"Volumes Have Almost Tripled; Crypto Was Made for This," MEW's Kosala Hemachandra Says

Hello Defiers! This week’s interview is with MyEtherWallet founder and CEO Kosala Hemachandra. As the head of one of the most popular Ethereum interfaces, Kosala has a unique perspective on how the global pandemic has impacted activity. He also shared how coronavirus has disrupted his own life, and talks about what it’s like to run a company from his bedroom at his family’s home in Sri Lanka, on opposite timezones as the rest of his team. He also talks about how crypto was built for crises, about the importance of building a decentralized product —if it’s custodial, it’s not worth it— and what he believes the future of digital wallets will look like. Lastly, he told me about MEW’s next big project: a DEX.

Apologies for sending this week’s interview and podcast on a Saturday (I usually send earlier in the week) —that was bad planning on my part.

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🎙Listen to the interview first hand on this week’s podcast.

🙌 Together with Ampleforth, a digital asset protocol for a base money which doesn’t require collateral and is uncorrelated with the rest of crypto.

Kosala Hemachandra: MyEtherWallet is an Ethereum interface for transacting and doing actions that are related to decentralized finance on Ethereum. We also have an educational platform and a mobile app available for everyone, that's meant for normal uses and newcomers to onboard into area.

Camila Russo: I want to get into how coronavirus pandemic had affected you. Where are you taking this call?

KH: I'm currently in Sri Lanka. That's where I'm originally from. In 2009, I migrated to the US and ever since then I was coming back and forth once a year. This time it has been pretty interesting.

Since the last week of December is usually off or you have to work remotely because it’s Christmas and then New Year’s we decided to make the whole MEW team work from home and take days off on the holidays. I decided to visit Sri Lanka and spend the New Year there with my mom. My plan was to come back after two weeks but as we got into mid January this whole situation started to get worse. So I thought, maybe it's time for me to wait another week and see how it goes and hopefully they'll have it under control. And then I waited one more week and then it only got worse. At that point onwards, it got worse and worse. And now I'm in complete lockdown.

So it has been like almost a month when Sri Lanka was suddenly like, in two days, the day after tomorrow, we are going to go to full lockdown. So no more businesses, people cannot leave their house, airports are closed, no postal services and for like a week after the lockdown, we didn't even have any delivery services. We had to buy everything in two days.

My whole team is in US, so they're working remotely as well. But yeah, I am handling and managing the whole team from Sri Lanka and don't even get me started on the time zone issues.

Kosala Hemachandra. Image source: The Merkle

CR: So how has that been like, managing a team remotely and on different time zones and all the other constraints that a lockdown has? Like are you like working through the night and sleeping during the day?

KH: Yeah, pretty much. The team is based in LA, so between LA time and Sri Lankan time, the time difference is 30 minutes. And then you have to change the AM to PM. So it's almost completely opposite. So I was initially, when it first started, I thought this is only going to continue for a couple of days, so I'm just going to stay up until like midnight every day so that I'm up until like 11:30 am LA time and make sure everything gets done that needs to be done. And then during the day I'll work as much as I can. But then slowly that time started going into the morning. Yesterday I went to sleep around 7:30 am Sri Lankan time.

CR: So you were up all night.

KH: Yeah, that's the situation and but hey, it works and the good thing is I'm a night owl, so it's actually, okay.

CR: Would you consider having a more distributed and remote based team after this this crisis is over?

KH: So one big thing that everyone, or at least in our situation, that we are missing is physical contact. So yes, we can have video conferencing or virtual activities but I don't think humans were made to not have the physical presence of another human being for this long. Being in the same area or same location, you get to connect with your team in more emotional level. You get to know about them and they get to know about you. So that's what I'm missing and our team is missing. We try to be in touch with everyone every day, have calls or video. But to answer your question, as long as there's a day or a month that the whole team can get together and work in one place, I think that working remotely or virtually can work out in long run.

Surging Volume

CR: Have you seen any change in how people are using Ethereum applications or if they're transacting in different ways during this time. Have you seen any interesting trend in how people are using MEW?

KH: Yeah, that's definitely something that we noticed. Our volume has doubled or tripled over the last two to three weeks. Volume in transactions and swaps. So that means that people are using Ethereum and actually doing things on Ethereum. Yesterday or today I read that Ethereum transaction volume, the USD equivalent amount is actually going above Bitcoin. It only took 4.5 years for them to overtake the transaction volume in Bitcoin. That's a good sign that people are getting into DeFi and Ethereum. The DeFi ecosystem grew by 800% over the past year, which is amazing.

CR: Can you go into more detail on those volume metrics? Where is it concentrating, and what are people doing the most?

KH: We don't have individual analytics. We don't track any of our users or any specific activities that our users do. We have aggregate results on number of visitors that go into MEW and what countries they come from and what kind of transactions they're doing. We can detect from our commission that we get from swaps how many transactions were done and what was the volume. So I cannot give you any specific data because I honestly don't have it. But the volume of exchanging from ERC20 tokens, swapping from one token to another or coming from Bitcoin to ETH or going from ETH to Bitcoin, this volume almost tripled over the past month or so. That just means people are using Ethereum in this difficult time.

Crypto Was Made for This

CR: Why do you think this is happening?

KH: When you think about it —and not just talking just about Ethereum, but crypto in general —crypto is made for situations like this. Crypto is not controlled by governments, so if you compare crypto against the stock market, the stock market is fluctuating and volatile, maybe even more than crypto right now, and it's hard to predict whether it will be best to invest or take your money out. For the stock market, most of the businesses are closed and productivity is going down. Also, for the US dollar, the US just created 4 trillion dollars out of nowhere.

And that doesn't happen in crypto. In crypto, you know exactly how much the inflation rate is going to be. No one can just come up and be like, okay let's just create 100,000 more ETH. That's never going to happen. Right now fiat money is losing its value, especially in this situation, while crypto is holding it. We don't see a huge increase in crypto prices but it's been stable for the past month or two in general compared to what's happening.

CR: Even if crypto has seen huge drops and crashes especially last month, at least like you say, it's a completely separate system from fiat currencies and government-backed currencies and you get an asset that's uncorrelated with traditional financial securities. Whether it goes up and down, at least you know, that it's not being affected by all these central banks, monetary policies and government bailouts and the stock market going down because people are staying in doors and not buying stuff.

It's interesting that right now is when you can really get that value of a completely uncorrelated asset class. So you think that's what's impacting that increase in volumes?

KH: Yeah I totally agree and believe that's affecting volume in Ethereum and other cryptos.

[ … ]

Paid subscribers have access to the full interview, including sections on:

• What’s needed to bring in more mainstream users
• Importance of non-custodial dapps
• The future of digital wallets
• MEW’s plans to launch a DEX

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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.