Why We Invested in Farcaster?
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Why We Invested in Farcaster?
A notable feature of Farcaster is its high-quality, low-noise community atmosphere.
Navigating Web3 tides with focused insightsAuthor: Jesse Walden & Alana Levin
Translation: TechFlow
The Farcaster community feels like a microcosm of the early crypto community I (Jesse) joined a decade ago: optimistic, technical, ambitious, collaborative, and always online.
For the average everyday user, Farcaster is an emerging but rapidly growing protocol aiming to build a “fully decentralized social network.” Compared to traditional social media, one of its standout features is a high-quality, low-noise community atmosphere. This is a direct result of the core team’s careful curation of the social graph—literally one by one—and years of effort by early enthusiasts.
For technologists, Farcaster promises a new distribution channel with permissionless building blocks that unlock the crypto potential so many of us came here to pursue: permissionless identity, money, and data.
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Identity: Every identity on the network is tied to a crypto wallet. Every post, message, and click on the network is signed and stamped with the associated FID. This is powerful because it means all interactions are authenticated in a self-sovereign way. For users, history can be verified. Developers can also interact directly with users and permissionlessly build holistic views of their profiles—not just on Farcaster, but even on-chain.
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Money: Since every Farcaster account is linked to a wallet, the ability to receive and send payments is a native feature of the network itself, unlocking tipping, minting, crowdfunding, asset creation, and more. The result is dramatically reduced transaction friction.
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Data: All social data on Farcaster is stored across a distributed network of hubs. The Farcaster protocol aims to incentivize decentralized data storage, giving users and developers confidence that their data won’t be removed by a platform. This has a dual effect: trust attracts high-quality developers into the ecosystem, while persistent openness means businesses built around the network can create richer experiences than their Web2 counterparts.
A notable example is community currencies, which leverage the network's open social graph and connected wallets to allow users to tip and earn income.
Frames are another compelling example. These interactive mini-applications exist as posts within social feeds, but can also appear in any embedded wallet interface, enabling developers to meet users where their wallets already are. Frames verify the identity of interacting users, facilitate payments, and leverage users’ on-chain and social data to unlock additional functionality. We’ve already seen a variety of interesting Frames, such as embedded stores, minting platforms, mini-games, and payment interfaces. We’ve even built a Frame ourselves to help the community learn about another investment of ours, Botto, which has already leveraged Frames as a distribution channel and conducted major auctions through the network.
To date, approximately 400,000 users have joined the network, primarily testing it through Warpcast—the first client built on the protocol. The development of channels as dedicated spaces within Warpcast has created a unique, subreddit-like feel, helping users find deeper communities within the network.
At the protocol level, major developments have shifted the network from permissioned to permissionless. Core functionalities—including Frames, cast actions, and upcoming channels—are progressively decentralizing, fostering the emergence of an early ecosystem of alternative clients.
Our team is thrilled to participate in this network both as users and builders. Members of our team manage channels like 0to1, soundscapes, countrymusic, and the Frames Hackathon. The Frames hackathon we hosted in our office was charged with the kind of frenetic energy usually found only in the most exciting new scenes. We also support teams like Nook, Kiosk, and Farworld Labs, who are helping scale users and enrich client diversity on the network. Supporting early teams and supporting Farcaster go hand in hand: protocols succeed when third-party businesses can sustainably build on top of them. The more teams focused on onboarding new users, the better.
This brings us to Merkle, the company behind Warpcast and a core contributor to the Farcaster protocol. Building and maintaining both an excellent product and a complex decentralized protocol simultaneously isn’t easy, but doing both at once is often the best way to get started. Dan and Varun have built one of the most efficient, highest-quality tech teams in crypto, and they’re still growing.
For these reasons, Variant, alongside new investors Paradigm, USV, and Haun, has participated in Farcaster’s Series A round. While we typically focus on earlier-stage crypto projects, we occasionally bend our own rules when the opportunity warrants it. In Farcaster’s case, the core team, early developer ecosystem, and user base represent crypto at its best—in capability, attitude, and ambition. We’re excited to be involved and to continue contributing to the network’s growth.
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