all of these things. You're talking about the composing usability and this expressibility and like all of this like truly like Defi esque stuff that is going on that STORY protocol is building, but what I think is just like almost more profound and really going to transform the way things are done are just like you're building a way for like blockchain, which, what is the purpose of blockchain? It's an immutable ledger. You're building a way for blockchain to ingest IP data. And all that's doing is giving us a record by which in the future we can build like dispute resolution systems, we can build like revenue attribution systems. We can do like, whatever we want with it. But like step one is like, we need records that actually work. **Speaker B:** Absolutely. And this is why it's so important for us. And we've even put in the name to be a protocol. Like, we are not Story IP Repository Services Inc. I mean, that would be a horrible name, first of all. But we are Story protocol, right? And say what you want, whether you think it's a good name or not, it's descriptive because we're building a layer that allows anyone to build on top. So we are, as you said, we're aggregating all the world's IP in one place. It's completely transparent. And then we're giving people the tools to extend that IP. So the two benefits is one, legibility. If you go on copyright.gov, you will see a Craigslist style worse than Craigslist style ui and you can search up Cinderella, Darth Vader, anything. It's extremely hard to figure out who owns the ip, whether I can license it, who else has licensed it, what's the cost? Right? There's no legibility. So we're providing legibility at a protocol level. And then as I said with the verbs and the licensing module, we're providing expandability or liquidity. Right? The ability to not just know what's going on with ip, but also be able to use it and be able to extend it without having this complex conversation and expensive legal negotiation. But that's it. We provide those two values and whatever you want to do with them, that's up to you. So there's several layers of how people can build on our protocol. One thing we're already seeing is what if you want kyc, like, what if you want to be more web two, you can integrate a KYC hook and, you know, before you register ip, you can, you can do a hook to a KYC provider and check that this person's kyc and then you can store that on sort of protocol, and then people might have more trust around that ip. Because it's been kyc. Right, that's just one option. It's not mandatory by any means, but you can start to extend our protocol using these hooks. We, you know, we've talked with copyright infringement companies. What if there's some off chain thing? What if I just took Mickey Mouse and put on story protocol? That would be pretty bad, right? But like how do you give story protocol visibility off chain worlds? You can connect an API into the protocol that talks to a copyright infringement provider and then they can say, oh well actually, you know, we can label this on chain as something that has, is a duplicate of something off chain. Right. So now you give perspective into the off chain state. And then we've also imagined and are working with so many different design partners, I can't really announce them now. But for example, there's some in social media with, you know, lots of users where every publication can become a IP on story protocol. So there's social media cases. We're working with AI companies to register models on chain as IP and then anything they produce is also tracked as a derivative work, creating a graph around models themselves. We're also working with Hollywood producers to create brand new universes on chain and also with very, very web. Two companies actually that don't even want to think about the blockchain like creator tools with millions of users that just want to register their IP on chain and the UI and experience is completely abstracted away from the end user. So I point out all these ecosystem partners really to show that it's almost like in some sense like Ethereum, where you know, there's like, what is the one use case of Ethereum? There's not one single use case. We're building a very, very neutral protocol that enables developers and app builders to realize their visions for their end customers. **Speaker A:** And like you bring up like so many like just crazy like racing thoughts when you start talking about design partners. And I guess my question for you is like, as you look towards like the endgame success of story protocol, how much do you think it is necessary for story protocol to become integrated with like the like main content hub platforms? Right? So like the YouTubes, the TikToks, the, I don't know, Instagram, I guess. But like these places where like content like kind of like lives and like grows in this primordial, just like, I don't know, cyclone. Right. And first question is how important do you see that is? And second question is how do you convince these tech giants that it is more beneficial for them to begin to integrate These tools that allow the really free flow of ideas out of their walled gardens. And how do you fight against that just very prevalent Web2 vibe, which is the goal is to gather as much data and keep it internally and keep as many eyeballs and creators in your platform as possible. **Speaker B:** Yeah, it's a really good question. So I think, you know, I would like to live in the world where we don't have to create a new system from the ground up and that these existing tech giants will adopt story protocol and adopt Web three principles. I mean, that would be great for everyone. I think. That being said, I think you're absolutely right. Like a lot of these platforms, they have every incentive to keep their IP closed. And so that's the status quo. We have talked to, I can't name any, but right now, but we have talked to some pretty large content platforms that have been very interested in this. So there are, there are, I think, some leaders in the space in traditional entertainment, traditional content platforms that will lead the way and they will prove, I hope to the other, other platform giants that this is more viable path. So I think there's. Part of it is that there always will be some early movers and then they will show the way and we hope to collaborate with those early movers and we have been talking to some of them. On the other hand, I do think, as with any sort of content or media revolution we talked about before, it's generally a paradigm shift, right? And I see