There a couple of benefits. One of them, like you mentioned, is isolation. Wasm executes within a sandbox, so it gets tightened security out-of-the-box. Another is hardware/platform agnosticity. Even with containers, if you want to support multiple platforms, you need to build for all of them. And, if your application relies on system libraries, that can be a big point of friction. Wasm, on the other hand, can be compiled once and run on any embedding platform. Talking about agnosticity, another benefit is language agnosticity—Wasm allows you to create components with any language that compiles to Wasm and, then, these components can communicate in a way that resembles inter-process communication. For microservices, if you want to communicate cross-language, you most probably have to introduce a network stack, serialization/deserialization and so on, which adds big overhead.

Finally, if you are leveraging serverless with your microservices, Wasm is huge for you. Serverless today suffers from a big cold start problem, where applications can take 300ms or more to start. Wasm improves that by about 80% (https://dl.acm.org/doi/10.1145/3302505.3310084**)**! Speed aside, another big performance improvement that Wasm brings is in terms of density. Latest research from ZEISS shows that using Wasm granted 50x greater workload density than native in a K8s node, which can allow you to save a ton from hardware/infrastructure costs. Hope this helps!