Crypto Project That Raised $140 Million Shuts Down Its Own Network: To Move to Sui

$DATA, backed by Andreessen Horowitz’s crypto investment arm a16z, is undergoing a strategic shift that could send shockwaves through the crypto sector. The startup, formerly known as Story Protocol, has decided to shut down its own first-layer blockchain, which it had developed over the years, and continue its operations on Sui.

The company has reportedly raised approximately $140 million in funding since its inception. Despite this, management concluded that maintaining an independent blockchain required engineering, validator, security audit, and infrastructure costs, making it difficult to focus on the core product. As part of the transition process, the Sui Foundation will invest $30 million in $DATA.

$DATA initially aimed to license intellectual property, including music rights, patents, and trademarks, across the blockchain. The company later acknowledged the difficulty of disrupting the established structure of these markets and shifted its focus to AI training data.

At the heart of the new strategy is a logging system called Trace. Trace aims to record who provides the video, audio, and other data used to train AI models, under what permissions it can be used, and its licensing history. According to the company, between 3 million and 4 million contributions are added to the system daily through the shared platform Kled. However, this figure does not mean that all of this data generates licensing revenue.

The existing $DATA tokens are planned to be migrated to the Sui network on a one-to-one basis. While it has been stated that vesting schedules and existing token holders’ rights will be preserved, the old network will continue to operate until the transition is complete. Therefore, the shutdown and token migration are not expected to happen all at once.

*This is not investment advice.