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 funding 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 create other applications on top; the most popular application is the social network Warpcast, similar to Twitter. What does it mean to build a social experience on Ethereum? Farcaster takes a hybrid approach, storing user identities on-chain, while data like public posts, follows, reactions and more is stored off-chain. Users have to “pay rent” to Farcaster to store their data – right now that’s about $7 worth of ETH for 5,000 posts. If a user doesn’t want to pay, their old broadcasts (that’s what they call posts) will be deleted as they create new broadcasts.
“Actions are performed on-chain only when security and consistency are critical. The use of on-chain actions is kept to a minimum to reduce costs and improve performance,” Farcaster’s website states. Storing user identities on-chain provides another way to verify that people are who they say they are, since their profile will be connected to other activities they perform with that wallet. Of course, it’s possible for the same person to create multiple wallets, so it’s not foolproof – but if someone’s wallet is relatively empty, then any sketchy behavior will attract more skepticism.
On the social side, one of the key features of Farcaster is its individual channels for specific topics. So if you want to live blog the NBA Finals, you can do so on a specific channel with other basketball fans, rather than clogging up your other subscribers’ feeds (X also supports a Communities feature, which it recently offered to users more intensively).
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.
As with many crypto products, there are some difficulties in signing up, as you must have a digital wallet. But Farcaster isn’t necessarily aimed at the average consumer: For its audience, made up mostly of crypto fanatics, paying a nominal fee on Ethereum to use a service is as second nature as paying sales tax on a coffee shop.
This complicated architecture and reliance on cryptography could be off-putting for many users. According to Warpcast’s 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 around 5.6 million and 8.6 million registrations, respectively.
A $150 million fundraising represents a huge raise for any startup, let alone the crypto and social media spaces. According to The Block, venture funding for crypto companies decreased by 68% year-over-year in 2023. But notably, Farcaster’s funding comes from specialized crypto companies, which means they might be less hesitant about the volatile nature of crypto. world.
techcrunch
