Dan Romero, co-founder of Farcaster, recently made statements to clarify that the decentralized social platform is not shutting down. This follows claims circulating online after the company’s acquisition by Neynar this past week. Romero emphasized that the parent company, Merkle, will return the full sum of $180 million raised back to its investors, portraying this decision as responsible capital management.

The announcement sparked debates online, especially on X, where opponents framed the Neynar acquisition as a prelude to Farcaster’s decline. Supporters countered these claims, asserting it represents a thoughtful transition that aims to sustain the platform while returning capital to investors.

Insights from Founders and Supporters

Romero mentioned in a tweet that Farcaster had approximately 250,000 active users in December of the previous year and has over 100,000 funded wallets, underscoring that the protocol is functional and will remain operational. He also indicated that Neynar, a venture-backed firm involved in the platform’s development from the start, intends to focus the network more on developers.

Romero revealed the acquisition took place on January 21, with the intention for ownership of the protocol contracts and related assets to transition to Neynar in the coming weeks. This transition marks a strategic pivot for Farcaster, which decided to prioritize a wallet-driven model of growth, moving away from a social graph model announced in December 2025.

Investor Reactions

On the subject of investor returns, Romero reiterated that Merkle will be refunding all $180 million raised over five years. He has faced personal scrutiny but clarified that the proceeds from Coinbase’s IPO, not Farcaster’s funds, were used for purchasing his home.

Several investors supported this account. Antonio García Martínez, a prominent user and investor of both Farcaster and Neynar, denounced shutdown rumors as “complete nonsense,” defending the original aim of establishing a permissionless social network that empowers users with data control. Balaji Srinivasan reiterated confirmations of the financial returns to investors, while Linda Xie dismissed criticisms directed at Romero, mentioning inaccuracies in such claims and expressing readiness to collaborate again with him.

Concerns from the Community

However, some community members voiced skepticism. Questions arose regarding how Farcaster, which previously raised $150 million in a funding round led by Paradigm, could sell to a company with lesser funding. Some critics attributed the company’s issues to leadership deficiencies and a lack of communal input, suggesting that Neynar’s leadership would only be effective if they implement a more open governance model.

Additional critiques accused Romero of profiting while the company’s growth faltered. Despite such backlash, others pointed to the inherent challenges in scaling social networks, referencing troubles faced by platforms like Threads and Mastodon.

Currently, opinions within the cryptocurrency community are divided. While some view the transition and reimbursements as a well-organized outcome, others regard it as an expensive trial that didn’t meet anticipations.