Farcaster to Repay $180M to Investors Amid Pivot to ‘Developer-Focused Direction’

Merkle Manufactory, the company behind decentralized social protocol Farcaster, plans to repay venture investors the full $180 million it raised.

Merkle co-founder Dan Romero tweeted Thursday that the company would return investors’ capital in full as the project transitions under new ownership after the protocol was sold to infrastructure firm Neynar, responding to concerns that the company is shutting down.

“Farcaster is not shutting down,” Romero wrote. “The protocol works and will continue to work.” He added that venture-backed startup Neynar plans to “shift Farcaster in a more developer-focused direction.”

Merkle, meanwhile, plans to “return the full $180 million raised” back to its investors, he said.

Romero first revealed the acquisition Wednesday, saying ownership of Farcaster’s protocol contracts, code repositories, core app, and the Clanker project will be transferred to Neynar over the coming weeks, with the infrastructure firm assuming responsibility for running and maintaining the protocol going forward.

Merkle Manufactory was founded in 2020 by Romero and Varun Srinivasan and raised a total of $180 million from investors including a16z Crypto and Paradigm.

Farcaster was last valued at a reported $1 billion following a $150 million Series A round in 2024, before the protocol’s sale to Neynar and Merkle’s plan to return investor capital.

‘A healthy correction’

The handover comes as decentralized social media has drawn renewed attention from the crypto industry, as major changes happen across ecosystems.

Lens Protocol, the decentralized social platform developed by the team behind Ethereum-based protocol Aave, confirmed Tuesday that Mask Network will take over stewardship of the project.

The transitions place Farcaster and Lens under new operators drawn from their existing infrastructure ecosystems, with Neynar taking ownership and operational control of Farcaster, while Mask Network assumes a stewardship role over Lens without acquiring the protocol.

Observers say those moves point to a maturing phase for decentralized social, with infrastructure-focused teams taking on greater responsibility for operating and scaling protocols.

“On-chain social isn’t dying, it’s just shedding the myth that decentralization alone is enough,” Lia Savillo, Head of Socials at creative strategy agency Hype, told Decrypt. “The next era will be built by teams that prioritize infra, UX, and sustainability over ideology.”

The recent moves feel “like a healthy correction,” she said.

In a recent interview, Ethereum co-founder Vitalik Buterin pointed to Farcaster and Lens Protocol as examples of protocols testing whether social platforms can change operators without breaking user networks, governance, or identity.

“We need mass communication tools that serve the user’s long-term interest, not maximize short-term engagement,” Buterin wrote Wednesday.

The transfer of Farcaster’s contracts, code, and core app to Neynar shows a concrete instance of that design, where operational control could change, but the protocol itself would continue to run.

“Early on-chain social was driven by culture and ideals, but long-term viability requires operators who treat it like infrastructure, not a movement,” Hype’s Savillo said, adding that these changes across decentralized social indicate the space is “growing up, shifting from founder-led experimentation to teams optimized for reliability, scale, and developer velocity.”