Coinbase, a16z Lead $10M Funding for Decentralized Communication Platform Towns Protocol

Coinbase Ventures and Andreessen Horowitz (a16z) have co-led a $10 million funding round for Towns Protocol, a decentralized communication platform designed to revolutionize how online communities interact and govern themselves in the Web3 era. The funding round, announced on Thursday, also included participation from Union Square Ventures, Kindred Ventures, Seed Club Ventures, and others. This significant investment underscores a growing institutional interest in developing the next generation of online communities beyond traditional platforms like Discord and Telegram.

The investment in Towns Protocol marks a major vote of confidence in on-chain messaging infrastructure and the broader decentralized social stack. Towns Protocol is a Web3-native communication protocol that aims to bring group chats, online communities, and social interactions fully on-chain. Built with decentralization and composability at its core, Towns Protocol gives users total control over their community’s structure, data, and rules. Each “town” represents a group or community space that lives entirely on-chain, governed by smart contracts, allowing for programmable rules around membership, moderation, and even 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 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 aligns with Coinbase’s broader goal of supporting user-controlled, censorship-resistant ecosystems.

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 these issues by allowing communities to vote on membership, permissions, and rule changes. It enables wallet-native access, where entry to chats can be gated via tokens, NFTs, or verified identities. Additionally, it allows developers to build apps and bots that plug directly into towns, ensuring that 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.

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. The team 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.