In a now-deleted deleted profile, an anonymous Reddit user allegedly lost close to $500k on Sunday after sending wrapped Ether (wETH) directly into a wETH wrapping smart contract. wETH came into existence as a way for Ether (ETH) to conform to the ERC-20 token standard so that it can be traded directly with altcoins minted on the Ethereum blockchain.
To wrap Ether, users first send ETH to the wETH smart contract address and receive an equivalent token in return. However, to unwrap wETH, users must either swap for ETH on a decentralized exchange like Uniswap (UNI), or call the withdrawal function in the wETH smart contract. Instead, the anonymous Reddit user sent the wETH directly back into the wETH smart contract address in the hopes of receiving ETH back. Unfortunately for the use, this process is the equivalent of “token burning,” resulting in a irreversible loss of the trader’s crypto.
While the user’s identity is no longer available on Reddit, the transaction still appears on Etherscan, showing that 195.2 wETH ($501,358) was sent to the wETH smart at the time of publication contract and therefore lost forever. Most Reddit members were sympathetic with the trader, with u/0150r writing:
“Losing a half-million dollars worth of crypto by mistake is something that needs to be addressed before crypto can become mainstream. When it’s this easy to lose everything, there’s no way your grandma is going to be using it.”
However, others pointed out that the original poster should have done far more to research the technology before using it, with u/jadecrystal writing:
“No, you don’t need to design the technology, but if you don’t have a basic grasp of … a microwave oven, a car’s starter, engine, and steering column… or public key crypto and blockchain addresses, this is what happens.”