Author: Xiyou, ChainCatcher

As a crypto project that has been led by a16z in three consecutive funding rounds and was once valued at $2.25 billion, the recent performance of Story Protocol has left community users astonished.

On February 13, Story Protocol finally revealed the details of its highly anticipated airdrop plan. However, contrary to the expected generous rewards, this airdrop plan has sparked considerable controversy and dissatisfaction. Many studios and investors have expressed that the conditions for this airdrop are overly stringent, with three layers of defenses for witches, and the amount of airdrop tokens distributed is far below expectations, leading to a situation of "reverse farming."

To make matters worse, on the same day, the Story Protocol token (IP) officially launched its TGE and was immediately listed on exchanges such as CoinBase, Bithumb, and MEXC. The market performance of the token post-launch was also shocking, with the price dropping from an opening of $2.30 to a low of $1.70, resulting in a situation where the market capitalization in the secondary market has fallen below the financing valuation.

This series of events has undoubtedly dealt a heavy blow to the community users of Story Protocol. Many users have expressed that their disappointment with the project's performance in the airdrop plan and TGE is hard to articulate, and some have even begun to question the long-term development prospects of the project, with some users publicly advocating for their rights in the official Story Protocol community.

Strict Airdrop Conditions: Quantity Far Below Expectations, Multiple Witch Defenses, Must Meet 20 Points on Gitcoin Account

The controversy surrounding the Story Protocol airdrop tokens mainly revolves around three points: the number of airdrop tokens distributed to users is far below expectations, the witch review conditions are too strict, and the threshold for claiming the airdrop is too high.

Regarding the number of airdrop tokens, the amount directly distributed to community users is significantly lower than expected, reduced from an initial 10% to below 5%.

In the token IP economic model announced on February 7, the total supply is 1 billion tokens, with an initial unlock of 25%, of which 10% of the tokens will be used for early user incentives.

However, this 10% of tokens is not the amount directly airdropped to the community; only 5% is directly allocated to users, and users cannot fully unlock them on the first day of TGE. They need to gradually release them through a series of ongoing initial incentive activities; the other 5% will be allocated to ecological projects, which will distribute them to users through their incentive activities.

This arrangement has shattered the direct claiming fantasies of many investors, leaving many disappointed. Additionally, as the official stance is to severely crack down on farming behaviors, many farming amounts will be filtered out, and unclaimed user incentive portions will be redistributed to the project party. This means that the actual proportion of tokens allocated to ecological projects may exceed 5%, while the share directly distributed to community users is far less than 5%.

In this airdrop, Story Protocol has shown a zero-tolerance attitude towards witch behaviors, implementing an extremely strict screening mechanism to combat witches and farming.

According to information disclosed by the official party, Story Protocol has hired three independent companies to provide advice and analyze on-chain and off-chain behaviors to filter out witches.

Even if users successfully pass the witch screening, they must still meet a certain Gitcoin Passport score (20 points) threshold to prove their uniqueness and withdraw tokens.

This requirement from Story Protocol undoubtedly raises the threshold for obtaining the airdrop and excludes studios and farmers that create multiple accounts. Some community users have expressed grievances, believing that the project party should have clearly stated at the beginning of user interaction that participating addresses need to meet certain Passport score requirements, rather than suddenly introducing this condition just before the airdrop after users have already invested time and effort to complete interaction tasks and contributed interaction data. This approach has made some users feel that they are being "abandoned" by the project party.

Additionally, there is controversy regarding the airdrop conditions for the Chronicles Genesis NFT issued by Story Protocol last year. Some users have questioned the potential for unfair insider trading, known as "mouse warehouses." Specifically, the project party not only requires community users to hold Chronicles NFTs but also sets an additional threshold of needing to hold Odyssey NFTs simultaneously to qualify for the airdrop. This dual condition has left users who purchased Chronicles NFTs to obtain the airdrop facing losses. It is reported that the purchase price of these NFTs was around 0.1 ETH.

IP Token Secondary Market Breaks, Valuation Inversion

In addition to the harsh controversies surrounding the airdrop event, the market trend of the IP token has broken the psychological barrier of community users. After launching in the secondary market, the IP token has encountered a break in price, with the price falling below its original valuation, showing an inversion phenomenon.

According to OKX market data, since the IP token debuted in the secondary market on February 13, its price has continuously declined from an opening price of $2.25, dropping to as low as $1.70, with the current quote at $1.92. The total market capitalization has now adjusted to $1.92 billion, and the price in the secondary market is below its early valuation.

Although valuation inversions in the secondary market are not uncommon in the current cryptocurrency field, it is worth noting that Story Protocol is a crypto project that has been led by A16Z three times. Last August, the project successfully completed a $80 million Series B financing led by a16z Crypto, with a total financing amount reaching $140 million and a valuation that once peaked at $2.25 billion.

So, why is Story Protocol, which has received such substantial funding, performing so poorly? User @lejintian666 pointed out in a tweet that the biggest problem with Story Protocol lies in the lack of performance. Since the story behind the project has not yet materialized and lacks actual performance support, maintaining its valuation is naturally difficult. The entrepreneurial team, in pursuit of profit, can only try to increase their leverage through strict witch screening, a practice that is clearly unlikely to win market recognition.

In light of the lackluster performance of the IP token in the secondary market, crypto KOL @ChenJianJason also shared his views on social media. He stated that all of Story Protocol's actions have been unexpected. Generally, airdrops and token prices are negatively correlated, but after the controversy surrounding the airdrop, Story did not stabilize market sentiment through price increases. Additionally, due to Story's failure to list on major exchanges and not paying listing fees, combined with the limited number of airdrop tokens, the market has become scarce, almost turning into a "single-player token." However, looking back at other projects that also received significant VC funding but did not list on major exchanges, their secondary market performance is often outstanding, proving their strength and value through price increases. Yet, Story's current performance is disappointing and seems to have fallen into a state of neglect.

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