The software firm behind a crypto-oriented social-media platform plans to repay venture capitalists the $180 million they had invested in the project, underscoring a period of consolidation for one of the more ambitious corners of the blockchain market.
Merkle Manufactory, whose flagship product is Farcaster, will return the money it had raised to investors, co-founder Dan Romero said in a post on X late Thursday in the US. Multiple investors including former Coinbase Global Inc. executive Balaji Srinivasan confirmed the plan in separate posts.
Neynar, another crypto project focused on social media, said on Jan. 21 that it had acquired the Farcaster protocol from Merkle. That came less than two years after Merkle raised $150 million in a round led by Paradigm that valued the Los Angeles-based startup at about $1 billion.
The Neynar deal raised eyebrows among some social media users, prompting Romero, a former vice president at Coinbase, to assure followers that Farcaster isn’t shutting down and that venture capital backers would be repaid, in the post on Thursday.
Still, the episode highlights the difficulty of scaling so-called “decentralized” social-media platforms, which in theory are governed by a distributed network of contributors, while giving users more ownership over their content. Another crypto social-media protocol, Lens, founded by Aave Chief Executive Officer Stani Kulechov, announced a new steward in the form of Mask Network on Jan. 20.
“Scaling DeFi social is brutal,” said Akshat Vaidya, co-founder and managing partner of Arthur Hayes’ family office Maelstrom. “Tokens and onchain ownership are nice features, but they don’t solve the chicken-egg problem: nobody posts daily where their audience isn’t already living.”
Romero, Merkle, Paradigm and Neynar didn’t immediately respond to requests for comment.
Broader consolidation is already under way in the digital-asset industry. Crypto mergers and acquisitions topped $10 billion for the first time in the third quarter of 2025, a more than thirty-fold increase from a year earlier, according to Architect Partners data.
Coinbase agreed in May to acquire derivatives platform Deribit for $2.9 billion, while Ripple spent more than $2 billion buying prime broker Hidden Road and corporate-treasury firm GTreasury. Separately, South Korea’s Naver Corp. agreed to acquire Dunamu Inc., operator of the country’s largest crypto exchange, Upbit, for about $10 billion.
Founded in 2020, Merkle had two main products: the Farcaster protocol, which includes a blockchain component, and Warpcast, an application built on top of Farcaster that closely resembles X, the social-media platform formerly known as Twitter. Romero co-founded the firm with Varun Srinivasan, a former senior director at Coinbase.
Merkle had also raised capital in July 2022 in a $30 million round led by a16z Crypto.
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