What is Towns Protocol?

Image source: https://www.towns.com/

Towns Protocol is an open-source protocol purpose-built for developing decentralized, real-time messaging applications. Towns Protocol combines an EVM-compatible Layer 2 chain, stream nodes, and smart contracts deployed on the Base network. This combination bridges on-chain and off-chain communications. Users can create “Spaces” permissionlessly, each representing a programmable on-chain asset with robust features such as membership management, encrypted messaging, and a reputation system.

Key Features

• Dedicated social chain architecture: Leverages the Base chain’s read/write permissions framework to achieve high-speed message delivery akin to centralized social networks.
• Ownable Space assets: Creating a Space grants on-chain ownership, enabling self-governed rules through smart contracts.
• On-chain membership and monetization: Only users holding a Membership NFT can interact within a Space. The protocol supports flexible pricing structures and customizable fee allocation.
• End-to-end encryption and privacy: Messages are protected by end-to-end encryption, ensuring that only the sender and recipient can read content—no third parties, including node operators, have access.
• Extensible reputation system: Supports transparent, on-chain member evaluation mechanisms within each Space.

TOWNS Token Utilities and Economic Model

TOWNS is the native governance token of Towns Protocol, with several core utilities:

1. Node delegation and operator incentives: Users may delegate TOWNS tokens to node operators, who earn inflation rewards for maintaining operations. Delegators receive a proportional share of these rewards.
2. Space address authorization and feature unlocks: Holders can authorize tokens to specific Space addresses, unlocking additional features such as increased storage and customized onboarding logic.
3. Governance participation: TOWNS functions as a governance token, empowering holders to vote on proposals and influence protocol evolution.
4. TOWNS inflation model: The initial token supply is 10 billion. After the first year, the inflation rate is 8%, and it linearly decreases to 2% over the next 20 years.

DAO Governance and Community Vision

Towns Protocol’s governing entity, Towns Lodge, utilizes a DAO framework for protocol management. Space owners, node operators, and token holders all play active roles.

• Proposal and voting processes are executed via on-chain smart contracts. This guarantees transparent and open governance.
• Governance power is primarily determined by TOWNS holdings, with workflows that are automated, secure, and compliant.
• The stakeholder base includes developers, integrators, advisors, and general community members. This structure ensures a multidimensional approach to protocol growth.

Summary and Outlook

TOWNS is much more than a token. It serves as the backbone of a decentralized social protocol ecosystem. As demand for blockchain-based social platforms accelerates, Towns Protocol is notable for its commitment to user sovereignty, data privacy, and scalability, positioning it as a leader in the development of crypto-native social networks. Investors and developers can observe its node incentive mechanisms, extensible features, and opportunities for DAO-driven governance participation.

Towns (TOWNS) spot trading will launch on Gate on August 5, 2025, at 22:30 (UTC+8).