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An inside joke about the \u201cinsolvency\u201d of Wrapped Ether (wETH) over the weekend has forced influencers to explain it was just a \u201cshitpost\u201d after members of the community took it as real.\u00a0<\/p>\n
The wETH insolvency FUD (fear, uncertainty and doubt) seemingly began to make the rounds on Nov. 26, with false rumors alleging that wETH isn\u2019t backed 1:1 by Ether (ETH)<\/a>\u00a0and is insolvent. <\/p>\n Blockchain developer and contributor to the ERC-721A token standard cygaar was one of the first to spread the joke, before confirming in a subsequent post that it was in fact a \u201cshitpost\u201d to see who was reading his content. <\/p>\n This is really a test to see who\u2019s been reading my content.<\/p>\n \u2014 cygaar (@0xCygaar) November 26, 2022<\/a><\/p><\/blockquote>\n In fact, only a day before, cygaar tweeted<\/a> that \u201cWETH cannot ever go insolvent\u201d and that \u201cWETH will always be swappable 1:1 with ETH.\u201d<\/p>\n Ether bull and host of The Daily Gwei Anthony Sassano also joined in on the wETH joke with his own parody post on Nov. 27 but had to clarify later that the initial post was \u201cshitpost\/ meme\u201d after reading the replies. <\/p>\n Reading the replies I feel like I should clarify<\/p>\n This is a shitpost\/meme – there is nothing wrong with WETH and you can always redeem 1 ETH for 1 WETH<\/p>\n Though if you don’t believe me I’ll buy all of your WETH right now for 0.3 ETH<\/p>\n Sell me all you want<\/p>\n Then go fuck off<\/p>\n \u2014 sassal.eth (@sassal0x) November 27, 2022<\/a><\/p><\/blockquote>\n Gnosis co-founder Martin K\u00f6ppelmann was another one to get in on the joke, claiming in a Nov. 27 Tweet to his 38,800 Twitter followers that wETH is no longer fully backed by ETH and that \u201cwe might see a bank run on redeeming WETH soon.\u201d<\/p>\n Hours later, he said he hoped the joke \u201cdid not cause too much confusion,\u201d linking to a thread that explained the joke for those who weren\u2019t in the know. <\/p>\n I hope this joke did not caused too much confusion. If you need more context find it here:https:\/\/t.co\/KDN3NvdO2z<\/a><\/p>\n \u2014 Martin K\u00f6ppelmann (@koeppelmann) November 27, 2022<\/a><\/p><\/blockquote>\n Related: <\/em><\/strong>What is wrapped Ethereum (wETH) and how does it work?<\/em><\/strong><\/a><\/p>\n Speaking to Cointelegraph, Markus Thielen, the head of research at crypto financial services platform Matrixport, has also confirmed that there is little to no truth to the WETH \u201cshitposts.\u201d <\/p>\n wETH\u2019s logic is automated by smart contracts and it isn\u2019t controlled by a centralized entity, he explained: <\/p>\n \u201cI am not too concerned about WETH as it\u2019s a smart contract and not stored by a centralized exchange. Since the smart contract is open source, it can be checked for bugs or flaws.\u201d<\/p><\/blockquote>\n On the other hand, recent FUD against Wrapped Bitcoin (wBTC) could be warranted, said Thielen, referring to rumors that FTX may have printed 100,000 wBTC out of thin air, as FTX\u2019s Nov. 11 bankruptcy filing does not show<\/a> any Bitcoin (BTC<\/a>) on FTX\u2019s balance sheet.<\/p>\n \u201cWBTC is completely different and here the concerns are valid,\u201d Thielen explained.\u00a0<\/p>\n wETH is a wrapped version of ETH that is pegged at a 1:1 ratio, which aims to solve interoperability issues<\/a> on Ethereum-compatible blockchains by allowing for ERC-20 tokens to be exchanged more easily.<\/p>\n wETH was introduced as an ERC-20 token on the Ethereum network for this reason, as ETH follows different rules and thus cannot be directly traded with ERC-20 tokens.<\/p>\n Despite the lighthearted humor behind the jokes, Dankrad Feist suggested to his 15,500 Twitter followers in a Nov. 27 tweet that the comments should be marked \u201cmore clearly as jokes,\u201d as it \u201cmay not be obvious to outsiders.\u201d <\/p>\n A lot of people making jokes about WETH.<\/p>\n Please be aware it may not be obvious to outsiders that it’s completely different from bridged assets and there is literally almost zero risk. I think it would be better to mark these more clearly as jokes.<\/p>\n \u2014 Dankrad Feist (@dankrad) November 27, 2022<\/a><\/p><\/blockquote>\n\n
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