Merkle plans to return the full $180M raised to investors, framing the move as responsible capital management.
Farcaster co-founder Dan Romero said on January 22 that the decentralized social protocol is not shutting down, pushing back against online claims that followed its acquisition by Neynar earlier this week.
He also said Merkle, Farcaster’s parent entity, plans to return the full $180 million it raised to investors.
The comments came after days of heated debate on X, where critics framed the Neynar deal as a quiet wind-down, while supporters argued it was an orderly transition that keeps the protocol alive and returns capital.
What Farcaster’s Founders and Backers Are Saying
Romero said Farcaster recorded about 250,000 monthly active users in December last year and more than 100,000 funded wallets, adding that the protocol “works and will continue to work.”
He added that Neynar, a venture-backed startup that has built core infrastructure for Farcaster since its early days, plans to shift the network in a more developer-focused direction.
Romero announced the acquisition on January 21, noting that ownership of the protocol contracts, code repositories, the Farcaster app, and Clanker would move to Neynar over the coming weeks.
This transition follows a significant strategic pivot in December 2025, when Farcaster announced it was ditching its social graph to embrace a wallet-driven growth model, making in-app wallet functionality the core product.
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On investor returns, Romero said Merkle would give back the full $180 million raised over five years, describing the move as part of an effort to be responsible with capital. He also addressed personal criticism directly, saying he bought his house using proceeds from Coinbase’s IPO, not Farcaster funds.
Several investors backed that account. Antonio García Martínez, an early user and investor in both Farcaster and Neynar, called shutdown claims “complete bullshit” and defended Farcaster’s original goal of building a permissionless social network where users control their data. Balaji Srinivasan also confirmed that money was being returned to investors, adding that Romero was already financially independent before founding Farcaster.
Critics Question Leadership, Governance, and Outcomes
Other users were unconvinced. Some questioned how a company that raised $150 million in a 2024 round led by Paradigm could sell to a firm that raised far less. Builder LogicCrafterDz argued that Farcaster’s problems came from leadership and limited community input, saying Neynar’s takeover only works if governance and incentives become more open.
More aggressive criticism came from accounts accusing Romero of cashing out while growth stalled. Linda Xie, an early Coinbase colleague and Farcaster investor, rejected those claims, saying they contained “many inaccuracies” and that she would work with Romero again. Other developers and users pointed to the difficulty of building social networks at scale, citing the struggles of platforms like Threads and Mastodon.
For now, the debate reflects a split crypto audience. Some see the handover and investor refunds as a rare, orderly outcome, while others view it as a costly experiment that fell short of expectations.
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