Key Notes
- Farcaster will continue operating after its sale to Neynar, despite shutdown rumors.
- Merkle Manufactory plans to return the full $180 million raised from VC investors.
- The protocol still reports 250,000 monthly active users and over 100,000 funded wallets.
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.
Given some rumors, wanted to post a few clarifications:
Farcaster is not shutting down. The protocol works and will continue to work. There were 250,000 MAU in December and over 100,000 funded wallets. The acquirer, Neynar, is a venture-backed startup and plans to shift…
— Dan Romero (@dwr) January 22, 2026
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.
As a Farcaster investor, can confirm: money is coming back to investors.
Dan and the team built something genuinely amazing, perhaps the best decentralized social protocol. He’s independently wealthy from Coinbase, and could have done whatever he wanted, but he decided to spend… https://t.co/ondjUSutKL
— Balaji (@balajis) January 22, 2026
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.
Given some rumors, wanted to post a few clarifications:
Farcaster is not shutting down. The protocol works and will continue to work. There were 250,000 MAU in December and over 100,000 funded wallets. The acquirer, Neynar, is a venture-backed startup and plans to shift…
— Dan Romero (@dwr) January 22, 2026
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
$2 926
24h volatility:
1.4%
Market cap:
$353.16 B
Vol. 24h:
$21.53 B
before shifting parts of its stack to Optimism
OP
$0.31
24h volatility:
0.7%
Market cap:
$598.48 M
Vol. 24h:
$63.26 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.
The sale of Farcaster explained
Farcaster started as an idea:
– Dan Romero leaves Coinbase
– wants a social network without platform risk
– users own their identity
– apps can come and go
– teams up with Varun Srinivasan
– builds on Ethereum, later Optimism2022
– raises $30M… pic.twitter.com/za19XfuXb9
— StarPlatinum (@StarPlatinum_) January 21, 2026
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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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
Parth Dubey on LinkedIn
Source: https://www.coinspeaker.com/farcaster-wont-shut-down-plans-180m-vc-repayment/