Towns Protocol is a decentralized communication infrastructure designed to empower developers to build real-time messaging applications without centralized intermediaries. Combining blockchain technology with decentralized networking, Towns offers a unique model for programmable, community-owned group chats called Spaces. These Spaces can integrate encryption, monetization, staking, and governance directly into their messaging environments.

Project Overview

The protocol is built on an EVM-compatible Layer 2 blockchain and supported by decentralized off-chain stream nodes for message delivery. It also features modular smart contracts deployed on Base, an Ethereum Layer 2 network. This architecture enables scalable, real-time communication while maintaining security and privacy through end-to-end encryption.

Towns Protocol was developed by the team behind the Towns application, founded by the creators of the social video app Houseparty, which was acquired by Epic Games. The project is backed by prominent investors including a16z crypto, Coinbase Ventures, and Benchmark.

Key Features of Towns Protocol

• Programmable Spaces: Each Space is owned and operated by its creator or community, with the ability to set custom rules, access requirements, and monetization models.
• On-Chain Governance: Spaces can integrate decision-making processes directly into their smart contracts, giving members voting power over rules and evolution.
• Staking Mechanisms: Users can stake $TOWNS to individual Spaces, potentially unlocking access, rewards, or governance privileges.
• Developer-Friendly Infrastructure: Supports customizable frontends, plugins, and moderation tools for tailored communication environments.
• End-to-End Encryption: Ensures that all communications remain private and secure.

Role of $TOWNS in the Ecosystem

The native token, $TOWNS, plays a central role in securing and powering the network:

• Network Security: Utilizes a Proof-of-Stake (PoS) consensus mechanism to maintain network integrity.
• Protocol Utility: Enables features like staking, access gating, governance, and monetization within Spaces.
• Governance Power: Grants token holders the ability to influence protocol upgrades and evolution.

Architecture and Functionality

The Towns Protocol operates through three main components:

• Layer 2 Blockchain: Executes smart contracts and records state changes efficiently.
• Decentralized Off-Chain Nodes: Transmit real-time encrypted messages between participants.
• Modular Smart Contracts: Provide programmable logic for Space creation, membership management, and governance tools.

What Sets Towns Apart

Unlike traditional social platforms, Towns does not control user data, monetization, or access. Instead, each Space is fully autonomous, allowing its operator to implement staking-based incentives, membership fees, or custom moderation rules.

This design introduces a novel participation model in which users can stake $TOWNS to a Space they support, earning rewards, gaining exclusive access, or participating in governance decisions specific to that Space.

Tokenomics

Towns Protocol launched with a total supply of 10 billion $TOWNS tokens, distributed as follows:

• 57% to the community for grants, airdrops, governance rewards, and ecosystem growth.
• 35% to team members and investors.
• 8% to node operators and delegators to bootstrap decentralized infrastructure.

Availability

$TOWNS is deployed on Ethereum and Base. It is available on select centralized and decentralized exchanges, and can also be earned by participating in Spaces, staking, or contributing to the protocol’s development.

Conclusion

Towns Protocol is pioneering a shift in how messaging platforms operate—placing ownership, control, and economic opportunities directly in the hands of communities. By integrating programmable logic, on-chain governance, and staking incentives into communication infrastructure, it opens the door to a new era of decentralized, user-owned social applications.