DATA, the blockchain startup formerly known as Story Protocol and backed by Andreessen Horowitz’s a16z crypto, is shutting down its own blockchain and moving to Sui after securing a $30 million investment from the Sui Foundation. Andrea Muttoni, CEO of DATA Foundation, told CoinDesk the shift will let the company spend more of its time on data verification tools instead of maintaining a standalone chain.
The company spent years trying to bring intellectual property onchain. After raising $140 million and building its own blockchain, it concluded that changing the way intellectual property is licensed around the world was harder than expected.
“We were trying to boil the ocean, and it was a very saturated and entrenched ocean,” Muttoni said in an interview with CoinDesk.
That realization helped drive Story’s rebrand to DATA Foundation in June. At that point, the company shifted toward the AI training data market. Four months later, it has narrowed the focus again, this time on tracking the origins and usage rights of data used to train artificial intelligence models.
From broad IP ambitions to AI training data
When the Bellevue, Washington-based startup was founded in 2022, its original plan stretched across music royalties, patents, trademarks and other forms of intellectual property. The idea was to let owners register those rights on a blockchain and set terms for how others could use them.
Muttoni said the problem was that many of those industries already had systems in place, while large rights holders showed little interest in making their intellectual property available for permissionless licensing.
“We were kind of spreading ourselves way too thin across so many different types of IP,” he said.
After the rebrand earlier this year, the team began asking whether it still made sense to maintain an entire blockchain when most of its work centered on one product: Trace. The registry records where training data comes from, who contributed it and what rights buyers have to use it.
Running a blockchain also carries costs, including engineers, validators, audits and infrastructure providers.
“Does it still make sense to run our own L1, or should we focus most of our energy on the protocol, on the product, on Trace?” Muttoni said.
That thinking led to the decision to shut down the chain and migrate to Sui.
Muttoni did not disclose how much of Story’s original $140 million in funding remains. He said existing investors, including a16z crypto, are still involved.
He framed the latest move as a continuation of the first rebrand rather than a fresh change in direction.
Trace targets verification problems in AI data markets
DATA’s new strategy grew in part out of the team’s experience with Poseidon, an AI data company incubated by the Story team that collects and processes data for AI model training.
Muttoni said the team found a market where buyers often had little way to verify whether the datasets they were buying were original, properly licensed or even exclusive. In one case, vendors offered Poseidon supposedly exclusive datasets that were already available from other sellers.
“We were at one point given our own data set back to us,” he said.
DATA is trying to address that through Trace.
When someone uploads a video or voice recording through a participating data marketplace, Trace creates a receipt for the file. The record includes when it was submitted, the terms accepted by the contributor, and any later licensing or payment events tied to that file.
Kled, a marketplace that pays people to contribute data, accounts for much of the activity. Muttoni said the platform is adding between 3 million and 4 million contributions a day, including older records being brought onto Trace.
Those figures show how much data is being registered, not necessarily how much has been sold. DATA did not disclose how many records have generated licensing revenue.
The move comes as more crypto projects turn toward AI and bet on rising demand for training data and tools that can track where that data came from. Muttoni estimates the AI training data market could be worth hundreds of billions of dollars.
For now, he said, DATA is not trying to compete with data marketplaces. The goal is to provide a record that buyers and sellers can check. “The main goal for now is being the infrastructure for, let’s say, the auditability and provenance of data,” he said.
He did not rule out DATA eventually operating its own marketplace, though he gave no further details.
What the move to Sui changes
By moving to Sui, DATA will no longer need to run its own blockchain. It will also gain access to tools that Muttoni said fit the company’s next phase.
One is Walrus, a decentralized storage platform that can hold copies of the original files registered through Trace. Another is Seal, which can encrypt those files and restrict access to buyers with the right permissions.
Today, Trace records information about a file rather than storing the file itself. Adding storage would allow buyers to compare what they receive with the original submission and make changes easier to spot.
Through the $30 million investment, the Sui Foundation will become DATA Network’s largest institutional holder. Muttoni said Sui is taking a hands-off approach to DATA’s product plans. Financial details were not disclosed.
The company also plans to move its existing token to Sui on a one-to-one basis. Its current blockchain will remain operational until the migration is complete. According to a press release, existing DATA tokens will move to Sui one-to-one, with holder rights and vesting schedules unchanged.
For Muttoni, the decision comes down to concentrating on the part of DATA’s original business that drew the most interest.
“We were thinking of going in one direction, but you see the wind keeps pulling you in a different direction,” he said. “Maybe the wind is coming from that way.”