Benzinga - Speculations regarding Wrapped Ethereum (CRYPTO: WETH) being ‘insolvent’ are making the rounds on Twitter after an apparent "joke" was taken seriously by members of the community.
What Happened: Rumors that WETH was not 1:1 backed by Ethereum (CRYPTO: ETH) and was insolvent began spreading on Saturday, creating fear, uncertainty and doubt among investors.
It all started when blockchain and ERC-721A developer ‘cygaar’ took to Twitter to announce that WETH would soon be insolvent. Later, the developer called the post a meme and not to be taken seriously.
ATTENTION: WETH is about to be insolvent.Ethereum bull and host of The Daily Gwei Anthony Sassano joined in on the WETH joke with his own parody post, but he later had to clarify that the post was a “meme” after reading the responses.I will begrudgingly bail out anyone holding WETH at a rate of 0.5 ETH per WETH in order to save this space. You can thank me once the crisis has been adverted.
— cygaar (@0xCygaar) November 26, 2022
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Justin Sun, co-founder of Tron (CRYPTO:TRN) also jumped in, stating that as a humble member of the crypto industry, he will discuss with Ethereum co-founder Vitalik Buterin to invest $2 billion to aid Wrapped Ethereum Foundation (WEF).
Crypto Youtuber Richard Heart pointed out to Sun’s tweet that “joking about things that could get the silliest of users rekt isn’t funny.”
To be clear, it's a joke and WETH is not depegging from ETH. It would be extremely extremely hard for it to do so. That being said, vitalik and the majority of ETH holders choose to idle in ETH not WETH. Ever so slightly less risk with slightly more defi costs.Wrapped Ethereum is a smart contract that accepts ETH and gives back an ERC-20 token called “WETH,” a wrapped version of ETH pegged at a 1:1 ratio. It aims to solve interoperability issues on Ethereum-compatible blockchains by allowing ERC-20 tokens to be exchanged more easily.— Richard Heart (@RichardHeartWin) November 28, 2022
Price Action: At the time of writing, WETH was trading at $1171, down 3.67% in the last 24 hours, according to Benzinga Pro.
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