Neutron Foundation Acquires 25% Stake in Confio to Improve CosmWasm Virtual Machine

According to Blockworks, the Neutron Foundation, which supports the Cosmos-based cross-chain smart contract platform Neutron, will acquire a 25% stake in Confio, the software development company behind CosmWasm, the default virtual machine in the Cosmos ecosystem. The acquisition aims to drive technological improvements to the CosmWasm virtual machine and enhance its performance, security, and interoperability. Confio, a German GmbH corporation, will sell 25% equity of its shares in this strategic investment. Avril Dutheil, a core contributor of Neutron, stated that the investment is being made by the Neutron Foundation in cash as part of its mandate to ensure the long-term growth and development of the network. It did not require a vote from NTRN token holders. The announcement of Neutron's acquisition of Confio comes just a day after other Cosmos chains, Osmosis and Umee, revealed that they would be merging, and only weeks after staking network Stride had shared plans that it wanted to become part of the Cosmos Hub. Dutheil believes that the Cosmos ecosystem is experiencing a period of consolidation, as it has grown far and wide, with perhaps not enough thought given to the cost of running a full app chain at scale, long term. He cites tokenomic inflation and poor user experiences as examples of repercussions of the current model. The Cosmos Hub community recently passed a proposal to limit ATOM inflation by adjusting the maximum inflation rate from 14% to 10%, which may encourage chains linked to the Cosmos Hub to reevaluate their tokenomics. Dutheil said that projects are looking to consolidate with partners that share their vision to pool resources and focus on deep integrations to take their projects to the next stages of growth and adoption.