The Houseparty Guy Got Burned Twice. Now He Wants You to Own the Group Chat.

Ben Rubin has a strange resume for a crypto founder: two consumer social apps that millions of people loved and neither of which exists anymore. Meerkat, the live-streaming app that briefly owned South by Southwest in 2015, got squeezed out when Twitter cut off its access to the social graph. Houseparty, the group video app he built next, sold to Epic Games in 2019 and was quietly shut down a few years later. Both times, the thing that killed the product was not the product. It was that someone else owned the ground it stood on.

Towns Labs is Rubin's response to that pattern. The New York company - about 16 people - builds Towns Protocol, an open, encrypted messaging network where online communities own the spaces they gather in instead of renting them from a platform that can change the rules or turn off the lights. If Discord is an apartment you can be evicted from, Towns wants to be the deed.

What Towns actually is

Strip away the token talk and Towns looks familiar. You make a group chat. You invite people. You set channels, roles, and rules. The interface is close enough to Discord that anyone who has run a community will recognize it in a minute. The difference is underneath. Each community on Towns is a "Space" - and a Space is not a row in a company's database. It is an object that lives onchain, with an owner, a membership list, and rules written into smart contracts rather than a Terms of Service page.

Those Spaces run on a purpose-built stack. Towns operates an EVM-compatible Layer 2 chain and a network of off-chain "stream nodes" that carry the actual messages, with the ownership and permission logic settled on Base, Coinbase's Ethereum Layer 2. Messages are end-to-end encrypted. The nodes are run by independent operators who get paid for keeping the network alive. The point of all that plumbing is a single, unglamorous goal: make a decentralized chat feel as fast as a centralized one, so that "you own it" does not come with a tax of lag and friction.

Who it's for

Towns is aimed at the people who already do the unpaid, thankless work of running online communities - creators, DAO organizers, trading and crypto groups, and the developers who build tools for all of them. For a community owner, the pitch is control and money: gate access with a token or an NFT, charge a paid "Membership" that renews onchain, and keep the relationship with your members even if you decide to move to a different app built on the same protocol.

For developers, the pitch is subtraction. Towns handles the networking, cryptography, and economic settlement so that a builder shipping a messaging app or a bot does not have to rebuild node coordination, membership verification, or a payment system from scratch. The protocol is open-source on GitHub, and anyone can build a client - a design choice that already has third-party apps living on top of the network.

The problem it's really solving

The honest version of the Towns thesis is not "blockchain good." It is a specific complaint about platform risk. When a creator builds an audience inside Discord or X, that audience is a permission the platform grants and can revoke. Accounts get banned, APIs get closed, features get walled behind a paywall, and the community that took years to assemble can evaporate in an afternoon. Rubin has lived the worst-case version of this twice.

Towns tries to move the valuable part - the membership, the graph of who belongs to what - out of any single company's control and into an open network. That is also the reason the company is structured the way it is. It is worth understanding, because it is the most unusual thing about the business.

There are three entities. Towns Labs is the for-profit developer company - the one that writes the code and ships the consumer Towns app. Towns Protocol is the open network itself, stewarded by a Swiss non-profit association. And the $TOWNS token and its treasury are governed by holders. The arrangement is deliberate: it is meant to make it structurally difficult for any one party - including Rubin - to unilaterally shut the thing down. For a founder whose last two companies died at someone else's discretion, that is not a legal footnote. It is the whole point.

The money, and where it comes from

Towns Labs has raised roughly $59 million. The 2023 Series A was $25.5 million led by a16z crypto, with Benchmark and Framework Ventures. A strategic round followed, and in April 2025 the company closed a $10 million Series B, again led by a16z crypto, with Coinbase Ventures joining and Benchmark staying in. Three blue-chip funds writing repeat checks for messaging infrastructure that no company fully owns is its own kind of signal.

The business model rides on top of the protocol. Paid Memberships generate protocol fees denominated in the token; free Spaces cost nothing. Node operators earn rewards for running the network. Towns Labs itself is funded by a mix of venture capital and the community treasury. Reported annual revenue is still modest - in the neighborhood of $1 million - which tells you this is an infrastructure bet in an early inning, not a cash machine.

A token with an unusual cap table

On August 5, 2025, the $TOWNS token went live, launching via airdrop and listing on Binance and Gate with an initial supply of about 10.1 billion. The token is used to stake to Spaces, reward the operators who run stream nodes, and vote on protocol governance. What stands out is the allocation. In an industry with a long history of insiders holding the majority and dumping on latecomers, Towns put the community and ecosystem ahead of the founders and funds.

You can read that number two ways. Optimistically, it is the marketing - the cap table itself is the argument that this network belongs to its users. Skeptically, generous community allocations are also how you bootstrap a network that has no users yet. Towns is betting the first reading turns into the second: give the supply away, and the people who receive it have a reason to stay and build.

How it's different from the competition

The obvious comparison set is the incumbents: Discord, Slack, Telegram, X. Towns does not out-feature them, and it is not trying to. Its wedge is ownership and monetization built in at the protocol layer rather than bolted on. The other comparison set is the growing field of decentralized social - Farcaster, Lens, XMTP, Nostr-based apps. Against those, Towns is less a broadcast feed and more a group-chat primitive, closer to a decentralized Discord than a decentralized Twitter.

That specificity is also the risk. Web3 social has a graveyard, and the headstones mostly read the same way: the ownership story was real, but not a strong enough reason for normal people to leave the app their friends already use. Towns' counter-argument is that its previous failures were about speed and product, not principle - hence the obsessive focus on making a decentralized chat feel ordinary. Whether "you own it" is a feature people will switch for is the open question the whole company is built around.

Where it fits

Towns sits at an intersection that did not really exist a few years ago: consumer messaging, developer infrastructure, and crypto rails, all in one stack. It competes for attention with centralized chat, for builders with other protocols, and for capital with every other web3 social project. Its advantage is a founder who has shipped social products at scale before and a set of backers - a16z, Coinbase, Benchmark - who keep re-upping. Its challenge is the one every ownership-first network faces: convincing people that control is worth the switch.

For now, the product is live, the token trades, the protocol is open, and the code is public. The next chapter is not about whether Towns can be built. It has been. It is about whether communities decide that owning the room is worth walking across the street for.