Crypto Twitter calls for calm after wETH insolvency joke goes viral

Kishore Hore

RIPPLE


An inside joke about Wrapped Ethereum (wETH) being “insolvent” over the weekend forced influencers to explain that it was just a “shitty message” after community members took it for real.

The wETH Insolvency FUD (Fear, Uncertainty, and Doubt) apparently began circulating on Nov. 26, with false rumors alleging that wETH is not backed 1:1 by Ether (ETH) and is insolvent.

Blockchain developer and ERC-721A standard token contributor “cygaar” was one of the first to spread the hoax, before confirming in a subsequent post that it was in fact a “shit message” to see who was reading his contents.

In fact, just a day before, cygaar tweeted that “WETH can never become insolvent” and that “WETH will always be 1:1 interchangeable with ETH.”

Ethereum bull and The Daily Gwei host Anthony Sassano also joined in on the wETH joke with his own parody post on Nov. 27, but had to later clarify that the initial post was a “shit/meme message” afterwards. to read the answers.

Gnosis co-founder Martin Köppelmann was another who joined in on the joke, claiming in a November 27 tweet to his 38,800 Twitter followers that wETH is no longer fully backed by ETH and that “we could see a run on the bank to redeem WETH soon”. .”

Hours later, he said he hoped the prank “wouldn’t cause too much confusion,” linking to a thread explaining the prank for those who weren’t in the know.

Related: What is Wrapped Ethereum (wETH) and how does it work?

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 WETH’s “shit messages.”

The wETH logic is automated by smart contracts and is not controlled by a centralized entity, he explained:

“I’m not too concerned about WETH as it is a smart contract and is not stored on a centralized exchange. Since the smart contract is open source, it can be checked for bugs or glitches.”

On the other hand, the recent FUD against Wrapped Bitcoin (wBTC) could be justified, Thielen said, referring to rumors that FTX may have printed 100,000 wBTC out of thin air, as FTX’s bankruptcy filing on November 11 does not show any BTC on FTX’s balance sheet.

“WBTC is completely different and here the concerns are valid,” Thielen explained.

wETH is a wrapped version of ETH that is pegged at a 1:1 ratio, which aims to solve interoperability issues in Ethereum-compatible blockchains by allowing ERC-20 tokens to be traded more easily.

wETH was introduced as an ERC-20 token on the Ethereum network for this reason, as ETH follows different rules and therefore cannot be directly exchanged with ERC-20 tokens.

Despite the light-hearted humor behind the jokes, “Dankrad Feist” suggested to his 15,500 Twitter followers in a November 27 tweet that the comments should be marked “more clearly as jokes” as they “may not be obvious to viewers.” strangers”.

wETH It is currently priced at $1,196, at a current ratio of 0.999:1 to ETH, according to data from Coinmarketcap.