Thread by @0xCygaar

Fun fact: WETH cannot ever go insolvent. Your WETH will always be swappable 1:1 with ETH.

The code and logic is quite simple. In fact, it only takes 60 lines of code to implement.

Here's a simple primer on how WETH works 🧵:

Before getting started, let's go over some basics. WETH is an ERC20 token (

https://twitter.com/0xCygaar/status/1587606610062426112

). This means the logic for WETH is contained in a simple smart contract on the Ethereum blockchain. WETH wraps 1:1 over ETH and allows you to more easily use ETH in various dApps.

You can find the token contract for WETH here: etherscan.io/address/0xc02a….

Notice the balance mapping on line 32, this is the mapping that stores how much WETH every user has.

Let's look at the core functions: deposit, withdraw, and transferFrom.

The deposit function (line 38) is quite simple. You get as much WETH as the ETH you're depositing. On line 39, the balance of the user is increased by how much ETH they sent in the transaction.

Withdraw (line 42) is also pretty simple. The contract first makes sure your balance is less than or equal to the withdrawal amount. After that, it decreases the user's WETH balance and sends that amount of ETH back to the user.

TransferFrom (L63) is pretty similar. It first checks that the user has sufficient WETH to transfer. It then does an approval check (L69-72) if someone other than the user is transferring. Finally, the balances of the source and destination accounts are adjusted.

As we can see here, it's not possible to have more/less ETH in the contract than was deposited. The code dictates that whatever ETH you've deposited into the contract will be available to withdraw. If you see any comments of WETH insolvency, you can safely ignore them.