Merkle Returns $180M as Farcaster Is Sold to Infrastructure Operator Neynar

Farcaster’s creator to return $180M to investors as protocol moves to infrastructure operator Merkle Manufactory — the team behind decentralized social protocol Farcaster — will return the full $180 million it raised to venture investors as ownership of the protocol moves to infrastructure firm Neynar, Merkle co-founder Dan Romero said Thursday. Romero tweeted that the move follows Merkle’s sale of Farcaster’s protocol contracts, code repositories, core app and the Clanker project to Neynar, which will assume responsibility for running and maintaining the protocol over the coming weeks. “Farcaster is not shutting down,” Romero wrote. “The protocol works and will continue to work.” He added that Neynar, a venture-backed startup, plans to “shift Farcaster in a more developer-focused direction.” Key facts - Merkle Manufactory was founded in 2020 by Dan Romero and Varun Srinivasan. - The company raised $180 million from investors including a16z Crypto and Paradigm. - Farcaster was last valued at roughly $1 billion after a reported $150 million Series A in 2024. - Romero said Farcaster had about 250,000 monthly active users in December and more than 100,000 funded wallets. - Neynar will take operational control of the protocol; ownership of contracts, code, the core app and Clanker will be transferred in the coming weeks. - Merkle will return the full $180 million in capital to its investors. Why it matters The handover and capital return mark a notable pivot for a high-profile on-chain social project. Rather than winding down the protocol, Merkle is relinquishing operational control and giving investors their money back — a relatively uncommon outcome for a venture-backed crypto startup — while Neynar takes responsibility for building and scaling the stack. The change also fits a broader trend: decentralized social networks are increasingly being handed to teams focused on infrastructure and operational reliability. This week Lens Protocol announced a stewardship transition to Mask Network, too — another example of projects moving under new operators rather than remaining founder-run experiments. Industry reactions Observers say these transitions signal maturation in on-chain social. “On-chain social isn’t dying, it’s just shedding the myth that decentralization alone is enough,” Lia Savillo, Head of Socials at strategy agency Hype, told Decrypt. She called the shifts “a healthy correction” toward teams that prioritize infrastructure, UX and sustainability. Ethereum co-founder Vitalik Buterin has also pointed to Farcaster and Lens as tests of whether social protocols can change operators without breaking user networks, governance or identity, arguing that long-term communication tools should serve users’ interests rather than short-term engagement metrics. What’s next Neynar will now take over operating and maintaining Farcaster while positioning the protocol to be more developer-focused. Merkle’s return of $180 million to investors closes one chapter for the startup and hands the protocol to an infrastructure-focused operator — part of what many in the industry see as the next phase for decentralized social platforms. Read more AI-generated news on: undefined/news