Smart contract platforms incorporate programs that automatically execute predetermined actions when certain conditions are met. The automation and security they offer are of a higher level than traditional systems, which explains their central role in the development of DeFi and dApp. In fact, it would not be an exaggeration to claim that they are the key to blockchain progress.
Atom Accelerator DAO recently wrote that CosmWasm, a powerful smart contract platform and the only one in Cosmos, is being canceled. CosmWasm allows developers to write and launch smart contracts on blockchains based on the Cosmos SDK. It’s popular with developers, but apparently not with businesses, at least for now. Defunding is a fact, even though CosmWasm is probably the most used platform after Solidity. Its open licensing model has enabled its proliferation, benefiting a vast community.
Fundraising for CosmWasm is essential
CosmWasm is designed for interoperability and modularity, extending blockchain functionality by making it possible to create dApps and other blockchain solutions with dynamic logic. The unique properties of the Solidity programming language and EVM make unit testing in Solidity difficult, but testing in CosmWasm is easy and accessible. There is no way to migrate a project to another blockchain or compose between chains in Ethereum. CosmWasm provides this capability by leveraging the Cosmos SDK and IBC.
CosmWasm is deployed across multiple interconnected blockchains, reducing pressure on each, ensuring low fees and improving overall scalability. This benefits users as well as developers, enabling more efficient and cost-effective smart contract execution.
CosmWasm uses Rust, a secure and modern programming language suitable for developing smart contracts. Rust is also used outside of cryptocurrencies. Ethereum and Solana, the two largest smart contract platforms, are also taking advantage of this.
Atom Accelerator DAO cites an analysis of 15 blockchains over the past year, which reveals shocking statistics that fully justify disbelief in the defunding of CosmWasm. 5.2 million accounts interacted with 15,700 CosmWasm contracts deployed during this period, and these contracts generated $5.7 million in fees. Additionally, building apps on CosmWasm is much simpler than a full Cosmos SDK app chain. With its modular design and seamless integration with Cosmos SDK, the smart contracts platform has helped position the Cosmos ecosystem as a leader in decentralized and multi-chain applications.
Funder and developer positions
The Interchain Foundation (ICF), which funds CosmWasm via Confio, a platform developing CosmWasm since 2020, has undergone an organizational restructuring. As a result, this significantly reduced Confio’s funding for 2025. As Atom Accelerator DAO points out, this is a major blow to the infrastructure that powers an entire ecosystem and facilitates interoperability across chains. Specifically, the ICF funding awarded to Confio for 2025 represents 28% of the funding for 2024. Assuming the same cost levels, this would cover just over three months of service. Confio will continue security and platform upgrades until mid-2025, intending to extend that budget to six months one way or another.
The question of financing is not new. Confio announced that it was suspending operations due to a lack of funding in February 2023. The organization wrote that its team of developers and blockchain experts have not received funding for their work since October 2022 They contacted most CosmWasm-enabled channels and several major projects but failed to secure funding for general ecosystem services. They were advised to monetize CosmWasm, but found no way to charge a fee for source code or core library licenses “while remaining relevant.” At the time, they hoped to generate revenue through consulting work to build utilities on top of the CosmWasm stack. However, defunding is a fact.
With the belief that CosmWasm is an essential resource for the interchain and that its development should continue, Atom Accelerator DAO has offered to contribute $250,000 to a fundraising effort. Neutron’s initial commitment of the same amount kicked off the initiative. While half a million dollars is certainly a good start, the funding is not enough for the year because CosmWasm consists of modules, tools, libraries, and documentation spread across nearly two dozen repositories .
Implications of CosmWasm’s Silent Collapse and How to Avoid It
These developments call attention to a glaring problem in blockchain: entities want to benefit from the ease of use and security of decentralized protocols and smart contracts, but are not investing in them. It is impossible to overstate the benefits of smart contract applications. They increase efficiency, reduce counterparty risk, lower costs and improve transparency. CosmWasm addresses many security issues in Solidity, such as reentrancy attacks, a common DeFi exploit. It also allows for a more streamlined contract migration instead of adopting a proxy model and removes several language elements, which were often misused, such as tx.origin for security reasons.
Confio writes that CosmWasm’s needs have grown along with the number of users and the ecosystem, concluding that the platform has become too big and they “can no longer afford to subsidize it.” The solution is in the hands of individuals and organizations with a vested interest in the growth and success of blockchain technology. Venture capitalists are expected to get a return on their investment as smart contract platforms form the backbone of DeFi. Tech companies and blockchain startups are using smart contracts for their products and creating complementary technologies, like layer 2 solutions or dApps. Finally, financial institutions are using smart contracts to automate financial transactions, reduce costs and increase transparency. The blockchain world can only hope that they will intervene at this critical moment.
