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DATA Foundation pivot
A16z-backed crypto startup Story Protocol is rebranding as DATA Foundation and shifting focus to AI training infrastructure, with the company building blockchain-based infrastructure for verifying AI training data.
“a16z-backed crypto firm rebrands, shifts focus to solving AI’s global copyright headache The startup formerly known as Story Protocol raised $140 million to secure internet rights and is now building an audit layer for data consent, licensing, and provenance for tech firms”
Palo Alto-based Story Protocol, now DATA Foundation, raised $140 million to secure internet rights and is operating the DATA Network, an onchain registry designed to verify the origins, licensing and consent history of datasets used to train artificial intelligence models.
DATA Foundation’s Trace platform aims to provide cryptographic receipts that document the provenance, licensing, consent terms and payment history of datasets without exposing the underlying data, and Patel said, "Trace publishes the audit record, not the data."
Chief data officer Avi Patel told CoinDesk in an email interview on Thursday that the launch includes a direct integration with Kled AI’s opt-in human data marketplace, and the integration registers 1.5 billion user-contributed records on the new network.
Patel said the underlying data remains inside the marketplace and requires a licensed transaction to access, adding, "There's nothing to scrape on Trace because the asset itself is not stored there."
Receipts, fraud checks
DATA Foundation is integrating cryptographic receipts with a broader data-consent and provenance approach, including Poseidon, an AI data processing project that cleans and scores human data.
Poseidon runs a contributor app called Numo, which pays users stablecoins in real time for submitting authenticated data, and Patel said compensation is tied directly to completed transactions rather than advanced against future sales.
Patel said Kled also runs fiat payout rails alongside the stablecoin option, so contributor payments do not depend on any single buyer's timing.
To address legal scrutiny and data exhaustion from scraping the public internet, Patel said DATA Foundation plans to address this by launching Trace, a public audit and search platform that creates unalterable cryptographic receipts for individual data contributions.
Patel said his team is focusing development on an upcoming fraud-detection protocol to confirm that data is real, human and original rather than pirated or AI-generated, warning, "Labs won't license data they can't verify,".
Shutdowns and refunds
While DATA Foundation is pivoting toward AI data verification, the crypto automation startup Entropy is shutting down and returning funds to investors, citing scalability issues and difficulties finding product-market fit.
“a16z-backed crypto firm rebrands, shifts focus to solving AI’s global copyright headache The startup formerly known as Story Protocol raised $140 million to secure internet rights and is now building an audit layer for data consent, licensing, and provenance for tech firms”
Entropy’s founder and CEO Tux Pacific posted on X on Saturday that after four years, several pivots, and two rounds of layoffs, he had decided to close Entropy and return the capital to investors, writing, "it was time to shut the business."
Entropy launched in late 2021 as a decentralized self-custody solution and received Andreessen Horowitz backing alongside Coinbase Ventures as part of a $25 million initial funding round in June 2022.
The TradingView report says Entropy’s closure comes after the decentralized social network protocol Farcaster, backed by a16z, said on Thursday that it would return $180 million in capital to investors amid an acquisition by infrastructure provider Neynar.
Farcaster cofounder Dan Romero denied rumors of a potential shutdown on X, noting that Neynar would steer the project in a more developer-focused direction and that Farcaster continued to have strong usage metrics, while the article frames the move as a return of capital rather than a continued rollout.
