Farcaster, a crypto-based social network, raised $150M with just 80K daily users

Farcaster, a crypto social network, raised $150M with top funds involved.

: Farcaster, a blockchain-based social network founded by former Coinbase employees, secured $150 million in funding led by Paradigm and including other key crypto investors like a16z. The platform integrates onchain and offchain elements, storing user identities on Ethereum while keeping most data like posts and reactions offchain. Despite its novel technology and significant funding, its user base is relatively small with 80,000 daily active users.

Farcaster, a new social network based on blockchain technology, managed to raise an impressive $150 million in a funding round led by Paradigm, with participants including a16z crypto, Haun Ventures, USV, Variant, and Standard Crypto. This platform, co-founded by ex-Coinbase employees, utilizes a hybrid approach to store user identities on the Ethereum blockchain, while other interactions like posts and follows are stored offchain to facilitate lower costs and improved performance. The network allows developers to create applications such as Warpcast, its most popular app with functionalities akin to Twitter, and offers features like individual channels and Frames where users can interact more dynamically.

One unique aspect of Farcaster is its payment model where users pay approximately $7 in ETH for the storage of 5,000 posts, opting for deletion of older posts if not paid for, aiming to maintain efficient use of blockchain space. The platform advertises fewer onchain actions to keep costs low and provide enhanced user experience but retains crucial actions like identity verification onchain. Farcaster's design may add a barrier to entry for average consumers unfamiliar with crypto, evident from its peak of 80,000 daily active users compared to millions on other decentralized platforms like Bluesky and Mastodon.

Despite the challenges and a significant drop in general venture funding for crypto companies in 2023, Farcaster's substantial capital injection signals a strong investor confidence in its underlying technology and business model. The funding might help it scale and innovate further within the niche market of crypto enthusiasts and developers, focusing on broader adoption leveraging Web 2.0 strategies. However, reaching a wider audience could challenge Farcaster given the inherent complexities of its crypto-based architecture.