story protocol and on chain ip, programmable IP in general as a paradigm shift. And so the first people to get it are not going to be the incumbents. They have every incentive to ignore this trend. Right? And so I think that there will be new content platforms and there already have been some attempts at this in social media on chain that will leverage this new IP regime and we will see those grow bigger and bigger and bigger. And I think that competition will really push the incumbents to either adopt or to die out. Right. And so I think that you see this at Google too, where I think that Google has had the capabilities and the resources to create ChatGPT. But of course it was OpenAI that did it and that forced Google to create Bard. And so you could see a very similar effect here where even if the native on chain new content platforms don't win out, their contribution will be to force the hand of the existing incumbents. So I'm optimistic that we can have some incumbents adopt this technology, even in a limited way, and show that it's better. But I think that the more realistic path is that as with every media revolution, it's a completely new group of neglected creators that then become prominent on the back of a new technology. **Speaker A:** Yeah, I think the example that just popped into my head is that stories, right, like, that was a Snapchat feature that every other company was like, literally, who cares about 24 hour. Like, like things that disappear. This is so stupid. And now like, literally there's not a messaging app or a social network or like even LinkedIn has stories, Telegram has stories. Like what? And so it is just like, I think it's a reflection of like, there's so many examples in technology where like incumbents are initially resistant to a transformative like paradigm or technology or hard to call stories, like, transformative. But like, first they fight you, then they like, join you. **Speaker B:** Absolutely, yeah. And I think, I think we will start to see that. And to be honest, it's, it's interesting. Looking at the market, I do think the Asian market in general is much more ahead of the Western market, so to speak, in, in content. I think a lot of, A lot of trends in gaming in, in content and mobile, they come from Asia for whatever reason. I think that there's a lot of reasons we don't have to get into, but, but we're seeing a lot of adoption in anime. We talked to anime studios in Korean, in Korean platforms. I think we've talked to a lot of them and they're all very interested. And I think that it's a very different culture there than in the US especially. So again, if history is any guide, we'll see that the Asian sort of ecosystem might lead and be a good indicator of the future. So I would suggest people check out some of the content platforms there. They're already doing things very similar to story, where people can kind of. Sorry, protocol, where people can kind of build on an IP together in a community. They just lack the sort of global layer to make it composable with any other platform and to monetize it. But I think it's already happening there and I think that it will only be a matter of time before it gets adopted in some of the content platforms closer to home. **Speaker A:** So with the last few minutes here, I want to queue off something you said about AI, like generative AI. And so I'll let you kind of run a little bit wild here, but like, just to put you in a frame of mind. So like, I am so, so convinced that crypto and AI are like two sides of the same technology. And I don't know what that looks like or really even what that means. But when I think of like what AI is, it is about abundance, right? It is about just like creativity and just like generation and again abundance. And when I look at crypto like it is exactly the opposite. It is about scarcity and it's about slowing things down and it's about identity and like. Yeah, and scarcity really. And so like I know that, that like we're entering the apocalypse unless we can like start to like figure out attribution and start to like give some identity to these like programs that are getting smarter than us. And I've said that like spiel a few times before and people just kind of like laugh and you know, go off on on their own thing. But this is the first time like I'm starting to get a sense of how this is going to work out. And like what you said about chat or generative AI models and how, you know, that can start as like a IP in Story protocol and then that can be used to like spin off more IP which can be, you know, like ingested by other generative AIs and like things. Through the power of the blockchain we can figure out like at what point do like models get attribution, at what point do like people putting inputs get attribution and like I'm starting to see how this all kind of works out. So that was a little bit rambly like. I guess my question for you is like, with what you're building in Story Protocol in mind, like how do you think about like all of this exciting developments in generative AI and like what it means for crypto? **Speaker B:** Sure, yeah. I think that there's some surface level observations that people have made which I think are directionally correct. So I'll just sort of enumerate them. The first is that crypto is decentralized and AI is centralized. Right. I think Peter famously said AI is communist and crypto is capitalist or libertarian. Right. And I think on the surface level, I think yes, AI favors centralization. We Talked about how DeepMind is one of the few companies that can really build a top notch foundation model. But in crypto anyone can participate. So yeah, there's truth to that. AI is abundance. We talked about how AI is content abundance earlier. But then with ip, right, crypto provides the scarcity that's needed. So I think that's also a true tension between the two technologies. On the surface level, I think the immediate effect you'll see is that there's going to be more creative content. And that's going to be good for everyone, not just crypto. Everyone's going to be a creator. The cost of, the diminishing marginal cost of creation on the Internet is going to be near zero, right? So that's, that's obviously a huge effect. But what I think is extremely interesting is to think about what happens if AI takes off without crypto. So let's just run that thought experiment. I think you're going to see that eventually there's going to be a tragedy of the commons, where AI, because it makes data, it just consumes data and produces output so cheaply, there is no incentive