The crash of FTX has created a lot of uncertainty in the market. That’s how it went around social media last week Which wrapped ethereum tokens were not safebut it turns out that this is no more than a joke. Unfortunately, it didn’t go over well with many people.
wETH bank run was a joke
The joke was about wrapped ether (wETH), which would no longer be worth the same as it used to be. That would be because Ethereum is now a Proof-of-Stake network (PoS), making the issuance of ETH tokens much lower than before. The wETH coins would therefore be different from the rest of the coins on the new network. This would lead to a ‘bankruptcy’ of wETH, causing the tokens to fall sharply in value against regular ETH coins and a cause crypto bank run.
Thankfully, this is nothing more than a joke, though it hasn’t gone down very well in the community. Ethereum developer cygaar was one of the pranksters, stating that he is reluctant to give anyone with wETH a bailout would give to save the community from destruction. Immediately afterwards he concluded that it was nonsense and that he just wanted to see who would respond.
This is a shit post.
— cygar (@0xCygar) November 26, 2022
Ethereum educator sassal played the same prank. So the scare tactics are baseless and according to the researchers you will always be able to sell your wETH for exactly the same amount of regular ETH.
Reading the replies I feel like I should clarify
This is a shitpost/meme – there is nothing wrong with WETH and you can always redeem 1 ETH for 1 WETH
Though if you don’t believe me I’ll buy all of your WETH right now for 0.3 ETH
Sell me all you want
Then fuck off
— sassal.eth 🦇🔊 (@sassal0x) November 27, 2022
Solana: Joke with a grain of truth
It should be emphasized that wrapped tokens were exactly the problem with Solana earlier this month. Some DeFi platforms on Solana took it very hard when FTX collapsed, because Alameda Research, affiliated with FTX, was an important market maker for these platforms.
After the transaction volume dropped by 85%, you could buy BTC on these Solana platforms for USD 1950, while the Bitcoin price was at USD 16,500 at the time. Of course it is now about ether and not about bitcoin, but the principle is about the same. It will just depend from which network you usebecause this has happened before with wrapped bitcoin.
