Farcaster Co-Founder Hits Shutdown Rumors

Merkle plans to return the entire $180 million raised to investors, describing the move as responsible capital management.

Farcaster co-founder Dan Romero said on January 22 that the decentralized social protocol will not be discontinued, pushing back against online claims that followed its acquisition by Neynar earlier this week.

He also said Merkle, Farcaster’s parent company, plans to return the entire $180 million it raised to investors.

The comments came after days of heated debate over

What Farcaster’s founders and backers say

Romero said Farcaster registered around 250,000 monthly active users and more than 100,000 funded wallets in December last year, adding that the protocol “is working and will continue to work.”

He added that Neynar, a venture-backed startup that has built the core infrastructure for Farcaster since its inception, 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 in the coming weeks.

This transition follows a major strategic pivot in December 2025, when Farcaster announced it would abandon its social graph to embrace a wallet-driven growth model, making in-app wallet functionality its core product.

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As for investor returns, Romero said Merkle would return the entire $180 million he raised over five years, describing the move as part of an effort to be responsible with capital. He also directly addressed personal criticism, saying he bought his house with proceeds from Coinbase’s IPO, not Farcaster’s funds.

Several investors supported that bill. Antonio García Martínez, an early adopter and investor in both Farcaster and Neynar, called shutdown claims “complete nonsense” and defended Farcaster’s original goal: to build a permissionless social network where users control their data. Balaji Srinivasan also confirmed that money was returned to investors, adding that Romero was already financially independent before founding Farcaster.

Critics question leadership, governance and results

Other users were not convinced. Some wondered how a company that raised $150 million in a 2024 round led by Paradigm could sell to a company that raised much less. Builder LogicCrafterDz argued that Farcaster’s problems stemmed from leadership and limited community input, and said the Neynar takeover will only work if governance and incentives become more open.

More aggressive criticism came from accounts accusatory Romero of cashing in as growth stalled. Linda Xie, an early Coinbase colleague and Farcaster investor, dismissed these claims, saying they contained “many inaccuracies” and that she would work with Romero again. Other developers and users pointed out the difficulty of building social networks at scale, citing the problems of platforms like Threads and Mastodon.

For now, the debate reflects a divided crypto public. Some see the transfer and refunds to investors as a rare, orderly outcome, while others see it as a costly experiment that fell short of expectations.