Build it and they will come—or so goes the old saying. In reality, if you build a blockchain-based social media network, then almost no one will come. The crypto world got another reminder of this last week when Farcaster, which raised a $150 Series A round in 2024, abruptly called it quits.
If you’re unfamiliar, Farcaster was co-founded by early Coinbase employee Dan Romero and let users share various content via a Twitter-like timeline. The project had the lofty goal of breaking the data monopolies of platforms like Facebook by offering a decentralized alternative—one where users kept control of their data and identity.
Despite a $1 billion valuation and some influential backers, Farcaster never built a meaningful audience beyond an army of bots and a small clique of VC cheerleaders. Eventually, the founders acknowledged the obvious (that no one used Farcaster) and threw in the towel, but with a face-saving announcement that they had arranged a “sale” of the protocol to a third party. To his credit, Romero also announced he would return the $180 million he had raised to Farcaster’s investors.
So what happened? Some on X have pointed to the management team as the primary reason for Farcaster’s failure, a claim that may or may not be justified. What is clear is that there has been little appetite in the market for a crypto social network. This is apparent from the failure of previous efforts, including the scammy BitClout network, and the recent decision by Coinbase’s Base to focus on financial applications over social ones.
All of this reflects how people may love the idea of using a blockchain for data sovereignty but, in reality, they are going to seek out their social media fix on X or TikTok or Reddit. That’s because those platforms are humming with millions of users while providing an interface that is far sleeker than what a crypto startup can conjure up.
There may also be a bigger problem for those trying to build social and other applications on blockchain. Namely, the technology may simply not be cut out to do this—and that crypto should stick to what it’s always been good at, which is finance.
Over 17 years or so, crypto has come up with three killer apps that have found massive product market fit: Bitcoin, stablecoins, and DeFi. All three are squarely in the realm of finance. Meanwhile, the idea of using blockchain to transform other industries like media or supply chains seems as far-off as ever—though there is renewed buzz about using decentralized technology to expand privacy.
As for Farcaster itself, it may stand as the high water mark for an earlier era of crypto that was defined by a popular book about data ownership called Read Write Own. As one observer noted on X: “With Farcaster losing its founders, Chris Dixon’s Read Write Own era is over. Crypto is for Internet Capital Markets. Period.”
Jeff John Roberts
[email protected]
@jeffjohnroberts
DECENTRALIZED NEWS
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The fate of the Genius Act, which would provide regulatory structure for crypto, remains uncertain amid a squabble over rules for stablecoin yields. The bill is stalled in Senate sub-committees, but one insider thinks it has momentum. (Coins2Day)
Binance is setting up shop in Greece, where it filed for a pan-European MiCA license and set up a holding company. The license will become mandatory for all crypto companies in the EU as of July 1. (Coins2Day)
Crypto video game tie-ups have largely proved a flop, but a startup called ZBD with ties to a Bitcoin OG believes it’s found a model. It raised $40 million from Blockstream Capital to focus on crypto-based payments for gameplay. (Coins2Day)
MAIN CHARACTER OF THE WEEK
Even at a Davos gathering heavy on crypto content, CZ stood out for a televised interview with Andrew Ross Sorkin where he described in intimate detail the strip search process during his prison stay.
MEME O' THE MOMENT
In a final sign the metaverse era is done for good, Mark Zuckerberg turned the lights off on the remains of a project that once seemed so important that he renamed his company for it.
