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 on Tuesday that it closed a $150 million fundraising. Led by Paradigm, the platform also raised money 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 applications on top of it; The most popular application is the social network Warpcast, similar to Twitter. What does it mean to create a social experience on Ethereum? Farcaster is taking a hybrid approach, storing user identities on-chain, while data like public posts, follows, reactions, and more are stored off-chain. Users have to “pay rent” to Farcaster to store their data; As of now, that equates to about $7 worth of ETH per 5,000 posts. If a user does not want to pay, his oldest casts (that’s what they call posts) will be deleted as he creates new casts.

“Actions are performed in 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,” says the Farcaster website. Storing user identities on-chain offers another way to verify that people are who they say they are, since their profile will be connected to the other activities they do 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 blank, any questionable 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 live blog the NBA Finals, you can do it on a specific channel with other basketball fans, rather than cluttering your other followers’ feeds (X also supports a Communities feature, which it’s recently been pushing with more strength among users). ).

The Frames feature allows developers to share apps they’ve built 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 to signing up as you need to have a digital wallet. But Farcaster doesn’t necessarily cater to the average consumer: for its audience, which is mostly made up of cryptocurrency fans, paying a nominal fee in Ethereum to use a service is as natural as paying sales tax on a coffee.

This complicated architecture and reliance on cryptocurrencies could be off-putting to many users. According to Warpcast’s own data, the platform is currently at its peak of around 80,000 daily active users (DAU) and 350,000 registrations. That’s no small feat, but for comparison, decentralized platforms Bluesky and Mastodon have around 5.6 million and 8.6 million records respectively.

A $150 million fundraising is a huge raise for any startup, let alone in the cryptocurrency and social media spaces. According to The Block, venture funding for cryptocurrency companies was down 68% year-over-year in 2023. But notably, Farcaster’s funding comes from companies that specialize in the cryptocurrency space, meaning they can be less apprehensive regarding the volatile nature of cryptocurrencies. world.

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