Consider the Towns Protocol (TOWNS), an on-chain community platform from the founder of Houseparty, which has already facilitated over $35 million in revenue for creators. The protocol's core investment thesis lies in its "real yield" model, where it takes a 10% fee on all transactions. A significant portion of this revenue is then used to buy and burn the TOWNS token from the open market, directly linking platform success to token value. This creates a deflationary mechanism that benefits token holders as platform usage grows. A key future catalyst is the platform's expansion from crypto-native groups into mainstream hobbies like sneaker and watch trading communities.

Towns Protocol (TOWNS)

• Towns is a protocol for creating exclusive, on-chain group chats where creators can sell memberships. The founder is Ben Rubin, who previously co-founded successful apps like Meerkat and Houseparty (which was sold to Epic Games).
• The platform aims to solve the problem of trust and transparency in paid online communities by putting key functions on the blockchain.
• All memberships, subscriptions, and the group's treasury are on-chain (specifically on the Base network), making them verifiable and auditable by community members.
• Users can pay for memberships with a credit card or a crypto wallet, making it accessible to a non-crypto native audience.
• The platform has significant early traction, with group chats generating over $35 million in revenue in its first 10 months. A Dune dashboard mentioned in the podcast shows a volume of 9,328 ETH.
• One successful group, AX1 Board, charges a 1 ETH membership fee and has 320 members, generating over $1 million in revenue for that single group.

Takeaways

• Strong Founder Track Record: The founder, Ben Rubin, has a history of building products with massive user adoption (Houseparty had 150 million users), which adds significant credibility to this new venture.
• Clear Revenue Model & Token Value: The protocol earns a 10% fee on all membership payments. A significant portion of this fee (75% is the stated goal) is used to buy and burn the TOWNS token from the open market. This creates a direct link between platform growth and deflationary pressure on the token, which can be bullish for the token's price.
• Proven Product-Market Fit: With over $35 million in revenue generated for creators, the protocol has demonstrated a clear demand for its service, especially within crypto-native communities. The founder states they are only a 10x in volume away from the protocol being fully sustainable and deflationary.
• Competitive Landscape: The founder identifies Whop and Telegram as major competitors. He acknowledges that while Towns is currently superior for group creators (due to on-chain tools), it needs to improve its feature set for group participants to catch up with incumbents like Telegram.
• Growth Catalyst: The key to future growth is expanding beyond crypto communities into mainstream hobbies like sneaker groups and watch traders. Success in these markets would be a major catalyst for the platform and the TOWNS token.

Investment Themes

• On-Chain Social & Community Platforms: The discussion highlights a growing trend of building social applications with integrated crypto-native features. The core idea is that on-chain transparency can build trust and create new economic models for creators and communities.
• Real Yield / Protocol Revenue: The Towns protocol is a prime example of a "real yield" crypto project. Its tokenomics are designed so that revenue generated by the platform (10% fee) is used to directly benefit token holders through a buy and burn mechanism, rather than just inflationary rewards.
• The Creator Economy: The podcast emphasizes empowering creators to monetize their audience directly. The platform provides the tools for creators to build exclusive communities and generate revenue, tapping into the larger trend of the creator economy. The on-chain aspect provides a level of trust that is often missing in traditional paid groups on platforms like Discord or Telegram.