Bluesky, a decentralized alternative to Twitter, has secured $8 million in a seed round led by Neo, a community-led firm with partners including co-founder Ali Partovi and former director of product management Suzanne Xie, the company said in an announcement Wednesday.

"Many of our other investors bring deep experience from the open source space," Bluesky CEO Jay Graber told Decrypt. "Some notable ones include Bob Young who founded the open source software company Red Hat, Automattic, the company behind WordPress, Amir Shevat, who previously led the developer platform at Twitter, Amjad Masad who founded Replit, and Jeromy Johnson, our technical advisor who built IPFS and founded Mana."

According to Bluesky, the company plans to use the fresh funding to expand its team and enhance the decentralized AT Protocol that powers the Bluesky app, among other activities

While being positioned as an alternative to Twitter, Bluesky is largely the brainchild of the social media platform, which in December 2019 announced it was funding an independent team to work on an open and decentralized social media standard.


In February 2022, Bluesky became a completely independent organization, with the beta release of its app hitting the App Store one year later.

The company further said that while the source code for the protocol and the client were made public, it also wants to be transparent about its business plans while “experimenting with different strategies and services to see what provides real value to our users.”

Bluesky didn’t immediately respond to Decrypt’s request for comment.

Domain names as Bluesky handles

Bluesky is also rolling out paid services, starting with custom domains offered in partnership with domain registrar Namecheap.


“We believe that there must be better strategies to sustain social networks that don’t require selling user data for ads,” Bluesky said in a blog post. “Our first step in another direction is paid services, and we’re starting with custom domains.”

Users have the ability to set a custom domain as their handle on Bluesky and the AT Protocol in under a few minutes, with the company saying that “over 13,000 users have already either repurposed domains they already owned to use as handles, or purchased a domain solely because of Bluesky.”

"We believe that the future of social media allows users to choose their own experience and developers to freely build," said Graber. "Society needs a protocol for public conversation that creates interoperability between services, providing an open commons not beholden to the decisions of a single company. So we’re building the AT Protocol ecosystem as well as the Bluesky app."

Among these users, as revealed by the company, are some U.S. Senators that have used the domain to verify their identity on Bluesky independently.

A third-party developer has also built a web extension that checks if websites are linked to an AT Protocol identity.

Stay on top of crypto news, get daily updates in your inbox.