Crypto Investors Back $100m Bet on Blockchain Rails for AI Royalty Chaos

Institutional crypto capital is moving into one of the more contested corners of the artificial intelligence economy: proving who owns creative work and ensuring rights holders are paid. KOR Protocol has raised $7.5 million in a Series A round led by venture firms 1kx and Blockchain Capital, valuing the company at $100 million, to build an on-chain system for registering creative assets and routing royalty payments.

The round underscores growing investor appetite for blockchain-based infrastructure aimed at solving verification and payment problems that generative AI has made acute, rather than backing another consumer-facing AI application. KOR describes itself as a “creative asset clearinghouse” and is building on Base, the Ethereum layer-2 network operated by Coinbase, using stablecoins to settle licensing and royalty payments instead of relying on legacy entertainment-industry payment rails.

A verification and payments bottleneck, not a content shortage

KOR’s pitch to investors rests on data suggesting the industry’s problem has shifted from producing content to policing it. According to figures from music platform Deezer cited in the announcement, almost 75,000 AI-generated songs are uploaded to the platform daily, representing roughly 44% of all new submissions.

Yet those AI-generated tracks account for only 1% to 3% of total streams, and 85% of AI-generated streams are judged fraudulent and excluded from royalty payouts, the same data shows. KOR argues the constraint is no longer creative capacity but ownership verification, rights allocation and payment settlement — precisely the functions it wants its platform to perform.

Backers and a planned token

Beyond 1kx and Blockchain Capital, KOR’s investor base includes Republic Crypto, Sfermion, Animoca Brands, Solana, Avalanche, Alumni Ventures and SevenX. The company has told The Block it intends to launch its own token, a move that would tie the platform’s long-term economics to the wider crypto ecosystem and place it under the continuing scrutiny that token-based fundraising attracts from regulators assessing whether such instruments function as securities.

KOR’s raise follows a broader pattern of crypto capital backing blockchain-based intellectual property infrastructure. Story Protocol raised $80 million in a Series B round in 2024. Chris Dixon, founder and managing partner of a16z crypto, has framed the wider shift as comparable to bitcoin’s disruption of money, saying: “What Bitcoin did for money and finance, Story is doing for content and IP,” and describing AI as the catalyst for a new phase of Web3 built around programmable intellectual property.

Diverging technical strategies

Competing projects are not converging on a single technical approach. Story Protocol and rival Camp Network have each built dedicated layer-1 blockchains for programmable IP and provenance tracking, whereas KOR has opted to build atop an existing Ethereum scaling network rather than ask creators and rights holders to migrate to a new chain.

That divergence leaves investors backing several competing models simultaneously rather than consolidating around one standard, a dynamic that regulators and industry bodies assessing on-chain rights infrastructure will likely watch closely as royalty disputes involving AI-generated content continue to mount.

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