Farcaster, a decentralized social networking protocol, is preparing to return the full $180 million it raised from venture capital investors, even as it moves into a new chapter under new ownership. The move comes amid questions about the project’s future following its sale, which co-founder Dan Romero says should not be mistaken for a shutdown.
In a post shared Thursday on X, Romero said Merkle Manufactory, the company that built Farcaster, intends to repay investors in full after transferring 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,” Romero wrote. “Over the last five years, we tried to be a good steward of investor capital.”
Given some rumors, wanted to post a few clarifications:
— Dan Romero (@dwr) January 22, 2026
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…
Addressing concerns about Farcaster’s future
Romero’s comments followed Neynar’s announcement earlier this week that it would acquire Farcaster and steer the protocol toward a more developer-focused strategy. The news sparked speculation online about whether Farcaster would continue operating.
Romero sought to clear up those concerns directly. “Farcaster is not shutting down,” he said. “The protocol works and will continue to work.”
According to Romero, Farcaster recorded roughly 250,000 monthly active users in December and has more than 100,000 funded wallets, underscoring that the network remains active despite the organizational changes behind the scenes.
Investor support and long-term vision
Several investors publicly confirmed the repayment plan. Among them was Balaji Srinivasan, a former Coinbase executive and early backer of Farcaster, who echoed Romero’s statement in a separate post on X.
“The tech is real, and it works,” Srinivasan wrote, noting that decentralized protocols often take longer to mature than traditional startups.
As a Farcaster investor, can confirm: money is coming back to investors.
— Balaji (@balajis) January 22, 2026
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
He added that handing the protocol 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 has been backed by prominent venture firms including a16z Crypto and Paradigm. Farcaster drew significant attention in 2024 after completing a $150 million Series A round that reportedly valued the project at $1 billion, making it one of the largest Web3 funding deals of the year.
A rare outcome in venture-backed tech
Returning the full amount of venture funding is an uncommon outcome in the startup world, particularly in the volatile Web3 sector. The decision suggests a clean break for Merkle Manufactory while allowing Farcaster to continue evolving under Neynar’s stewardship.
As Farcaster enters this next phase, the focus appears to be on stability rather than spectacle: maintaining a working protocol, supporting developers, and giving investors their capital back. For users and builders on the network, the message from its founders is clear—the technology remains, even as the structure around it changes.
