Silicon Valley venture capitalist Dan Romero recently shared his journey from being an early team member at Coinbase to founding the decentralized social finance (SocialFi) platform Farcaster in an interview. He not only talked about the entrepreneurial ecosystem in Silicon Valley, but also discussed the future of cryptocurrencies, personal mindset, and how to succeed in the Web3 industry, while also offering some valuable insights.
Five years at Coinbase laid the foundation
Dan Romero joined the renowned exchange Coinbase in 2014 as its 20th employee, experiencing the development from a $100,000 valuation to a multi-billion dollar scale alongside Coinbase. Romero revealed, “The early days were really tough, we worked hard every day, but the outside world always associated Bitcoin with dark web transactions and exchange collapses.” He also joked that most engineers attracted to Web3 were outliers.
Romero himself initially believed that “Bitcoin was a Ponzi scheme,” but after reading the Bitcoin whitepaper, he was convinced and immersed himself in the Web3 field.
The worst experience that year, the Ethereum flash crash
Romero recounted that Coinbase actually went through a major crisis in 2017, which was the Ethereum “flash crash” incident, where a system design flaw caused the price of Ether (ETH) to collapse from $319 to $0.10, leading to user complaints and government investigations. Additionally, there was the Bitcoin Cash (BCH) fork incident. Coinbase was accused of engaging in “insider trading,” putting immense pressure on the entire team. Romero stated that it was the lowest point for him at Coinbase, but added, “Every time you fall, you have to get back up, and eventually you will succeed.”
The start of Farcaster, the original intention of creating a crypto Twitter
In 2020, Romero left Coinbase and spent a year and a half traveling, reading, and reconsidering his future direction. He then founded the decentralized social protocol Farcaster in 2021, aiming to create a blockchain-driven social network to become the core platform for the cryptocurrency community, providing them with a more friendly space for communication and innovation. He pointed out that the motivation at the time came from disappointment with traditional media: “Public discourse should not be controlled by a few companies.” He believed that the importance of traditional media was diminishing and that the future influence would lie in live streaming and decentralized content platforms. He suggested, “Live streaming platforms like Twitch or Twitter will replace traditional media, but the key is how to break through in content distribution.”
Initial promotion setbacks, later focusing on serving Web3 enthusiasts to turn the tide
In the early days of Farcaster, Romero chose the most grassroots approach to promotion, personally calling 400 friends and industry professionals, explaining the product concept in detail and guiding them through registration. However, he admitted that this process was very frustrating, saying, “Many friends registered but never used it again, like recommending a bad product to friends, user retention is really difficult.” Upon reflection, Romero realized that Farcaster needed to focus on serving a small group of “developers and creators who truly love blockchain.” These individuals not only became loyal users but also attracted more like-minded people through Farcaster.
Farcaster open for developer participation,
Frames V2 set to launch
Another key strategy was to involve external developers in building Farcaster, with innovative applications like the popular social meme platform “Clanker World” and the social application “Anoncast” on the Base chain being developed based on Farcaster. Romero stated, “As we focus on optimizing core functions, developers start helping us with other innovations, which is a breakthrough.” When discussing Farcaster’s key innovation, Romero expressed great anticipation for the upcoming Frames V2. He mentioned that Frames V2 would allow users to interact directly with the blockchain on the social platform, such as buying NFTs or participating in DeFi applications, with just one click to carry out blockchain operations.
A new bull market is underway, Bitcoin reserves triggering global demand
When asked about his views on the current cryptocurrency market, Romero stated, “We are at the beginning of a new bull market, especially with the approval of a Bitcoin spot ETF and more institutional funds flowing in, the market potential is quite astonishing.” He also specifically mentioned the possibility of Bitcoin becoming a national-level “strategic reserve asset,” which could not only impact market confidence in the crypto market but also force other countries to reexamine their reserve policies, thereby triggering global demand for Bitcoin. Romero said that this was unprecedented, and the “Bitcoin reserve” issue could become the main driving force for the next wave.
Leading infrastructure, technological environment driving industry upgrades
At the same time, Romero believed that a significant highlight of 2024 would be the noticeable progress in the infrastructure of the crypto industry, which was quite different from previous bull markets. Romero recalled the high transaction fees and slow confirmation times on Ethereum in 2017, which prevented many applications from truly taking off. However, the current situation is completely different, with Layer 2 scaling solutions like Base and Solana significantly reducing transaction costs and improving processing efficiency. He said, “In the past, people had ideas but couldn’t implement them, but the current technological environment can make almost all ideas possible.” Finally, Romero encouraged young people based on his own experience: “Make progress every day and persist for ten years, you will be amazed at your growth.” He also reminded all entrepreneurs entering the crypto industry to maintain a stable mindset: “Don’t get too excited at the peak, and don’t give up in the trough, steady progress is the key to success.”