Paradigm’s investment is poised to elevate the value of Merkle Manufactory, the parent company of the Farcaster social network, to a unicorn status—reaching a valuation of $1 billion, as per sources familiar with the matter cited in a Bloomberg report.
The funding round is led by Paradigm, a crypto investment firm renowned for its portfolio encompassing major crypto entities like Coinbase, Blur, dYdX, Compound, and Citadel Securities.
Established in 2020 by former Coinbase executives Dan Romero and Varun Srinivasan, Merkle focuses on the social media application Warpcast, which operates atop the decentralised network designed for social media apps, Farcaster.
While Romero confirmed Merkle’s ongoing capital raise in a post on March 28, Paradigm’s involvement has not been officially verified. Merkle had previously secured $30 million in funding from venture capital firm a16z crypto back in July 2022.
The introduction of Frames by Warpcast in January has notably spurred user activity on the Farcaster platform. Frames, a feature enabling apps to function within posts seamlessly, allows users to perform various tasks such as minting nonfungible tokens, conducting transactions, accessing external blog posts, and participating in surveys—all within the app itself.
This update has led to a substantial surge in user engagement, with the number of daily active users on the Farcaster network soaring from around 5,000 on January 28 to surpassing 249,000 on March 30, as per data from Dune Analytics
Decentralised social media platforms, leveraging blockchain technology, offer users ownership rights over their data, content, and interactions, diverging from the centralised control characteristic of traditional social media. These platforms boast features like censorship resistance and direct content monetization sans intermediaries. Prominent players in this domain include Friend.tech, Minds, and Mastodon. However, industry insiders note that one of the primary hurdles for decentralised social media platforms remains user retention.