Decentralized social network Farcaster is set to return $180 million to its investors following its acquisition by infrastructure provider Neynar, even as the protocol continues to operate and grow. The move marks a rare moment in crypto where a venture-backed startup opts to give back its full lifetime funding while handing over stewardship to a long-time ecosystem partner.
Farcaster Remains Live After Acquisition
Speculation around Farcaster’s future surfaced soon after news broke that Neynar was acquiring the project. Farcaster co-founder Dan Romero addressed these concerns directly, making it clear that the protocol is not shutting down.
According to Romero, Farcaster continues to see solid engagement and remains an active decentralized social network. He pointed to around 250,000 monthly active users as of December, alongside more than 100,000 funded wallets interacting with the ecosystem. These figures, he said, demonstrate that Farcaster still holds relevance for developers and users experimenting with onchain social platforms.
Farcaster operates as a decentralized social protocol rather than a single app. It allows developers to build interoperable social applications where users own their identities, social graphs and connections onchain, instead of being locked into one centralized service.
Neynar Takes Over Protocol Stewardship
Under the new structure, Neynar will take responsibility for maintaining Farcaster’s protocol contracts, code repositories and consumer-facing app. Romero explained that Neynar plans to guide Farcaster in a more developer-focused direction, leaning into its role as core infrastructure for builders rather than positioning it as a single flagship social product.
Neynar is not a newcomer to the ecosystem. The venture-backed startup has been closely tied to Farcaster since its early days, operating one of the first Farcaster clients and providing infrastructure used by a large share of developers building on the protocol today.
As part of the transition, Romero and several members of the Farcaster team will step away from day-to-day operations and move on to new projects, marking the end of a five-year development chapter.
$180 Million to Be Returned to Investors
One of the most striking aspects of the announcement is the decision to return all capital raised by Merkle Manufactory, the company that led Farcaster’s development.
In July 2022, Merkle Manufactory raised $30 million from a16z crypto. This was followed by another funding round in March 2024 led by Paradigm, which reportedly pushed the company’s valuation beyond $1 billion. Over its lifetime, Merkle raised a total of $180 million.
Romero confirmed that the company plans to return the entire amount to investors. He described the move as the result of five years of development and an effort to act as responsible stewards of investor capital. The decision suggests that the team does not see a need to retain venture funding under the new ownership and governance structure.
Investor Balaji Srinivasan publicly confirmed that funds were being returned and praised the Farcaster team for its work on decentralized social infrastructure, calling it an important contribution to the broader ecosystem.
Merkle Manufactory did not respond to requests for additional comment before publication.
A Broader Shift in Decentralized Social Leadership
Farcaster is not the only decentralized social project undergoing a leadership transition. This week, the Aave team announced it has handed over stewardship of Lens Protocol to Mask Network.
The move allows Aave to refocus on decentralized finance while remaining involved with Lens in a technical advisory role. Like Farcaster, Lens is designed as an open social protocol rather than a closed platform, and its leadership shift reflects a growing trend of separating infrastructure stewardship from the original founding teams.
These transitions highlight how decentralized social projects are evolving beyond their early startup phases, with mature ecosystems increasingly managed by specialized infrastructure providers.
Vitalik Buterin Calls for Open Social Platforms
As these changes unfold, Ethereum co-founder Vitalik Buterin weighed in on the importance of decentralized social media. He urged builders and users to spend more time in open social ecosystems and move away from what he described as centralized information warzones.
Buterin argued that if society wants healthier public discourse, it needs better mass communication tools that are not controlled by a handful of platforms. His comments underscored the long-term vision behind protocols like Farcaster and Lens, even as their leadership structures change.
For Farcaster, the combination of continued operations, a new steward in Neynar and the unprecedented return of $180 million to investors signals a reset rather than an end. The protocol now enters its next phase with a tighter focus on developers, open infrastructure and the broader goal of decentralized social networking.
