Tech
Farcaster, a cryptocurrency-based social network, raised $150 million with just 80,000 daily users
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 has also raised funds from a16z crypto, Haun Ventures, USV, Variant, Standard Crypto and others, according to a blog post by founder Dan Romero.
Farcaster, the social protocol, invites developers to build other apps on top of it; the most popular app is the social network Warpcast, similar to Twitter. What does it mean to build a social experience on Ethereum? Farcaster is taking a hybrid approach, storing user identities onchain, while data such as public posts, followers, reactions, and more are stored offchain. Users must “to pay the rent” to Farcaster to store their data – right now, that’s about $7 ETH for 5,000 posts. If a user doesn’t want to pay, their older casts (that’s what they call posts) will be deleted while they create new casts.
“Actions are only performed onchain when security and consistency are critical. The use of onchain shares is kept to a minimum to reduce costs and improve performance,” Farcaster’s website He says. Storing users’ 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 carry out 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, any shady behavior will be met with more skepticism.
On the social front, a key feature of Farcaster is its individual channels for specific topics. So if you want to liveblog the NBA Finals, you can do it in a specific channel with other basketball fans, instead of clogging up other followers’ feeds (X also supports a Community feature, which has been pushing more heavily for recent users).
The Frames feature allows developers to share apps they’ve created on Farcaster as individual posts on Warpcast: One user, Jordan Messina, created a Frame where users can play Pokémon collaboratively.
Like many crypto products, there is some friction when signing up, as you need to have a digital wallet. But Farcaster isn’t necessarily aimed at the average consumer: For its audience, mostly made up of cryptocurrency fanatics, paying a nominal fee in Ethereum to use a service is as second nature as paying sales tax on a coffee.
This complicated architecture and reliance on cryptocurrencies may be off-putting for many users. According to Warpcast own data, the platform is currently at its peak of approximately 80,000 daily active users (DAU) and 350,000 signups. This is no small feat, but for comparison, they have the decentralized platforms Bluesky and Mastodon 5.6 million AND 8.6 million registrations respectively.
A $150 million fundraising is a huge raise for any startup, let alone the cryptocurrency and social media industry. Second The blockVenture capital funding for crypto companies fell 68% year-over-year in 2023. But, notably, Farcaster’s funding comes from companies specializing in the cryptocurrency sector, meaning they may be less squeamish about the volatile nature of the world of cryptocurrencies.