Farcaster to repay $180 million to venture backers, says protocol is ‘not shutting down’

The company behind decentralized social protocol Farcaster plans to return the full $180 million it raised from venture capital investors, according to co-founder Dan Romero, as the project transitions into a new phase.

In a Thursday post on X, Romero said that Merkle Manufactory, the firm behind Farcaster, plans to repay investors in full following the sale of the protocol to Neynar, a decentralized social media infrastructure firm backed by Haun Ventures.

"As for Merkle, we're planning to return the full $180 million raised back to investors," said Romero. "Over the last 5 years, we tried to be a good steward of investor capital."

Romero's comments follow Neynar's announcement earlier this week that it is acquiring Farcaster, with plans to shift the protocol toward a more developer-focused direction. In his Thursday post, Romero addressed speculation about Farcaster's future, noting that the protocol will continue to operate.

"Farcaster is not shutting down," said Romero. "The protocol works and will continue to work." He added that Farcaster recorded about 250,000 monthly active users in December and has more than 100,000 funded wallets.

Several investors publicly confirmed the repayment plan, including former Coinbase executive Balaji Srinivasan, an early Farcaster backer. In a separate post on X, Srinivasan said that Farcaster investors would receive their capital back, backing Romero's statement that Merkle Manufactory plans to return the full $180 million raised.

"The tech is real, and it works," Srinivasan said, adding that protocols can take longer to mature than traditional startups. He also said the handover to Neynar could help Farcaster move closer to its long-term goal of deeper decentralization.

Merkle Manufactory was founded in 2020 by Romero and Varun Srinivasan and is backed by major venture firms including a16z Crypto and Paradigm. Farcaster was last valued at a reported $1 billion following a $150 million Series A round in 2024, one of the largest Web3 funding deals of that year.

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