Farcaster announced in late May it raised $150 million led by Paradigm, with participation from other notable crypto venture firms. This followed reports in March that the decentralized social media platform was looking to raise at a $1 billion valuation.

It seemed like a good time for Farcaster to raise money, given that the platform had taken off earlier in the year after the launch of the Frames feature at the end of January. The Frames allowed for interactive experiences to be embedded within posts on the platform, allowing users to play games, watch movies, mint NFTs, or do instant checkout, all without leaving the app.

Farcaster’s functionality is sort of a hybrid of X and Reddit. Users can use their accounts to post text-based content, which can include images if they choose, and they can also join communities to discuss specific topics. Users sign up using a wallet, which has allowed many users to reward fans and community members directly. For instance, the popular Base-based memecoin DEGEN started as an airdrop to Farcaster users who were a part of the Degen channel.

Ethereum co-founder Vitalik Buterin is also a strong supporter of Farcaster and it is where he does most of his posting.

It costs $5 a year to have a Farcaster account, but given that an X blue checkmark is $8 per month, that might not feel so expensive to power users of Musk’s social media platform. That being said, you can use X and most other social media networks for free.

However, Farcaster was able to attract many new users when the hype around Frames was highest, especially as people started to join the platform hoping to get in on community or fan-based airdrops. So, many people have already paid the $5 necessary to keep the lights on for their Farcaster account for the rest of the year.

Farcaster quickly grew from 10,000 posts per day in January to over 500,000 by March. However, as we have seen with another popular social finance platform, friend.tech, explosive growth can often lead to a rapid downfall after the hype dies out.

For a while, Farcaster’s user growth seemed healthy in the context of actual usage, with the number of casts, or posts, on the platform each day growing into April, way after Frames launched and reaching over 1.5 million at its peak.

But since then, the amount of activity on Farcaster has slowed down, dropping back below 700,000 casts per day. That is still sizable compared to the number of posts the network was seeing before Frames but is a 50% drop from the April highs. The number of reactions to posts has fallen even more sharply, from 5.4 million to just 1.4 million.

That being said, the number of users casting remains quite high, peaking at the end of May and holding on to a lot of that growth, with over 47,500 casters. Farcaster has seen a large exodus of bots lately, however, which Andrew Hong of Dune Analytics suggests could be related to changes in the Warpcaster (the main Farcaster client) algorithm or the DEGEN tipping allocation.

People may be using both Farcaster and X for their social needs by either posting to both or tailoring content to one or the other. One thing X has going for it is that it has a much broader audience, which might appeal to some people. The relatively crypto-native user base and ability to join like-minded communities have led to some complaints that Farcaster is an “echo chamber,” which could be contributing to the platform’s recent decline.

It’s still far too early to declare the demise of Farcaster, as early projects often see high growth followed by some tempering of activity and usage, and given Farcaster’s daily activity still surpasses that of Lens, one of its biggest competitors in the decentralized social network space.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry’s most thought-provoking trends.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

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