to produce unique data, right? So the best example of this is search engines right now link to websites, right? So there's a real reason for websites to exist. But if you have a social, if you have a search engine model that doesn't link to websites, it just summarizes text and it tells you the exact right thing, that's great. Like, I'm not saying that's not a great end result for the user, but then who's creating websites? Like who. Where is this traffic going? There's no one's going to be able to maintain a website because they're not getting any traffic. And so these websites will die and the training data that provides the model with its effectiveness will die. And so if you have AI, without proper compensation and attribution, AI will eat itself, right? You will have huge tragedy of the commons, where, yeah, you will have increasing returns until the commons can no longer support itself because AI has eaten it all, right? And so crypto is essential because you can't have AI with. This is why I talked about the Gutenberg Press. Imagine what would happen to creativity if the Gutenberg Press came out with no IP laws to come shortly after people, I mean, no one would create anything. Why would I, why would I spend time to create something that's just going to get copied by someone with a printing press? I'm not going to do that. And so I think in a similar way, with AI, you need, you need crypto, because crypto is provable scarcity. Crypto is on chain IP and programmable ip. And without crypto to provide monetization and incentives for people to continue producing data, even if that data is just training data, the AI can't function and the AI will eat up the commons. And so I think that's why I'm so passionate about what we're doing at storypritical. And also it does relate to some of the work I was thinking about at DeepMind, which is that we see Story Protocol as the home for AI on chain. It is really providing the ability for the commons to exist on chain for AI. And so that's where I see the real intersection, is that really AI cannot sustain itself without Story Protocol and without the crypto rails that the protocol is built on. **Speaker A:** Yeah, I think that's like, super interesting to think about how that kind of, like, nature kind of balances itself and that if AI doesn't have, like, the proper structures around it, it will create situations that directly result in its own demise. And I think that's super applicable for the search engine example. I struggle a little bit more to, like, how that is applicable to, like, let's say, AI, like altering photos to, like, let's change an election or start a war, that kind of thing. But I still think crypto is the answer, and I think that is really the other side of what Story Protocol is building is in just that attribution. And like, if we can see that, like, when the first time the photo existed, like when, like, basically what, what you're doing and what crypto allows us to do is like, create a record that is immutable but is in a context and by which, like, AI can actually see. And I just. I see. I, like, I'm very excited about how. Yeah, what you just said is very cool about how AI is going to eat itself. And I think that what Story Protocol and what crypto does is like, provide the context for AI to have enough information to not eat itself. **Speaker B:** Absolutely. Yeah. And that's just one facet. Right. I think you brought on very interesting points. We're working with some partners, actually, at Story Protocol that are working on other chunks of that problem. Not just tragedy, the commons that I just mentioned, but also, as you mentioned, how can we trust the output of models? How can we trust that something actually came out of a specific model and not a malicious model or not a model at all? Right. So verifiable Compute ZK technologies, they're solving that trust problem. And that's also very important, of course, the provenance and attribution for the data upon which that model is trained comes from Story Protocol. So I think there's a natural interaction and compatibility between the layer that we're building and a lot of these ZK provers for AI models that we're seeing built on top of us. **Speaker A:** Very cool. All right, man. I could keep going for like a literally two more hours. Like, I want to talk about. Just continue down this conversation. But I also want to talk about, like, what verbs can actually do and the type of applications that we're seeing. But I think for the sake of everyone's attention span, I'll cut us off here and then I'll make sure bring you back eventually to talk more about how Story Protocol is developing. So, first of all, I just want to say, Jason, thank you so much. Like, this has been like, so eye opening, both on what IP really is, but also like, how blockchain is going to start to transform the world outside of, I'll say finance, but what I really mean is just like casino antics. So first of all, thank you. Thank you, thank you. **Speaker B:** Of course. Yeah, thanks for having me, Rex. This is a great conversation. **Speaker A:** Of course. And before I let you go, can you just share with the audience how they can find you, how they can find Story Protocol and if they're interested in to start figuring out how they can deploy their IP on Story Protocol, like, what are the best ways to get started and what are the things to be thinking about? **Speaker B:** Yeah, absolutely. So our alpha version is out, so if you go to Docs storyprotocol xyz, you can find them and there's a lot of tutorials there. We are launching a beta version of the protocol at ETH Denver. It's going to be a big launch for us and we hope at that time to really find a lot of the key builders and teams that are going to build the core infrastructure on top of Story Protocol. So we have a grants program that we're building. We have opportunities for entrepreneurs and residents to work with us. So definitely come to ETH Denver or reach out to us on our Twitter page. And then also I'm always open to chatting with builders who are interested in this sort of intersection of crypto and programmable ip. So you can find me on Twitter Jason Jzal, and that's spelled Z H. **Speaker A:** A L. Awesome, man. Well, super exciting. Like the. I can't even believe the beta is right in front of us. And yeah, Eat Denver. It's. I'll see you there. And it sounds just like a really big moment for, for people that are excited about, like, bringing IP on chain. So good luck and have a great rest of your day. **Speaker B:** Thank you, Rex. Appreciate it. Sam.