Exciting news in the Web3 world! Towns Protocol, a project focused on reinventing online communities for the decentralized web, has just secured a significant $10 million funding round co-led by some major players: Coinbase Ventures and Andreessen Horowitz (a16z).

Announced this Thursday, this funding will fuel their mission to revolutionize how online communities connect and self-govern in the evolving landscape of Web3.

The investment round also attracted notable participation from Union Square Ventures, Kindred Ventures, Seed Club Ventures, and several others. This strong backing from established institutions really highlights the growing belief in building the next generation of online communities, moving beyond the limitations of platforms we know like Discord and Telegram.

Importantly, this investment isn’t just about Towns; it’s a powerful endorsement for the entire concept of on-chain messaging infrastructure and the broader decentralized social movement taking shape.

Let’s dive into

What Is Towns Protocol

Simply put, Towns Protocol is a communication system built specifically for Web3, with the goal of bringing group chats, online communities, and social interactions directly onto the blockchain.

From the ground up, Towns is designed around the principles of decentralization and composability. Their aim? To hand users complete control over how their community is structured, the data it generates, and the rules that govern it.

Think of each “town” as a dedicated space for a group or community, but one that lives entirely on-chain. Unlike typical centralized messaging platforms, these towns are powered by smart contracts. This allows for programmable rules that can control everything from who gets to be a member and how moderation works, to even setting up systems for community revenue sharing.

Ultimately, the project envisions group communication becoming a fundamental element of Web3, right alongside key components like identity, finance, and decentralized 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

Coinbase and a16z’s decision to back Towns Protocol points to a growing belief among investors: decentralized communication is poised to be the next crucial layer in the crypto ecosystem.

After significant advancements in areas like DeFi, infrastructure, and gaming over the past few years, the focus is now shifting towards building better ways for communities to interact, organize, and scale within trustless environments.

Coinbase Ventures, who have a history of investing in Web3 identity solutions and DAOs, sees Towns as a vital piece of the puzzle, contributing to more robust, secure, and self-governing crypto communities.

This investment is also in line with Coinbase’s broader vision of promoting user-controlled and censorship-resistant ecosystems.

On a related note, it’s worth remembering that Coinbase, through its parent exchange firm VC Ventures, recently provided a regulatory blueprint for the US SEC regarding digital assets.

Can Towns Provide the Decentralized Communication in web3

While platforms like Discord have become popular within crypto communities, they do have notable drawbacks. These include centralized control, data security risks, issues with spam, and a lack of built-in crypto features.

Towns is designed to address these issues by:

• Giving communities the power to vote democratically on things like membership, permissions, and changes to the community rules.

• Integrating wallet-native access, allowing community entry to be controlled using tokens, NFTs, or verified digital identities.

• Providing developers with the ability to create apps and bots that can directly integrate and interact with towns.

• Ensuring that users and communities truly own their messages, content, and interactions within the platform.

This approach is particularly attractive to DAOs, NFT projects, and Layer 2 ecosystems that need communication tools which are not only customizable and secure but can also adapt and evolve alongside their growing needs.

What’s Next for Towns?

With this fresh $10 million in funding, the Towns Protocol team is focused on several key areas: expanding their engineering team and developer support resources, improving the protocol’s ability to handle increasing scale, and launching a public beta version later in the year.

They’re also committed to open-sourcing important parts of their technology and making it easy for Towns to integrate with other Web3 applications and wallets.

Looking ahead, the project’s ambition is to become a foundational social layer for decentralized applications. Think of it operating on the same fundamental level as Ethereum has for programmable money, but instead, focused on enabling 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.