Decentralized Discord? Can Towns, Backed by a16z, Break the On-Chain Social Curse?
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Decentralized Discord? Can Towns, Backed by a16z, Break the On-Chain Social Curse?
The total supply of Towns tokens is 10 billion.
Navigating Web3 tides with focused insightsAuthor: 1912212.eth, Foresight News
On April 11, Web3 social protocol Towns Protocol raised $10 million in a Series B funding round led by a16z crypto. Coinbase Ventures participated for the first time, while Benchmark continued its support with additional investment. As early as February 2023, Towns completed a $25.5 million Series A round, also led by a16z.
At a time when the crypto market is mired in despair—where fundraising has nearly vanished even in niche sectors and amounts in popular sectors have sharply declined—why does a16z continue to back the unfavored social track? What exactly is new about Towns?
An Open-Source Protocol for Real-Time Messaging Applications
Towns Protocol is an open-source protocol designed for building decentralized real-time messaging applications. It includes an EVM-compatible Layer 2 chain and decentralized off-chain streaming nodes deployed on Base. Towns enables users to create programmable communication use cases in a permissionless manner, known as Spaces. These Spaces are ownable, support on-chain subscriptions (membership), scalable reputation systems, and end-to-end message encryption.
The Towns Protocol ecosystem aims to empower individuals to securely and permissionlessly create, manage, and participate in digital communities. Its primary goal is to provide a robust, secure, and decentralized platform where users maintain full control over their data, privacy, and interactions within these digital spaces, while safeguarding their reputation.
The Towns messaging protocol serves as the core infrastructure for verifying and transmitting encrypted messages between users. It introduces an innovative approach to secure, private group messaging. Designed to operate seamlessly within blockchain infrastructure, it leverages the resilience of decentralized technologies to deliver a high-quality, permissionless messaging experience.
Read/write permissions are secured on Base, allowing Towns to make trade-offs in liveness to deliver messages at speeds comparable to existing centralized social networks, even to thousands of participants. Initially built for broad chat application scenarios with embedded chat logic, the protocol will eventually be abstracted into a foundational layer for all forms of encrypted messaging use cases.
What Are Its Key Features?
Towns consists of three main components: First, the Towns Chain—an OP-Stack-based Layer 2 blockchain solution that serves as the backbone of the Towns messaging protocol, providing consensus and security. Second, streaming nodes responsible for managing message flow within the protocol, handling tasks such as message validation, storage, and encryption. Third, permission management, which governs user access and permissions within Spaces to ensure secure and organized communication environments.
The interface resembles Discord, but Towns has its own distinct characteristics. Its login screen supports Google and Twitter accounts, and even includes competitor Farcaster—no native crypto wallet required.
Application Chain Built for Social Networks
Towns Protocol is an application-specific chain purpose-built for social networking, securing read/write permissions separately on Base. This design allows trade-offs in liveness so messages can be delivered quickly to thousands of participants, matching the speed of current centralized social networks.
Ownable Communication Spaces
Space creators truly own the Spaces they create—these exist as on-chain assets.
Programmable Spaces
Spaces are deployed on-chain via programmable interfaces, enabling custom rules (e.g., who can read or write) and integration with any external EVM-compatible smart contract.
On-Chain Membership with Built-in Protocol Fees
Users must hold valid membership tokens to send or receive messages within a Space. Membership pricing includes protocol fees used to cover network operating costs.
On-Chain Social Graph
Membership tokens and Spaces are discoverable on-chain, forming a transparent social network structure.
Scalable Reputation System
As Spaces are programmable, members can maintain peer-based reputation scores specific to each Space, which are also on-chain and publicly verifiable.
End-to-End Encrypted Messaging
Advanced encryption ensures secure and private communications, protecting message content between senders and authorized recipients.
Tokenomics
According to official documentation, the Towns token is deployed on the Ethereum mainnet with an initial supply of 10 billion tokens. The Towns token serves multiple roles within the ecosystem, including delegation to node operators, space address delegation, and governance participation.
Tokens can be delegated to node operators—who are critical to network operations. To gain DAO approval and begin operation, node operators must receive a minimum threshold of token delegations, ensuring sufficient skin in the game for network success and security. Delegations can be made directly to a node operator’s address or to any valid space address within the network. Spaces can then redirect received delegated tokens to specific node operators, offering flexibility in delegation strategies. Beyond delegation and network operations, Towns tokens play a key role in governance within the Towns DAO, enabling holders to influence the direction and policies of the organization.
Regarding inflation, the Towns token features an initial annual inflation rate of 8%, linearly decreasing over 20 years until it reaches a final rate of 2%. Inflation rewards are distributed evenly every two weeks (biweekly cycle) to all active node operators. Thus, the amount distributed per cycle follows this formula: (annual inflation rate / 26).
For reward distribution fees, each node operator may set their own service fee percentage. This fee is deducted from the total inflation reward allocated to the node operator. After deduction, the remaining rewards are distributed proportionally among the delegators to that node operator. Towns will also open up staking functionality in the future.
Currently, Towns has not announced any details regarding airdrops.
Summary
The CEO of Towns Protocol is Ben Rubin, an experienced entrepreneur and co-founder and former CEO of the popular video social app Houseparty and live-streaming app Meerkat.
(Rubin in the center)
Rubin is renowned for his achievements in building innovative online communities and real-time communication tools, with a career focused on enhancing user connection and interaction through technology.
According to official figures, Towns currently has nearly 1 million members, with over $500,000 in spending generated through conversations in Spaces. Protocol revenue has been steadily growing since the beginning of this year.
The Web3 social sector has seen countless protocols rise and fall—launching with bold promises of disruption, only to fade quickly due to technical bottlenecks, user attrition, or closed ecosystems. Amid a prolonged crypto downturn, attracting users to create and join group chats—and keeping them engaged—remains a pressing challenge for every social protocol.
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