Much of crypto Twitter has become a hellish landscape of doom posting as those remaining bet on which institution is next to declare bankruptcy. Amidst the rubble of contagion and conspiracy theories emerges a new meme that makes light of all the chaos in the crypto industry. This meme claims that Wrapped Ether has depegged from ETH and that users need to sell their WETH while they can.
Before going further, there is nothing wrong with WETH. Please do not sell your WETH in a panic because you saw someone post about it depegging on Twitter.
So why are several prominent Twitter users adding to the chaos while the crypto industry burns? The origin comes from an authentic depegging event recently with Wrapped Bitcoin (WBTC).
FTX Collapse Kicks Off WBTC Depeg
The fear began during the wake of FTX’s collapse as many were reminded that FTX was one of the 18 signers of the multi-sig controlling the WBTC smart contract. This was further magnified by a Twitter user who posted citing data from a Dune dashboard that insinuated a discrepancy in the amount of Bitcoin backing WBTC. Of course, the party in question was Alameda Research, FTX’s now-defunct investment arm.
The comments made it clear that the original poster’s interpretation of the chart was incorrect, and nothing suspicious was revealed in that dashboard. However, the post went viral, and most people did not bother reading the comments for clarification. Instead, it was cited and retweeted enough to cause WBTC to further depeg, going down as -2% from parity with Bitcoin.
All fears were assuaged as BitGo, the custodian for WBTC, posted proof that revealed there is indeed one Bitcoin for every WBTC in circulation. The WBTC DAO then moved to remove FTX from the smart contract multi-sig. And WBTC quickly trended back towards parity with Bitcoin.
That was that until some Twitter users decided to poke fun at the whole sequence of events.
A Funny Meme or Harmful Joke?
Prominent crypto Twitter user and content maker sassal.eth kicked off the meme with a post” that read:
“A person I have known for more than ten years, who I consider trustworthy, is convinced that WETH will depeg and experience a total collapse. I don’t know anything concrete, but if I were exposed, I would be concerned.”
The post went viral, and others couldn’t help themselves from joining in on the fun. This includes the co-founder of Gnosis, claiming a bank run on WETH could happen soon. Even Justin Sun, the founder of the Tron blockchain, added by pledging billions to help restore the WETH peg.
Seeing how quickly the meme took off and some were taking it seriously, sassal. Eth posted a response indicating that the WETH depeg is a joke. And others have made it clear that while crypto insiders get the mark, outsiders could easily misconstrue it for the truth. They were particularly given the fresh depeg even with WBTC a few days prior.
As with anything in crypto, one can always verify that Ether fully backs WETH by going to Etherscan and looking at the contract. One can confirm that the circulating supply of WETh matches the amount of Ether locked in the contract. No need to trust anyone on Twitter.
