Farcaster’s co-founder pushed back on closing rumors

Merkel plans to return the full $180m raised to investors, calling the move responsible capital management.

Farcaster founder Dan Romero said on January 22 that the decentralized social protocol would not be shutting down, contradicting online claims that followed its acquisition by Neynar earlier this week.

Farcaster's parent company Merkle also said it plans to return the full $180 million it raised to investors.

The comments came after days of heated debate over X, with critics framing Neynar's agreement as a quiet wind-down, while supporters argued it was a systematic transition that would keep the protocol alive and return capital.

What Farcaster founders and supporters are saying.

Romero Farcaster said that in December of last year, he recorded about 250,000 monthly active users and more than 100,000 funded wallets, adding that the protocol “works and will continue”.

Neynar, the venture-backed startup that has built the core infrastructure for Farcaster since its early days, plans to shift the network in a developer-oriented direction.

Romero announced the acquisition on January 21, noting that ownership of protocol contracts, code repositories, the Farcaster app and Clunker will be transferred to Neynar in the coming weeks.

This transition follows a significant strategic pivot in December 2025, when Farcaster announced it was releasing its social graph to embrace a wallet-driven growth model, making in-app wallet functionality its core product.

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On investor returns, Romero said Merkel would return the full $180 million raised over five years, a move he described as part of an effort to be more responsible with capital. He also addressed personal criticism directly, saying he bought the house with money from Coinbase's IPO, not Farcaster's funds.

Several investors backed this account. Antonio Garcia-Martinez, an early user and investor in Farcaster and Neynar, called the shutdown claims “complete bullshit” and argued that Farcaster's original goal was to build a permissionless social network where users could control their data. Balaji Srinivasan confirmed that money was being returned to investors, saying Romero was already financially independent before founding Farcaster.

Critics question leadership, management and results.

Other users were not convinced. Some have questioned how a company that raised $150 million in a round led by Paradigm in 2024 could sell to a firm that raised far less. Builder LogicCrafterDz argued that Farcaster's problems stemmed from limited leadership and community input, and Neynar's control would only work if management and incentives were more open.

Even harsher criticism came from accounts that accused Romero of cashing out when growth stalled. Linda Xie, a former Coinbase employee and Farcaster investor, denied those claims, saying they contained “many errors” and would work with Romero again. Other developers and users have pointed to the difficulty of building social networks at scale, citing the struggles of platforms like Threads and Mastodon.

For now, the debate reflects a fragmented crypto audience. Some see the delivery and the investor's return as a rare, orderly result, while others see it as an expensive experiment that fell short of expectations.