Neutron to acquire 25% of CosmWasm developer Confio
Summary
The foundation supporting Cosmos-based cross-chain smart contract platform Neutron will acquire 25% of Confio, the software development company behind CosmWasm, the default virtual machine in the Cosmos ecosystem. Confio, a German GmbH corporation, will sell 25% equity of its shares in this strategic investment. Although Stride’s plans did not ultimately come to fruition, it is evident that there has been a growing uptick of mergers and acquisitions in the Cosmos ecosystem, which Dutheil believes is “a period of consolidation.” Dutheil notes that the Cosmos ecosystem 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 draws on examples of tokenomic inflation, where app chains pay for security provided by validators through token emissions, inflating the supply, and poor user experiences such as asynchrony and bridging, 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 take a fresh look at their tokenomics as well. Don’t miss the next big story – join our free daily newsletter.