Decentralized social network developer Farcaster to return $180M to investors
Crypto journalist
We are there
Crypto journalist
Share
Merkle Manufactory, the company behind the crypto-based social media protocol Farcaster, plans to return $180 million in venture funding to investors.
Key Takeaways:
Merkle Manufacturing plans to return $180 million in venture funding as Farcaster continues operations.
Farcaster has been acquired by Neynar, who will take over development when the founding team steps back.
The protocol is moving from a social-first model to infrastructure and developer-oriented use cases.
The decision, announced late Thursday by Merkle founder Dan Romero in a post on X, follows speculation over the future of the project.
Several investors, including former Coinbase executive Balaji Srinivasa, have separately confirmed the plan to return the capital.
Romero: Farcaster won't close as Merkle plans to pay $180M.
“Farcaster is not closing,” Romero wrote, pushing back on rumors of the platform's status.
They said the protocol is still ongoing, citing nearly 250,000 monthly active users and more than 100,000 funded wallets in December.
Romero added that Merkle intends to pay back the full amount raised over the past five years, adding that the firm wants to be a responsible steward of investor capital.
The announcement was made shortly after Farcaster was acquired by Neynar, having built infrastructure in the Farcaster ecosystem for a long time.
Under the deal, Neynar will oversee Farcaster's smart contracts, code repositories, mobile application and Clunker's AI-driven token board.
Romero and co-founder Varun Srinivasan will step away from day-to-day development with parts of the Merkle Group.
“This decision was not easy,” Romero wrote earlier this week. But five years later, it's clear that Farcaster needs a new approach and leadership to achieve its full potential.
Farcaster was launched with the goal of decentralizing social media by putting users in control of their identity and data instead of relying on centralized platforms.
In the year In 2024, the project attracted a lot of attention when it raised $150 million from major crypto venture firms Paradigm and Andreessen Horowitz's crypto arm.
Despite the early enthusiasm, Romero admits that the platform will struggle to achieve sustainable growth as a social-first product.
In December, the team shifted its focus to in-app wallets and engaging business features, marking a strategic pivot away from direct competition with major social networks.
Neynar, which provides developer tools and APIs for applications built on Farcaster, said it plans to make the protocol more developer-centric.
The company is expected to come up with a new roadmap that focuses on infrastructure and developer adoption rather than consumer-related social features.
Offline web 3 messaging apps get high speed
The controversy surrounding Farcaster comes at a time of political unrest as governments clamp down on internet access and Web3-style social media and messaging tools are gaining ground.
BitChat, an offline messaging app created by Twitter founder Jack Dorsey, has emerged as a key communication channel in countries facing election-related shutdowns.
In Uganda, BitChat topped the country's app store rankings after authorities cut off internet and mobile services ahead of the disputed election.
Downloads in the country have nearly quadrupled in recent months, with similar increases reported in Iran as users seek ways to stay connected amid government shutdowns.
The app works without internet or cellular connections, instead relying on Bluetooth mesh technology to allow messages to flow between nearby devices.
Trending news, recommended popular crypto topics, price predictions
