Merkle Manufactory’s Valuation Hits $1B Following Paradigm Deal

Table of Contents

• Unicorn Status 
• Farcaster’s Jump In Popularity 
• The Rise Of Decentralized Social Media Platforms

According to sources familiar with the developments, Merkle Manufactory, the company behind the Farcaster social network, is nearing the completion of a funding round that could value the company at $1 billion. 

Paradigm, a cryptocurrency investment group investing in several high-profile crypto projects, is leading the funding round. 

Unicorn Status 

The funding round is being led by Paradigm, whose portfolio includes several major crypto firms such as Coinbase, Blur, Compound, dYdX, and Citadel Securities. Merkle Manufactory is the entity behind the hugely successful Farcaster social media network. However, only limited details regarding the funding are available. Dan Romero, one of the co-founders of Merkle Manufactory and a former vice president at Coinbase, confirmed that the company is seeking money. However, he did not disclose how much. He also declined to comment about the valuation. Paradigm has also yet to respond to the developments. 

“Wanted to let everyone know that Merkle Manufactory is closing a new round of financing. Will share more details soon.”

Merkle had previously raised money in a $30 million funding round led by a16z crypto in July 2022. 

Farcaster’s Jump In Popularity 

Merkle’s Farcaster platform has seen a significant jump in popularity and user activity after Warpcast introduced Frames. This feature allows users to run apps inside posts without leaving the platform. Users can use Frames to mint non-fungible tokens (NFTs), perform transactions, access external blog posts, and respond to surveys directly from the app. 

The introduction of Frames has resulted in a significant boost to user engagement. According to data sourced by Dune Analytics, the number of daily active users on the Farcaster network shot up from approximately 5000 on January 28th to over 249,000 on March 30th. 

The Rise Of Decentralized Social Media Platforms

Decentralized social media platforms have emerged as a new class of networks that use blockchain technology to give users complete ownership of their data, interactions, and consent, helping them move away from the centralization seen in traditional social media platforms and applications. Decentralized social media platforms are characterized by several features, such as censorship resistance and the monetization of content without intermediaries. Popular platforms in the space include Friend.tech, Minds and Mastodon, and Merkle’s Farcaster. 

Merkle was founded in 2020 by former Coinbase executives Romero and Varun Srinivasan. Its flagship product is the social media application Warpcast, built on the Farcaster network. According to Romero, the fundamental premise for Farcaster is a protocol that no single entity controls. He went on to add that these circumstances represent the long-term equilibrium state for the global public square.

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