Farcaster, a blockchain-based social protocol founded by two Coinbase alumni, announced Tuesday that it has closed a $150 million fundraising round. Led by Paradigm, the platform also raised money from a16z Crypto, Haun Ventures, USV, Variant, Standard Crypto and others, according to a suspension by founder Dan Romero.
Farcaster, the social protocol, invites developers to build other applications on top of it. the most popular application is the social network Warpcast, which is similar to Twitter. What does it mean to create a social experience on Ethereum? Farcaster gets a hybrid approach, storing user identities on-chain, while data such as public posts, followers, reactions, and more is stored off-chain. Users must “I pay rent” to Farcaster to store their data — as of now, that’s about $7 ETH for 5,000 posts. If a user doesn’t want to pay, then their older broadcasts (that’s what they call posts) will be deleted as they make new broadcasts.
“Actions are performed on-chain only when security and consistency are critical. The use of onchain actions is kept to a minimum to reduce costs and improve performance,” Farcaster’s Website says. Storing user identities on-chain offers another way to verify that people are who they say they are, as their profile will be linked to the other activities they do with that wallet. Of course, it’s possible for the same person to create multiple wallets, so this isn’t foolproof — but if someone’s wallet is relatively empty, then any sketchy behavior will be viewed with more skepticism.
On the social front, a key feature of Farcaster is its individual channels on specific topics. So if you want to live blog the NBA Finals, you can do so on a dedicated channel with other basketball fans, rather than clogging up the feeds of your other followers (X also supports a Communities feature, which it pushes harder recently to users ).
The Frames feature allows developers to share apps they’ve built on Farcaster as individual posts on Warpcast — one user, Jordan Messina, created a Frame where users can play Pokémon together.
Like many crypto products, there is some friction to sign up as you must have a digital wallet. But Farcaster doesn’t necessarily cater to the average consumer—for its audience, which consists mostly of die-hard crypto fanatics, paying a nominal fee in Ethereum to use a service is as second nature as paying sales tax on a coffee .
This complex architecture and reliance on encryption could be off-putting for many users. According to Warpcast their own data, the platform is currently at its peak with around 80,000 daily active users (DAU) and 350,000 registrations. This is no small feat, but for comparison, decentralized platforms Bluesky and Mastodon have approx 5.6 million and 8.6 million records respectively.
A $150 million fundraiser is a huge raise for any startup, let alone in the crypto and social media spaces. According The Blockventure funding for crypto companies is down 68% year-over-year in 2023. But mostly, Farcaster’s funding comes from companies that specialize in the crypto space, meaning they can be less stingy about its volatile nature crypto world.
