Original author: Xiaobing
In less than nine months, Farcaster has changed hands for the third time.
On October 15, Rish, co-founder of Neynar, announced that the Network School, founded by Balaji Srinivasan, would take over Farcaster, encompassing the Farcaster application, protocol code repository, and related products. Most of Neynar's employees will be merged into Network School to continue development, while Rish and co-founder Manan have chosen to leave.
This is the second ownership transfer Farcaster has experienced in 2026. In January, Neynar had just bought it from the founding team Merkle Manufactory.
A so-called "decentralized" social protocol, yet the control over user access has been passed around like hot potato.
Nine months, three owners
Let's take a look at the timeline.
2024: A highlight moment. Farcaster completed a $150 million Series A funding round, led by Paradigm and a16z crypto, with a valuation of $1 billion. After the launch of the Frames feature, daily active users soared by 400% within a week, peaking at nearly 100,000.
2025: Slow bleeding. After the initial hype faded, daily active users dropped 40% from their peak, and new registered users plummeted 95% from 15,000 per day to less than 650. Monthly revenue fell from hundreds of thousands at its peak to about $10,000. In May, the official client Warpcast was rebranded as Farcaster, while third-party clients were nearly all marginalized. A "protocol" transformed into an "App."
January 2026: The first sale. Co-founders Dan Romero and Varun Srinivasan announced their exit from daily operations to focus on a wallet application based on Farcaster. Romero made a remark that stirred mixed feelings in the community: "After five years, Farcaster clearly needs a new path and leadership." Merkle Manufactory packaged and sold the protocol contracts, code repository, core application, and the AI token issuance platform Clanker to Neynar, while announcing a full refund of the $180 million financing to investors.
This move is quite rare in crypto history. A project that raised $150 million at Series A, with a valuation of $1 billion, and the founders said "we didn't make it," returned the money and sold the assets, shifting to a new track. No matter how this is evaluated, at least it is far more dignified than "running away with the money."
January - August 2026: Neynar's seven months. After taking over, Neynar directed Farcaster toward developers. However, the data continued to deteriorate. Data from DefiLlama showed that protocol revenue (including Clanker) plummeted from about $27.88 million in Q1 to $3.88 million in Q2, and only about $246,000 in Q3. Revenue evaporated by 99%.
August 17, 2026: Neynar also couldn't hold on. Rish posted on X, stating that Neynar began searching for a "new home" for Farcaster, Clanker, and the Neynar developer platform.
October 15, 2026: Network School takes over. Rish stated that the team considered multiple options and ultimately chose Balaji's Network School. The fate of Clanker was not mentioned in the announcement. According to the host of the GM Farcaster podcast, Rish was considering spinning off Clanker to find another buyer.
Who is Network School?
The Network School that took over is backed by the "prophet" of the crypto world, Balaji Srinivasan.
Balaji's resume needs little introduction: former CTO of Coinbase, former general partner at a16z, author of "The Network State," and initiator of the outrageous bet that Bitcoin would reach $1 million in 90 days in 2023.
Network School is a practical project based on his "network state" theory. Initially launched in Singapore, later attempted in Malaysia but faced regulatory obstacles, and in July 2026 signed a memorandum with the Ministry of Artificial Intelligence and Digital Development of Kazakhstan, relocating its headquarters to Astana. Over 200 people moved to work at the local alem.ai international AI center.
Balaji referred to Astana as "the next Dubai, the next Singapore."
On October 9, just six days before acquiring Farcaster, Network School announced a new funding round at the Network State Conference 2026, with Polychain Capital leading the round and a16z and Coinbase participating, with a valuation of $2 billion.
A project just freshly funded and valued at $2 billion, taking over a decentralized social protocol that had been abandoned by its founder and second operator, what exactly does Balaji see in it?
"Social Smart Contracts": A Centralized Turn for a Decentralized Protocol
The answer lies in the new rules announced by Network School.
Farcaster will be renamed "Network State Protocol" (some reports also mention "Network Nation Protocol"), shifting its positioning from "decentralized social network" to "a voluntarily joined digital social network that ultimately reflects the real world."
Three notable changes are worth mentioning:
First, social smart contracts. All users must choose to accept or reject a "social smart contract." Users who accept will mint an on-chain NFT as proof. Users who reject retain read-only access, and their keys, funds, following lists, and posting history will be migrated to other clients.
Second, content censorship rules. A series of "digital felonies" is defined, based on Singapore's "Public Code of Conduct": hate speech, death threats, fraud, repeated provocation, stalking harassment, and impersonating AI-generated content as human-created.
Third, AI auditing and human verification. AI-assisted content auditing is introduced, and users are gradually required to complete "human proof" verification to reduce bots.
This set of rules has already sparked controversy in the community. The Block reported that multiple users stated they were retroactively banned due to posts made months ago regarding Elon Musk, Flock cameras, and "Gay Thank You Day."
A decentralized protocol is now requiring users to sign a "Code of Conduct," use AI to audit content, and distinguish "good citizens" from "read-only users" with NFTs.
Are they building a new type of digital society, or constructing a centralized platform adorned with blockchain?
The real problem: The contradiction between protocol layer and application layer
The three transfers of Farcaster expose a fundamental structural contradiction in the decentralized social track.
The protocol layer is indeed decentralized. Farcaster's Snapchain achieves over 10,000 TPS and a 780 millisecond confirmation delay, with technical metrics that are even better than many L1 public chains. The code is open source, and anyone can build clients on the protocol.
But the application layer has never been.
Warpcast (later the official Farcaster App) has long occupied "basically 100% of user activity," completely marginalizing third-party clients. The protocol is open, but user access is monopolized. This means whoever controls that App controls the user experience, content strategy, and commercialization direction of the entire protocol.
This is why Farcaster can be "sold." You cannot sell a truly decentralized protocol, just like you cannot sell TCP/IP. But you can sell the company that occupies the only meaningful user access on the protocol.
Merkle sold it because the founders wanted to do something else. Neynar also couldn't hold on after seven months because both users and revenue were collapsing. Now Balaji has taken it over, aiming to reshape it into the social infrastructure of the "network state."
Each new owner comes in with a different vision.
Yet they face the same question: on a platform with fewer than 250,000 MAUs, less than 60,000 daily active users, and monthly revenue dropping to a few tens of thousands, any grand narrative must first answer a simple question.
Where are the people?
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