I still don't get WETH. What is the purpose of exchanging ETH, which is a token on the Ethereum blockchain, for WETH, which is also a token on the Ethereum blockchain (with the same nominal value)?
Pretty soon you'll be able to get paid interest on your WETH in WTF. WTF is a meta token based on a smart contract token based on Ethereum. With WTF, you never need to worry about where your money is. You can be assured that 100% of the time you try to redeem it you will stare at your screen for hours going WHAT THE FUCK
Pure coincidence. I had written "wtf" in response to something else and it just sounded like a good coin name for a joke. I don't follow the latest in shitcoins. Not that I'm exactly surprised there's a token called WTF...
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After a while a standard api was invented for tokens that use smart contacts on ethereum. ETH predates these standards and is built in to the operation of the blockchain. Lots of smart contacts know how to deal with standard tokens but don't have a separate code path to deal with ETH. You can get a version of ETH that fits the interface by wrapping it in a standard token.
It is a tool to convert ETH into an erc-20 compatible token. ETH itself can only be spent by the private key, whereas users can grant contracts the permission to manage the user's WETH for them.
WETH is Wrapped Ether. It fulfills the conditions of an ERC-20 token, so other contracts always interact with WETH not ETH. Most of this is obfuscated away so that users don't have to have WETH in their wallet for transactions.
ERC-20 is a token standard [1] that lives on top of Ethereum blockchain. It defines the API that any contract running on ethereum must implement in order to be considered ERC-20 compatible - e.g., transfer(), approve(), and so on. This is what gives tokens composability, and allow DeFi applications to build on top of each other.
As ERC-20 runs on top of ETH, it requires gas (paid in ETH) to execute the contract. But ETH itself is not ERC-20 compatible (after all, it's just the base layer; there's no "ETH contract"), so some folks came up with the idea of wrapping ETH into an ERC-20-compatible contract, thus giving birth to WETH.
The advantage is that now ETH (in the form of WETH) can now provide interoperability with the rest of the standardized tokens, including staking, lending, or anything else implemented via a contract. Pure non-wrapped ETH would never give you that; basically you can send your ETH to someone, and that's it.
Now, the weak link is that you're relying on the trustworthiness and the quality of the implementation of the contract, which - more often than not - is questionable. The WETH contract itself is pretty simple, with only 62 lines of code [3]. But one may argue it's overly simplistic, and they failed to implement basic safeguards, like sending WETH to itself, which is what caused OP to lose half a million dollars.
The other side of the argument is that WETh contract was simple by design. Every line of code in Solidity requires gas to execute, so adding even a basic checking to protect against what OP did would have increased the cost by millions of dollars in aggregate fees for everyone else, besides potentially introducing the risk of attacks or additional bugs.
Given that only ~250 WETH transactions[4] (out of 5,562,041 total tx), made the mistake OP did, one could argue that the design wasn't that bad. That's a 99.9955% success rate.
(to be clear: if I were the original WETH developer, I would have added the checking, in spite of costing a few additional bucks for everyone else. But I understand why someone may have thought otherwise. Besides, it was 2017; a lot has changed since then)
