A simple mistake cost a trader $500,000, sparking intense debate in the Ethereum community about 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 an ETH contract to WETH and retrieved WETH (after some googling I found that this is how the contract works). Let’s say it works the same in reverse and returns WETH to the contract. No return ETH. Apparently you have to use an interface to recover ETH. 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 a veteran, he bought/mined these coins back when they were cheap. It held out for years, through all the peaks and crashes, just to be able to 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 anytime soon”
Several members of the Ethereum community have sounded the alarm over this error. Many have suggested that the risk of mistakes like these will make it more difficult 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 solution to the problem. Some have suggested that wallets should prohibit transfers to the address in question or at least warn users.
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 the network participants decide to undo this 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 has divided the community, which is why it probably won’t happen any time soon. Moreover, it also split Ethereum, as users who disagreed with this decision 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 purchase 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 may soon become obsolete, as Ethereum developers are working to make ETH compliant with the ERC-20 standard. This change would eliminate the risk of error that cost the trader half a million ETH.
