When OpenSilver application is published, by default the output files are compressed using gzip or brotli compression. However IIS needs to be configured via web.config to serve the compressed assets.

To verify if the application is using compression, check the Network tab in a browser's developer tools and make sure Content-Encoding is either br or gz.

Here is the case where the compression is not used.

For usual OpenSilver application the following web.config will work without any modifications.

<?xml version="1.0" encoding="UTF-8"?>
<configuration>
  <system.webServer>
    <staticContent>
      <remove fileExtension=".dll" />
      <remove fileExtension=".json" />
      <remove fileExtension=".woff" />
      <remove fileExtension=".woff2" />
      <remove fileExtension=".dat" />
      <remove fileExtension=".wasm" />
      <remove fileExtension=".blat" />
      <mimeMap fileExtension=".json" mimeType="application/json" />
      <mimeMap fileExtension=".woff" mimeType="font/woff" />
      <mimeMap fileExtension=".woff2" mimeType="font/woff2" />
      <mimeMap fileExtension=".dat" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".dll" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".wasm" mimeType="application/wasm" />
      <mimeMap fileExtension=".blat" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".js.gz" mimeType="application/javascript" />
      <mimeMap fileExtension=".dat.gz" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".dll.gz" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".json.gz" mimeType="application/json" />
      <mimeMap fileExtension=".wasm.gz" mimeType="application/wasm" />
      <mimeMap fileExtension=".blat.gz" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".html.gz" mimeType="text/html" />
      <mimeMap fileExtension=".css.gz" mimeType="text/css" />
      <mimeMap fileExtension=".ico.gz" mimeType="image/x-icon" />
      <mimeMap fileExtension=".svg.gz" mimeType="image/svg+xml" />
      <mimeMap fileExtension=".js.br" mimeType="application/javascript" />
      <mimeMap fileExtension=".dat.br" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".dll.br" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".json.br" mimeType="application/json" />
      <mimeMap fileExtension=".wasm.br" mimeType="application/wasm" />
      <mimeMap fileExtension=".blat.br" mimeType="application/octet-stream" />
      <mimeMap fileExtension=".html.br" mimeType="text/html" />
      <mimeMap fileExtension=".css.br" mimeType="text/css" />
      <mimeMap fileExtension=".ico.br" mimeType="image/x-icon" />
      <mimeMap fileExtension=".svg.br" mimeType="image/svg+xml" />
    </staticContent>
    <httpCompression>
      <dynamicTypes>
        <remove mimeType="text/*" />
        <remove mimeType="application/javascript" />
        <remove mimeType="image/svg+xml" />
      </dynamicTypes>
      <staticTypes>
        <remove mimeType="text/*" />
        <remove mimeType="application/javascript" />
        <remove mimeType="image/svg+xml" />
      </staticTypes>
    </httpCompression>
    <rewrite>
      <outboundRules rewriteBeforeCache="true">
        <rule name="Add Vary Accept-Encoding" preCondition="PreCompressedFile" enabled="true">
          <match serverVariable="RESPONSE_Vary" pattern=".*" />
          <action type="Rewrite" value="Accept-Encoding" />
        </rule>
        <rule name="Add Encoding Brotli" preCondition="PreCompressedBrotli" enabled="true" stopProcessing="true">
          <match serverVariable="RESPONSE_Content_Encoding" pattern=".*" />
          <action type="Rewrite" value="br" />
        </rule>
        <rule name="Add Encoding Gzip" preCondition="PreCompressedGzip" enabled="true" stopProcessing="true">
          <match serverVariable="RESPONSE_Content_Encoding" pattern=".*" />
          <action type="Rewrite" value="gzip" />
        </rule>
        <preConditions>
          <preCondition name="PreCompressedFile">
            <add input="{HTTP_URL}" pattern="\.(gz|br)$" />
          </preCondition>
            <preCondition name="PreCompressedBrotli">
            <add input="{HTTP_URL}" pattern="\.br$" />
          </preCondition>
          <preCondition name="PreCompressedGzip">
            <add input="{HTTP_URL}" pattern="\.gz$" />
          </preCondition>
        </preConditions>
      </outboundRules>
      <rules>
        <rule name="Serve subdir">
          <match url=".*" />
          <action type="Rewrite" url="wwwroot\{R:0}" />
        </rule>
        <rule name="Rewrite brotli file" stopProcessing="true">
          <match url="(.*)"/>
          <conditions>
            <add input="{HTTP_ACCEPT_ENCODING}" pattern="br" />
            <add input="{REQUEST_FILENAME}" pattern="\.(js|dat|dll|json|wasm|blat|htm|html|css|ico|svg)$" />
            <add input="{REQUEST_FILENAME}.br" matchType="IsFile" />
          </conditions>
          <action type="Rewrite" url="{R:1}.br" />
        </rule>
        <rule name="Rewrite gzip file" stopProcessing="true">
          <match url="(.*)"/>
          <conditions>
            <add input="{HTTP_ACCEPT_ENCODING}" pattern="gzip" />
            <add input="{REQUEST_FILENAME}" pattern="\.(js|dat|dll|json|wasm|blat|htm|html|css|ico|svg)$" />
            <add input="{REQUEST_FILENAME}.gz" matchType="IsFile" />
          </conditions>
          <action type="Rewrite" url="{R:1}.gz" />
        </rule>
        <rule name="SPA fallback routing" stopProcessing="true">
          <match url=".*" />
          <conditions logicalGrouping="MatchAll">
            <add input="{REQUEST_FILENAME}" matchType="IsFile" negate="true" />
          </conditions>
          <action type="Rewrite" url="wwwroot\" />
        </rule>
      </rules>
    </rewrite>
  </system.webServer>
</configuration>

Here is a more detailed explanation How to Host and deploy ASP.NET Core Blazor WebAssembly

Make sure compression is enabled from IIS

Double click on compression in IIS.

Make sure both dynamic and static content compressions are enabled.

If one of them is disabled it needs to be enabled from "Turn Windows features on or off".