A bankruptcy prank for Wrapped Ethereum (WETH), the representation of the biggest altcoin Ethereum (ETH) on other networks, has the market worried. An inside joke about the “bankruptcy” of Wrapped Ethereum (wETH) was taken seriously by members of the community. The confusion forced influencers to make a statement. Here are the details…
Altcoin rumors stir things up
The Wrapped Ethereum (wETH) bankruptcy created a FUD. cryptocoin.com As we have previously reported, FUD; means fear, uncertainty and doubt. Apparently on November 26, rumors surfaced that wETH is not supported 1:1 by Ethereum (ETH). Then, claims that wETH was “bankrupt” began to circulate in the market. Blockchain developer and contributor to the ERC-721A token standard “cygaar” was one of the first to spread the joke. He then confirmed in a later post that this was actually a nonsense post to see who read its content.
In fact, just a day ago, cygaar said, “WETH can never go bankrupt.” He also tweeted that “WETH will always trade 1:1 for ETH”. Ethereum bull and host of The Daily Gwei, Anthony Sassano, also responded with his own parody post on Nov. Participated in the wETH prank. But he later had to explain that the first post was “shitpost” after reading the responses.
Martin Köppelmann, co-founder of Gnosis, also joined the joke. On November 27, he tweeted to his 38,800 Twitter followers that wETH is no longer fully supported by ETH. “We may see a bank start using WETH soon,” he added, adding to the joke. Hours later, he said he hoped the joke “didn’t cause too much confusion”. For those who don’t know, he explained the joke.
Is there any truth to this joke?
Markus Thielen, head of research at crypto financial services platform Matrixport, confirmed that the WETH “shitpost” is not genuine at all. “The logic of wETH is automated by smart contracts and not controlled by a central entity,” he said. He also used the following phrases:
I’m not too worried about WETH as it is a smart contract and not stored by a centralized exchange. Because the smart contract is open source, errors or flaws can be checked.
The situation is different for WBTC
On the other hand, he talked about FTX’s November 11 bankruptcy filing. The application did not show any BTC in FTX’s balance. As such, he referred to rumors that FTX may have minted 100,000 wBTC out of nothing. Thielen stated that the latest FUD against Wrapped Bitcoin (wBTC) is valid. “WBTC is completely different and the concerns are valid here,” Thielen said. WETH allows for easier exchange of ERC-20 tokens. It is a wrapped, “wrapped” version of ETH with a fixed 1:1 ratio aimed at solving interoperability issues on Ethereum compatible Blockchains.
This is why wETH was introduced on the Ethereum network as an ERC-20 token, as ETH follows different rules and therefore cannot be traded directly with ERC-20 tokens. Despite the jovial humor behind the jokes, “Dankrad Feist” told his 15,500 followers on Twitter on November 27 that the comments should “more clearly show that it’s a joke.” Because he stated that “the joke may not be understood by outsiders”. wETH is currently trading at $1,196 at a rate of 0.999:1 to ETH.
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