One simple mistake cost a trader $500,000, sparking intense debate in the Ethereum community over security and user experience.
To Lose $500K Worth of WETH
A post titled “Did I just lose half a million dollars by sending WETH to WETH’s contract address?” made its way to the top of r/ethereum.
“Sent ETH to WETH contract and got WETH back (after some googling I found this is how the contract works). Assumed it works the same way backwards and sent WETH back to the contract. No ETH back. Apparently you have to use a frontend to get the ETH back. ETH lost forever.”
Although the post was deleted, some of the replies from the trader and other users gave insights into his profile.
“I checked OP’s history and he’s an old timer, he bought/mined those coins back when they were cheap. He held for years, through all the peaks and crashes, just so he could lose it all like this. Brutal.”
Some people also noted that on-chain data shows that 265 people in total made the same mistake. Still, most lost rather small amounts.
‘Grandma Won’t Be Using ETH Any Time Soon’
Multiple members of the Ethereum community raised the alarm over the mistake. Many suggested that risks of errors like these will make it harder for the network to grow.
“When it’s this easy to lose everything, there’s no way your grandma is going to be using it,” one member said.
Others noted that the community should come together to create a fix for the problem. Some suggested that wallets should ban transfers to the address in question or at least give users a warning.
The decentralized nature of the blockchain means that there is no way for people to get their money back after hacks or errors.
That is unless network participants decide to revert that transaction with a hard fork. This is what happened in the early days of Ethereum, after the infamous DAO hack.
Network validators, together with Ethereum developers, decided to revert the blockchain to a time before the hack. That way, they restored the $55 million to the DAO. Even the founder Vitalik Buterin supported the move.
The decision split the community, which is why it likely won’t happen any time soon. Moreover, it also split Ethereum, as users that disagreed with the move continued to use Ethereum Classic.
What is WETH?
But what is Wrapped Ethereum (WETH)? A wrapped version of any crypto is a token of that asset on other blockchains – for example, Wrapped Bitcoin (WBTC) on the Etherum blockchain.
WETH is a wrapped version of Ethereum for the Etherum blockchain. Traders typically use WETH to buy other tokens on decentralized exchanges.
ETH needs a wrapped version for its blockchain because it does not conform to its own ERC-20 standard for token exchange. Namely, ETH is older than the standard.
However, WETH could soon become obsolete, as Ethereum developers are working on making ETH compliant with the ERC-20 standard. This change would eliminate the risk of the error that cost the trader half a million in ETH.