The wETH Insolvency FUD (Fear, Uncertainty, and Doubt) apparently started circulating on November 26.
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 making the rounds on Nov. 26, with false rumors alleging that wETH is not backed 1:1 by Ether (ETH) and therefore, it 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 “bullshit message” to see who was reading his contents.
In fact, just a day earlier, cygaar tweeted that “WETH can never file for insolvency” and that “WETH will always be 1:1 interchangeable with ETH.”
Who Was Behind the Prank
In addition to cygaar, Ethereum bull and The Daily Gwei host Anthony Sassano also joined in on the wETH prank with his own parody post on Nov. 27 but had to later clarify that the initial post was a “shit post/meme” after reading the responses.
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 might see a bank run on redeeming WETH soon.”
Hours later, he said he hoped the prank “didn’t cause too much confusion,” linking to a thread explaining the prank for those who weren’t in the know.
Reactions and Further Explanations by Experts
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”.
Thielen 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 shows no BTC on FTX balance.
“WBTC is completely different and here the concerns are valid,” Thielen explained.
Despite the light-hearted humor behind the jokes, “Dankrad Feist” suggested to his 15,500 Twitter followers in a November 27 tweet that “it would be better to mark these more clearly as jokes” as they “it may not be obvious to outsiders.”
wETH is currently priced at $1,196, at a current ratio of 0.999:1 to ETH, according to data from Coinmarketcap.
By Audy Castaneda