Merkle Manufactory's Valuation Skyrockets to $1B, Fueled by Paradigm and User Growth
Summary:
Merkle Manufactory's valuation is projected to hit $1 billion in a new investment round led by crypto investment firm Paradigm, according to Bloomberg sources. The company, co-founded by former Coinbase executives and creators of the Farcaster social network, is witnessing a surge in user activity since the introduction of their new feature, Frames, within the social media app, Warpcast. The new feature promotes in-app user engagement, leading to a substantial increase in daily active users. Notably, decentralized social media platforms - that capitalize on the blockchain technology and allow users to maintain control over their data and content - are growing in popularity, yet grappling with the challenge of user retention.
Bloomberg sources report that the impending investment round will escalate the valuation of Merkle Manufactory, creator of the social media network, Farcaster, to a staggering $1 billion. The forefront of this investment drive is the cryptocurrency investment company Paradigm, which already has prominent crypto businesses in its portfolio, including Coinbase, Blur, dYdX, Compound, and Citadel Securities. Two former executives from Coinbase, Dan Romero and Varun Srinivasan, established Merkle in 2020. Their primary product is a social media tool called Warpcast, which is constructed on the decentralized framework of Farcaster used for social media applications. On March 28, Romero affirmed in a post that Merkle was securing more funds, although Paradigm has yet to substantiate their participation. A16z Crypto, the venture capital firm, previously invested $30 million in Merkle during July 2022.Consumer activity on the Farcaster platform has dramatically escalated since the introduction of Frames within Warpcast, an aspect that enables apps to operate inside posts without needing to leave the platform. This implies users can create nonfungible tokens (NFTs), initiate transactions, access blog posts from external sources, and reply to surveys without leaving the application. User engagement has experienced a dramatic lift due to this update. Dune Analytics data shows the number of daily active users on Farcaster increased from approximately 5,000 on January 28 to over 249,000 on March 30.Decentralized social media platforms represent a fresh form of network that utilizes blockchain technology to grant users control over their information, material, and communication, thus deviating from the centralized model common in conventional social media. Key identifiers of these platforms include resistance to censorship and the capacity to earn from content without needing a middleman. Friend.tech, Minds, and Mastodon are well-known names in this area. As per two executives in the sector, retention of users is a significant challenge facing decentralized social media networks.
Published At
3/30/2024 10:43:06 PM
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