No, Wrapped Ethereum Isn’t In Trouble. Here’s Why

Over the weekend, fears circulated in the crypto community stemming from claims that Wrapped Ethereum tokens could be at risk of losing their 1:1 value against ETH. However, the claims are no more than elaborate jokes about recent contagion fears.

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Wrapped Ethereum Jokes

Crypto Twitter has been indulging in jokes about the state of Wrapped Ethereum for the last 24 hours, but not everyone is in on it.

Many prominent crypto community figures, including Hsaka, banteg, and CL, recently shared increasingly brazen claims about the Ethereum network’s Wrapped Ethereum token (wETH) somehow depegging or being exploited.

“wETH hack went unnoticed since 2019,” stated pseudonymous Yearn Finance lead developer banteg, “after investigating more than 90 million deposit and withdrawal events, I’ve found a supply discrepancy between the total supply wETH contract reports and the actual outstanding wETH.” He then posted: “It appears the contract holds 1 wei more than it owes. How is it possible?”

wETH is a token that aims to stay at 1:1 parity with ETH; it is used in many smart contracts and on non-Ethereum blockchains. As the token is widely used across various crypto ecosystems, it would be easy to believe that a failure would have catastrophic consequences for the crypto space.

At least one newspaper organization took the claims at face value. Bloomberg ran an article early this morning stating that crypto analysts were having “concerns” about Wrapped Ethereum. The article was quickly amended when crypto community members started sharing it around Twitter mockingly.

Understanding wETH

Wrapped Ethereum is not issued by a centralized party, like Circle or…