Farcaster Won’t Shut Down, Plans $180M VC Repayment

Decentralized social networking platform Farcaster is not shutting down.

Co-founder Dan Romero said the protocol will continue operating following its sale to Neynar, pushing back against speculation that the project was being wound down.

The clarification came after Neynar announced it is acquiring Farcaster’s protocol, app, smart contracts, developer tools, and AI token launchpad Clanker.

Neynar plans to shift Farcaster toward a more developer-focused roadmap, while the original team at Merkle Manufactory steps back from day-to-day development.

Merkle to Return $180M to Investors

Romero said Merkle Manufactory plans to return the full $180 million raised from venture capital investors.

The firm raised capital over five years from major backers including a16z Crypto and Paradigm.

Several investors confirmed the plan publicly. Balaji Srinivasan said Farcaster backers would receive their capital in full, calling the technology real and functional.

He added that decentralized protocols often take longer to mature than traditional startups.

Usage Data Shows Protocol Still Active

Romero said Farcaster recorded roughly 250,000 monthly active users in December and has more than 100,000 funded wallets.

He stressed that the protocol itself works and will continue to function under new ownership.

Farcaster was built as a decentralized identity and social graph layer, originally positioned as a censorship-resistant alternative to centralized social platforms.

The protocol launched on Ethereum ETH $2 928 24h volatility: 1.3% Market cap: $353.19 B Vol. 24h: $22.05 B before shifting parts of its stack to Optimism OP $0.31 24h volatility: 0.8% Market cap: $598.74 M Vol. 24h: $63.99 M .

While engagement has declined from peak levels, the network remains live, with Neynar already serving as the primary backend infrastructure for many Farcaster-based applications.

The protocol has also drawn attention from prominent figures in the crypto space, including Ethereum co-founder Vitalik Buterin, who has been actively using decentralized social tools this year through Firefly, a multi-client app that supports Farcaster alongside Lens and Bluesky.

Growth Stalled After Heavy Fundraising

Farcaster raised $30 million in a 2022 seed round and $150 million in a 2024 Series A, valuing the project near $1 billion.

Expectations surged after the launch of features like Frames, which enabled on-chain actions directly inside posts.

However, momentum faded in 2025 as spam increased, moderation decisions caused backlash, and user growth stalled.

Revenue failed to scale with costs. Estimates show Farcaster generated roughly $2.8 million in revenue over five years despite raising $180 million.

Even the acquisition of Clanker, which generated over $50 million in fees, failed to reverse the trend.

For now, Farcaster’s future now depends on whether a builder-led model can succeed where a social network approach stalled.

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