Bitcoin bull Some people, like Gnosis co-founder Martin Köppelmann and Ethereum developer Anthony Sassano, clarified in retrospect that the Wrapped Ethereum (wETH) FUD was an inside joke.
What are false rumors circulating about ETH?
Influencers had to clarify that a “shitpost” regarding the “insolvency” of Wrapped Ethereum (wETH) over the weekend was just that since some members of the community believed it.
Around November 26th, false rumors began circulating, claiming ETH isn’t backed 1:1 by Ether (ETH) and is, therefore, insolvent, a phenomenon known as FUD (fear, uncertainty, and doubt).
First to share the joke was “cygaar,” a blockchain developer and contributor to the ERC-721A token standard, who later revealed it was a “shitpost” to gauge his audience.
Read more: ETH Investors Beware Of These Mixed Signal
This is really a test to see who’s been reading my content.
— cygaar (@0xCygaar) November 26, 2022
Only yesterday, cygaar tweeted, “WETH cannot ever go insolvent” and “WETH will always be swappable 1:1 with ETH.”
Anthony Sassano, the presenter of The Daily Gwei and an Ethereum bull, too participated in the wETH joke on November 27 with his parody post. Still, after reading the responses, he had to clarify that the initial post was a “shitpost/ meme.”
A person I have known for more than ten years, who I consider trustworthy, is convinced that WETH will depeg and experience a total collapse. I don’t know anything concrete, but if I were exposed, I would be concerned.
— sassal.eth 🦇🔊 (@sassal0x) November 27, 2022
Martin Köppelmann, the co-founder of Gnosis, also joined in on the joke, tweeting to his 38,800 followers on November 27 that wETH is no longer fully backed by ETH and that “we might see a bank run on redeeming WETH soon.”
He then linked to a thread that explained the joke for those who weren’t in on it and stated he hoped the prank “did not cause too much misunderstanding.”
I hope this joke did not caused too much confusion. If you need more context find it here:https://t.co/KDN3NvdO2z
— Martin Köppelmann 🇺🇦 (@koeppelmann) November 27, 2022
Cointelegraph spoke with Markus Thielen, head of research at crypto financial services platform Matrixport, who echoed the sentiment that the WETH “shitposts” are largely unfounded.
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He elaborated that wETH is decentralized since smart contracts automate its logic.
Is Smart code publicly available?
“I am not too concerned about WETH, given it’s a smart contract and not stored by a centralized exchange. Since the smart contract’s code is publicly available, it may be scrutinized for errors.
On the other hand, recent FUD against Wrapped Bitcoin (BTC) could be valid, added Thielen, referring to allegations that FTX may have manufactured 100,000 BTC out of thin air, given FTX’s November 11 bankruptcy filing does not reflect any BTC on FTX’s balance sheet.
“WBTC is fundamentally different, and here the fears are valid,” Thielen added.
The goal of wETH, a wrapped version of ETH pegged at a 1:1 ratio, is to make exchanging ERC-20 tokens on Ethereum-compatible blockchains simpler.
wETH was introduced as an ERC-20 token on the Ethereum network for this purpose, as ETH follows different regulations and hence cannot be directly traded with ERC-20 tokens.
What’s Dankrad’s feist tweeted?
Despite the humorous intent behind the jokes, on November 27, “Dankrad Feist” tweeted to his 15,500 followers that the comments should be identified “more explicitly as jokes” because “it may not be obvious to outsiders.”
A lot of people making jokes about WETH.
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.
— Dankrad Feist (@dankrad) November 27, 2022
According to information from Coinmarketcap, the current price of wETH is $1,196, with a ratio of 0.999:1 to ETH.