Coinbase Ventures and Andreessen Horowitz (a16z) have recently co-led a $10 million funding round for Towns Protocol. Towns Protocol is described as the web3 version of popular web2 applications like Discord and Slack but with a focus on providing decentralized control. This funding round also saw participation from Union Square Ventures, Kindred Ventures, Seed Club Ventures, and others, signaling strong institutional interest in building the next generation of online communities beyond traditional platforms.
Founded in 2022 by Ben Rubin, Towns Protocol is a Web3-native communication protocol designed to bring group chats, online communities, and social interactions fully on-chain. Each “town” represents a group or community space that lives entirely on-chain, governed by smart contracts that allow for programmable rules around membership, moderation, and revenue sharing. The project aims to make group communication a first-class citizen in Web3, alongside identity, finance, and governance.
The decision by Coinbase and a16z to back Towns Protocol reflects a growing conviction among investors that decentralized communication is the next major layer of the crypto stack. After years of innovation in areas like DeFi, infrastructure, and gaming, attention is now turning to how communities interact, organize, and scale in trustless environments. Towns is seen as an essential tool for making crypto communities more resilient, secure, and autonomous, aligning with Coinbase’s broader goal of supporting user-controlled, censorship-resistant ecosystems.
Existing platforms like Discord, while widely adopted by crypto communities, come with downsides such as centralized control, data vulnerability, spam attacks, and lack of native crypto integration. Towns Protocol aims to address these issues by allowing communities to vote on membership and rules, enabling wallet-native access for entry to chats, and empowering developers to build apps and bots that plug directly into towns. This approach appeals to DAOs, NFT projects, and Layer 2 ecosystems looking for customizable, secure communication tools that can evolve with their needs.
The Towns Protocol team plans to use the $10 million funding to expand engineering and developer support, improve protocol scalability, and launch a public beta later this year. They are also working on open-sourcing key components of the stack and enabling easy integration with other Web3 apps and wallets. In the long term, the project aims to become a core social layer for decentralized applications, functioning much like Ethereum did for programmable money but for programmable community interaction.
In conclusion, the investment in Towns Protocol by Coinbase Ventures and Andreessen Horowitz highlights the growing importance of decentralized communication in the Web3 era. Towns aims to reshape how online communities interact and govern themselves, offering decentralized control and programmable rules. With the funding received, Towns Protocol plans to further enhance its platform, expand its reach, and establish itself as a key player in the evolving landscape of online communities in the crypto space.
