Farcaster, a Crypto-Based Social Network, Raises $150M with 80K Daily Users

Farcaster, a blockchain-based social protocol created by two former Coinbase employees, has successfully raised $150 million. Announced on Tuesday, this funding round was led by Paradigm, with additional investments from a16z crypto, Haun Ventures, USV, Variant, Standard Crypto, among others, according to a blog post by founder Dan Romero.

Farcaster’s platform encourages developers to build applications on its protocol, with the most popular being Warpcast, a social network similar to Twitter. The unique aspect of Farcaster’s social experience on Ethereum lies in its hybrid approach: user identities are stored on-chain, while data such as public posts, follows, and reactions are stored off-chain. Users must pay a nominal fee to store their data; currently, it costs around $7 worth of ETH for 5,000 posts. If users choose not to pay, their older posts (referred to as “casts”) are deleted as they create new ones.

According to Farcaster’s website, on-chain actions are minimized to reduce costs and improve performance, only being used when security and consistency are crucial. Storing user identities on-chain provides an additional layer of verification, as profiles are linked to other wallet activities. While this isn’t foolproof—since multiple wallets can be created by the same person—sparse wallet activity can trigger skepticism towards potentially dubious behavior.

A notable feature of Farcaster is its topic-specific channels. For instance, users can live-blog the NBA finals in a dedicated channel for basketball fans, avoiding clutter in their general feed. The Frames feature enables developers to share their Farcaster-based apps through individual posts on Warpcast. One example is a collaborative Pokémon game created by user Jordan Messina.

As with many crypto-based platforms, signing up requires a digital wallet, creating some initial friction. However, Farcaster’s target audience, primarily crypto enthusiasts, finds this process as routine as paying sales tax on a purchase. Despite its complex architecture and crypto reliance, Farcaster boasts around 80,000 daily active users (DAUs) and 350,000 signups.

This $150 million fundraise is significant, especially in the current climate where venture funding for crypto companies dropped 68% year-over-year in 2023, as reported by The Block. The funding, coming from firms specialized in the crypto sector, suggests confidence in Farcaster’s potential despite the volatile nature of the crypto market.