Coinbase, A16Z Lead $10M Round for Towns Protocol

Coinbase Ventures and Andreessen Horowitz (a16z) have co-led a $10 million funding round for Towns Protocol.

Towns protocol presents itself as the web3 version of web2 applications like Discord, Slack, X but distincts by providing a decentralised control.

As a decentralized communication platform aiming to reshape how online communities interact and govern themselves in the Web3 era, the protocol announced its funding on Thursday.

The round also saw participation from Union Square Ventures, Kindred Ventures, Seed Club Ventures, and others. This signals a strong institutional interest in building the next generation of online communities beyond traditional platforms like Discord and Telegram.

Notably, the investment marks a major vote of confidence in on-chain messaging infrastructure and the broader decentralized social stack.

Here’s Why

What Is Towns Protocol

Towns Protocol, founded in 2022 by Ben Rubin, is a Web3-native communication protocol designed to bring group chats, online communities, and social interactions fully on-chain.

Built with decentralization and composability at its core, Towns aims to give users total control over their community’s structure, data, and rules.

Each “town” represents a group or community space that lives entirely on-chain. Unlike centralized messaging platforms, these towns are governed by smart contracts, allowing for programmable rules around membership, moderation, and even revenue sharing.

The project wants to make group communication a first-class citizen in Web3, alongside identity, finance, and governance.

Excited to share our latest funding round, led by @a16zcrypto, with the addition of new investor @cbventures and continued support from @benchmark.

The future of communication is onchain. pic.twitter.com/qGQUa9cvaE

— Towns Protocol (@TownsProtocol) April 10, 2025

Why Coinbase and a16z Are Interested

The decision by Coinbase and a16z to back Towns reflects a growing conviction among investors that decentralized communication is the next major layer of the crypto stack.

After years of innovation in DeFi, infrastructure, and gaming, attention is now turning to how communities interact, organize, and scale in trustless environments.

Coinbase Ventures, which has also invested in Web3 identity projects and DAOs, views Towns as part of the essential toolkit for making crypto communities more resilient, secure, and autonomous.

The investment further aligns with Coinbase’s broader goal of supporting user-controlled, censorship-resistant ecosystems.

Interestingly, in a recent instance, the VC Ventures parent exchange firm, Coinbase provided blueprint for US SEC on digital assets regulation.

Can Towns Provide the Decentralized Communication in web3

While existing platforms like Discord have been widely adopted by crypto communities, they come with significant downsides — including centralized control, data vulnerability, spam attacks, and lack of native crypto integration.

Towns aims to solve this by:

• Allowing communities to vote on membership, permissions, and rule changes.

• It has enabled wallet-native access with which entry to chats can be gated via tokens, NFTs, or verified identities.

• It allows developers to build apps and bots that plug directly into towns.

• Users and communities own their messages, content, and interactions.

This approach appeals especially to DAOs, NFT projects, and Layer 2 ecosystems looking for customizable, secure communication tools that can evolve with their needs.

Notably, Towns also recently made Trading live on Towns – allowing users to trade any Solana or Base token directly in their respective town.
According to an X post by its founder, Ben Rubin, its transactions volume has already surpassed $3.5 million with $540,000 in fees collected from over 1 million members.

What’s Next for Towns?

The Towns Protocol team plans to use the $10 million to expand engineering and developer support, improve protocol scalability, and launch a public beta later this year.

It is also working to open-source key components of the stack and enable easy integration with other Web3 apps and wallets.

Long-term, the project hopes to become a core social layer for decentralized applications, functioning much like Ethereum did for programmable money — but for programmable community interaction.

Disclaimer: The content may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.