Story delays $IP token supply unlock as usage lags and dump fears grow

Layer 1 blockchain Story Protocol has delayed the scheduled unfreezing of its $IP token by six months, opting to keep a larger share of supply locked for longer as debate intensifies over how crypto projects manage token releases.

In a statement, Story said the decision is part of a broader set of long-term measures aimed at strengthening alignment with its community and reinforcing the network’s economic foundations, describing the delay as a way to introduce new liquidity more gradually alongside lower emissions and wider participation.

“When we launched Story, our mission was to build foundational infrastructure for programmable intellectual property,” Story said in a statement. “While that mission remains unchanged, our understanding of where the strongest traction is forming, and what long-term success requires has continued to evolve.”

The $IP token is trading around $1.45 to $1.50 right now. That's down about 32% over the past 30 days, worse than the CoinDesk 20 Index's 22% drop, highlighting the tough market conditions Story mentioned.

Under the revised schedule, the first major release of previously locked team, investor, and early contributor tokens will shift from February 2026 to August 2026.

Story says the change doesn't touch the total 1 billion token supply, individual allocations or legal ownership, and only alters the timing at which locked tokens may enter circulation. The foundation added that an automated smart-contract mechanism has been introduced to enforce the updated lockup terms, while emphasizing that it does not gain custody of wallets or the ability to move tokens.

Token unlocks are closely watched events in crypto markets because sudden increases in circulating supply can weigh on prices, and recent research has suggested that large releases often lead to delayed selling pressure rather than immediate rebounds.

Analysts frequently point to so-called low-float, high-fully-diluted-valuation launches, where a small portion of tokens trade freely while most remain locked, as a source of volatility and investor distrust when vesting periods expire.

On-chain metrics compiled by DeFiLlama show Story has had nearly non-existent activity so far, with less than $100 in daily on-chain revenue, underscoring how much of the token’s $500 million valuation remains tied to future expectations rather than present cash flow.

Late last year, Story's co-founder Jason Zhao announced he was stepping back from day-to-day operations to join a new AI venture.