Farcaster's Major Transformation: a16z and Others Invest 180 Million USD to Disrupt Web3 Social Media
ABCDE announced the cessation of new project investments and the suspension of Phase II fund raising, sparking another round of lamentation on Crypto Twitter about "VC is dead." However, in the previous cycle, VCs were at their peak, creating narratives to boost valuations, packaging each PPT as the future of the internet.As the decentralized social leader Farcaster, which raised a total of 180 million USD across two bull markets, it undoubtedly represents the best example of VC narratives. Yet Farcaster's answer is becoming increasingly clear—it no longer bets on the "imagination of decentralization" but rather on the "execution power of assetization." Farcaster is not a failed product; rather, it represents another narrative collapse in the crypto world. VCs realize they lack the ability to reconstruct the world and are cashing out in a story of pre-valued exits.Recently, Farcaster protocol co-founder Dan announced that the team is considering renaming the current official client app Warpcast to Farcaster and simultaneously changing its web domain to farcaster.xyz. The intention is to simplify the brand system and resolve confusion among new users between the protocol and the application.In 2021, Farcaster launched as a desktop product and transitioned in 2023 to mobile and web applications under the new name Warpcast. The initial renaming was intended to make it easier for other developers to build their own clients based on the protocol if the client (Warpcast) and the protocol itself (Farcaster) had different names, thereby driving protocol user growth. However, this plan did not materialize as expected. According to team feedback, the vast majority of users still register accounts and access the protocol through Warpcast.According to Dune data, since open registration in the second half of 2023, Farcaster's DAU/MAU ratio has lingered around 0.2, only briefly reaching 0.4 at the start of 2024 due to the viral breakout of DEGEN, before quickly falling back. In contrast, early Web2 community products like Reddit or Mastodon maintain a stable DAU/MAU ratio between 0.25 and 0.3. Farcaster's data indicate that despite maintaining high topicality in the crypto community, user habits have not been truly established. Active users are mainly a small group of heavy creators and on-chain natives, with no sustainable content consumption and social loop formed.In February 2024, the social token $DEGEN became popular in Warpcast's "Degen" channel, becoming the main driver of Farcaster's breakout. The Farcaster team realized that channels serve as carriers that gather people, attention, and liquidity. Farcaster founder Dan considers this an important difference from centralized social media like Twitter, allowing small communities to exist within a larger social graph. However, in July 2024, network scaling bottlenecks of the Farcaster protocol emerged, and the team announced a pause on channel decentralization to rethink the implementation path.At the end of November 2024, Farcaster began exploring the integration of a tradeable wallet within the app, Warpcast Wallet, allowing users to deposit tokens, exchange, transfer, and interact on-chain. Warpcast Wallet charges a 0.85% fee, of which 0.7% is counted as Warpcast revenue. The revenue curve continues to grow, validating the feasibility of the embedded wallet commercialization path. However, since the Warpcast built-in wallet is not embedded at the protocol layer, some developers believe the protocol has become centralized and monopolistic.Farcaster launched the Frame lightweight application standard, upgraded to Frame v2 (later renamed Mini App) at the end of 2024, supporting HTML, CSS, and JavaScript to build near-native experience applications. It integrates the built-in wallet, promoting the combination of transactions and content distribution. In March 2025, Scalar Capital co-founder Linda Xie joined the team to promote Frame development, with daily active users briefly surpassing 40 thousand.Farcaster's changes reflect the dilemmas of the entire Web3 social track: open protocols struggle to build user scale, content distribution does not drive transactions, and ultimately rely on asset-driven models. Farcaster’s multiple breakouts are tied to tokens, showing its essence as an asset distributor rather than a social network.a16z, as a major investor, led multiple funding rounds in Farcaster, investing a total of 180 million USD, with valuations reaching up to 1 billion USD. Crypto investors point out that this is more a self-consistent capital operation loop rather than genuine market demand. The VC model has failed in crypto; crypto is not the next internet. Truly user-accepted crypto systems rely on mechanism design and liquidity priority.The biggest crisis in the crypto industry is strategic confusion and demand vacuum. The essence of VC failure is the lack of value, and the industry lacks the ability to continuously create user value.