A recent funding round is poised to increase the value of Merkle Manufactory, the company behind Farcaster, to a billion-dollar valuation, as reported by Bloomberg, citing informed sources.

Paradigm, a crypto investment firm with notable investments in major crypto companies like Coinbase, Blur, dYdX, Compound, and Citadel Securities, is leading the funding round.

Co-founded in 2020 by former Coinbase executives Dan Romero and Varun Srinivasan, Merkle's main offering, the social media app Warpcast, is constructed on top of the decentralized network for social media applications, Farcaster.

Romero announced on March 28 that Merkle is raising funds, without confirmation of Paradigm's involvement. A previous funding round saw Merkle secure $30 million from venture capital firm A16z Crypto in July 2022.

The introduction of Frames on the Farcaster platform earlier this year has driven a substantial increase in user engagement, allowing users to run apps within posts, conduct transactions, access blog posts, and participate in surveys directly within the app.

Following this update, the number of daily active users on the Farcaster network surged from around 5,000 on January 28 to over 249,000 by March 30, based on data from Dune Analytics.

Decentralized social media platforms, which provide users with data and content ownership, are becoming more popular due to characteristics like censorship resistance and direct content monetization. Prominent platforms in this space include Friend.tech, Minds, and Mastodon. Retaining users is a major challenge faced by decentralized social media platforms, as noted by industry executives.

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