Farcaster to Repay $180M to Traders Amid Pivot to 'Developer-Targeted Route' – Decrypt

Merkle Manufactory, the corporate behind decentralized social protocol Farcaster, plans to repay enterprise buyers the total $180 million it raised.

Merkle co-founder Dan Romero tweeted Thursday that the corporate would return buyers’ capital in full because the venture transitions underneath new possession after the protocol was offered to infrastructure agency Neynar, responding to issues that the corporate is shutting down.

“Farcaster isn’t shutting down,” Romero wrote. “The protocol works and can proceed to work.” He added that venture-backed startup Neynar plans to “shift Farcaster in a extra developer-focused path.”

Merkle, in the meantime, plans to “return the total $180 million raised” again to its buyers, he stated.

Romero first revealed the acquisition Wednesday, saying possession of Farcaster’s protocol contracts, code repositories, core app, and the Clanker venture shall be transferred to Neynar over the approaching weeks, with the infrastructure agency assuming accountability for working and sustaining the protocol going ahead.

Merkle Manufactory was based in 2020 by Romero and Varun Srinivasan and raised a complete of $180 million from buyers together with a16z Crypto and Paradigm.

Farcaster was final valued at a reported $1 billion following a $150 million Sequence A spherical in 2024, earlier than the protocol’s sale to Neynar and Merkle’s plan to return investor capital.

‘A wholesome correction’

The handover comes as decentralized social media has drawn renewed consideration from the crypto business, as main modifications occur throughout ecosystems.

Lens Protocol, the decentralized social platform developed by the crew behind Ethereum-based protocol Aave, confirmed Tuesday that Masks Community will take over stewardship of the venture.

The transitions place Farcaster and Lens underneath new operators drawn from their present infrastructure ecosystems, with Neynar taking possession and operational management of Farcaster, whereas Masks Community assumes a stewardship function over Lens with out buying the protocol.

Observers say these strikes level to a maturing part for decentralized social, with infrastructure-focused groups taking up better accountability for working and scaling protocols.

“On-chain social isn’t dying, it’s simply shedding the parable that decentralization alone is sufficient,” Lia Savillo, Head of Socials at artistic technique company Hype, instructed Decrypt. “The subsequent period shall be constructed by groups that prioritize infra, UX, and sustainability over ideology.”

The current strikes really feel “like a wholesome correction,” she stated.

In a current interview, Ethereum co-founder Vitalik Buterin pointed to Farcaster and Lens Protocol as examples of protocols testing whether or not social platforms can change operators with out breaking consumer networks, governance, or identification.

“We’d like mass communication instruments that serve the consumer’s long-term curiosity, not maximize short-term engagement,” Buterin wrote Wednesday.

The switch of Farcaster’s contracts, code, and core app to Neynar reveals a concrete occasion of that design, the place operational management may change, however the protocol itself would proceed to run.

“Early on-chain social was pushed by tradition and beliefs, however long-term viability requires operators who deal with it like infrastructure, not a motion,” Hype’s Savillo stated, including that these modifications throughout decentralized social point out the area is “rising up, shifting from founder-led experimentation to groups optimized for reliability, scale, and developer velocity.”