Merkle Manufactory, the company behind the crypto-oriented social media protocol Farcaster, plans to return $180 million in venture funding to investors.
The decision was disclosed late Thursday by Merkle co-founder Dan Romero in a post on X, following speculation around the future of the project.
Several investors, including former Coinbase executive Balaji Srinivasan, separately confirmed the plan to return the capital.
Romero: Farcaster Not Shutting Down as Merkle Plans to Repay $180M
“Farcaster is not shutting down,” Romero wrote, pushing back on rumors surrounding the platform’s status.
He said the protocol remains operational, citing roughly 250,000 monthly active users in December and more than 100,000 funded wallets.
Romero added that Merkle intends to repay the full amount raised over the past five years, saying the firm sought to be a responsible steward of investor capital.
The announcement comes shortly after Farcaster was acquired by Neynar, a venture-backed startup that has long built infrastructure within the Farcaster ecosystem.
Under the deal, Neynar will assume control of Farcaster’s smart contracts, code repositories, mobile application, and Clanker, an AI-driven token launchpad.
Romero and fellow co-founder Varun Srinivasan, along with parts of the Merkle team, will step away from day-to-day development.
“This wasn’t an easy decision,” Romero wrote earlier this week. “But after five years, it’s clear Farcaster needs a new approach and leadership to reach its full potential.”
Farcaster was launched with the ambition of decentralizing social media by allowing users to control their identities and data rather than relying on centralized platforms.
The project drew significant attention in 2024 when it raised $150 million from major crypto venture firms, including Paradigm and Andreessen Horowitz’s crypto arm.
Despite early enthusiasm, Romero acknowledged that the platform struggled to achieve sustainable growth as a social-first product.
In December, the team shifted its focus toward in-app wallets and trading features in an effort to drive engagement, signaling a strategic pivot away from competing directly with mainstream social networks.
Neynar, which provides developer tools and APIs for applications built on Farcaster, said it plans to steer the protocol in a more builder-centric direction.
The company is expected to roll out a new roadmap focused on infrastructure and developer adoption rather than consumer-facing social features.
Offline Web3 Messaging Apps Gain Momentum
The controversy around Farcaster comes as Web3-style social media and messaging tools are gaining traction as governments increasingly restrict internet access during periods of political unrest.
Bitchat, an offline messaging app created by Twitter co-founder Jack Dorsey, has emerged as a key communication channel in countries facing election-related shutdowns.
In Uganda, Bitchat surged to the top of local app store rankings after authorities cut internet and mobile services ahead of a disputed election.
Downloads in the country have nearly quadrupled in recent months, with similar spikes reported in Iran as users seek ways to communicate during state-imposed blackouts.
The app operates without internet or cellular connections, relying instead on Bluetooth mesh technology that allows messages to hop between nearby devices.
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