Farcaster, a blockchain-based social protocol founded by two Coinbase alumni, announced Tuesday that it has closed $150 million in funding. The Paradigm-led platform also raised funding from a16z crypto, Haun Ventures, USV, Variant, Standard Crypto, and others, according to a blog post by founder Dan Romero.
Farcaster, a social protocol, inspires developers to build other apps on top of it. The most popular app is Warpcast, a social network similar to Twitter. What does it mean to build social experiences on Ethereum? Farcaster takes a hybrid approach, storing user identities on-chain and data such as public posts, follows, and reactions off-chain. Users must “pay a rental fee” to her Farcaster to store their data. This currently equates to approximately $7 worth of ETH for 5,000 posts. If the user does not wish to pay, the old cast (called a post) will be deleted when creating a new cast.
“Actions are performed on-chain only when security and consistency are important. The use of on-chain actions is kept to a minimum to reduce costs and improve performance,” says Farcaster. It is stated on the website. Storing user IDs on-chain connects a user's profile to other activities they do with that wallet, providing another way to verify their identity. Of course, this is not guaranteed as the same person may create multiple wallets. However, if someone's wallet is relatively empty, any unusual behavior will be viewed with more suspicion.
On the social side, one of Farcaster's key features is separate 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 community features). , we've been pushing this heavily to our users lately)).
The frames feature allows developers to share apps built on Farcaster as separate posts on Warpcast. One of the user's girlfriends, Jordan Messina, created a frame where users can play Pokemon collaboratively.
Like many crypto products, signing up requires some effort, as you need a digital wallet. But Farcaster isn't necessarily aimed at the average consumer. For an audience made up mostly of crypto enthusiasts, paying a nominal fee in Ethereum to use the service is as natural as paying sales tax on coffee.
This complex architecture and reliance on cryptography can turn off many users. According to Warpcast's own data, the platform is currently at a peak of around 80,000 daily active users (DAU) and 350,000 sign-ups. This is no small feat, but for comparison, decentralized platforms Bluesky and Mastodon have around 5.6 million and 8.6 million signups, respectively.
The $150 million funding is a huge amount for any startup, let alone those in the crypto and social media space. According to The Block, venture funding for crypto companies decreased by 68% in 2023 compared to the previous year. However, it is worth noting that Farcaster's funding comes from companies that specialize in the crypto space, which may mean they are less sensitive to the volatile nature of cryptocurrencies. It means that. world.