Farcaster co-founder pushes back on closure rumors

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

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

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

The comments come after days of heated debate on X, where critics presented the Neynar deal as a quiet conclusion, while supporters argued it was an orderly transition that keeps the protocol alive and returns capital.

What Farcaster Founders and Backers Say

Romero said Farcaster recorded around 250,000 monthly active users as of December last year and over 100,000 funded wallets, 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 take the network in a more developer-focused direction.

Romero announced the acquisition on January 21, noting that ownership of the protocol contracts, code repositories, Farcaster app and Clanker would be transferred to Neynar over the coming weeks.

This transition follows a significant strategic shift in December 2025, when Farcaster announced it was abandoning its social graph to adopt a portfolio-driven growth model, making in-app wallet functionality the core product.

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

Several investors have backed this account. Antonio García Martínez, an early user and investor in Farcaster and Neynar, called the shutdown allegations “total bullshit” and defended Farcaster’s original goal of creating a permissionless social network where users control their data. Balaji Srinivasan also confirmed that the money was returned to investors, adding that Romero was already financially independent before founding Farcaster.

Critics question leadership, governance and results

Other users weren’t convinced. Some wonder 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, saying the Neynar buyout would only work if governance and incentives became more open.

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

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