PIP Labs unveiled $80 million in Series B funding Wednesday to flesh out Story Protocol, a layer-1 network for licensing and maintaining intellectual property in the digital era.
If crypto’s pioneers sought to cut out financial intermediaries from online transactions, then Story has taken aim at a common source of friction for creatives: lawyers. Empowering artists is one of PIP Labs’ biggest priorities, but the firm also seeks to address issues around artificial intelligence, as companies scrape the internet for heaps of data to train models.
PIP Labs’ Series B funding round was led by VC giant Andreessen Horowitz with participation from Polychain, also drawing investment from the likes of Walt Disney Imagineering executive Scott Trowbridge and the pseudonymous Cozomo de' Medici, an influential collector in the NFT space.
Lifting PIP Labs’ total fundraising figure to $140 million, the latest round follows the project’s announcement last year with backing from Samsung Next and Paris Hilton’s 11:11 Media. Andreessen Horowitz also led the previous round.
“PIP Labs is building the necessary infrastructure for a new covenant in the AI age,” Andreessen Horowitz Managing Partner Chris Dixon said in a press release. “Blockchains are perfectly suited for large-scale economic coordination, and Story's platform ensures creators are compensated.”
Story’s public testnet launches next week, providing a first look at the technology where users can register IP and access others’ work, while also setting parameters for licensing and monetization. When it comes to handiwork, such as viral memes, PIP Labs’ co-founder and chief product officer Jason Zhao told Decrypt that Story Protocol could provide a more lucrative alternative than traditional IP models.
“Your pen and paper lawyers, that’s just a medieval, antiquated system,” he said. “But a blockchain-based IP system can actually scale and maybe capture some of that value.”
Within the crypto industry, decentralized finance (DeFi) has flourished as developers look to create programmable systems for trading and lending assets. Dubbed IPfi, Zhao envisions a similar ecosystem, but intellectual property assets trade hands instead. With Story, IP assets will eventually be represented by NFTs, while licenses take the form of fungible tokens.
“Can I trade the rights or the license to Thanos?” Zhao asked. “Can we actually tokenize the world's creativity and [...] create new sorts of markets and financing structures?”
Using memes as collateral for loans would perhaps represent new ground for financial markets. Still, PIP Labs recognizes that a blockchain-based protocol can’t fully replace lawyers yet.
Creatives will have access to a so-called Programmable IP License, Zhao explained, if someone is leveraging their work outside the network. Effectively, the network has a system in place for accessing legal documents associated with registered IP, so creatives can take up legal action or strike deals in the real world.
Zhao worked for two years at Google DeepMind, a research lab and subsidiary of the tech giant. As a result, a large part of Story’s push is centered around AI. Using Story, Zhao said large language models can become registered as IP too, letting developers mix and match parts.
Story would also provide tech companies with data free of legal concerns, while simultaneously rewarding creatives. The New York Times sued OpenAI last year, for example, alleging the tech firm trained its AI model using the publication’s copyrighted work.
“They're just taking it for free, and then they're charging people to use their service,” Zhao said of user-generated content on the internet, from Yelp reviews to Reddit posts. “If this continues, basically what happens is there's no incentive for creators to do anything.”
Edited by Andrew Hayward