Dmitry Mishunin, Founder/CEO HashEx


Pemo: Welcome Dmitry. Thanks so much for joining us today. I am a particular stickler for the security side of fintech, and so I’m really interested in your experience and also Hashex, your company. Please let us know a little bit more detail about that.

Dmitry Mishunin: Hi. I am very glad to participate in your screen cast and in this interview. Thank you for inviting me. It’s a very good opportunity for me to talk something about us, about DEFI security and about fintech security itself.

Pemo: Yes.

Dmitry Mishunin: Let’s start about HashEx and its brief history or something else?

Pemo: Yes, yes. Just give us an insight into your company and what you’re working on at the moment and what the priorities are.

Dmitry Mishunin: Okay. HashEx, itself, is a new company launched in 2017. Before this, the same group of people with me, with my core team leads, we were doing some development. We had not done any websites or mobile applications, we did only complicated platforms. Usually we share our resources to huge IT companies, which hadn’t enough people, enough hands to do some MVPs or some new projects and prototypes. We were like a magic wand for them.

Dmitry Mishunin: Later, and by later, I mean around 2015, 2017, if you noticed a new trend, which was the Ethereum smart contract. For me, I am honestly from infrastructure services. At that time, I made something like development and operations, clouds, Amazon and Google services, that’s all. For me, Ethereum was a really crazy idea. Honestly, I did not believe in this at that time, because I thought that it’s really crazy to summarize all their decentralized resources to collate something. It was unbelievable for me.

Dmitry Mishunin: But later when Ethereum, a little bit, changed their focus from cloud computing to smart contracts, to something slow but valuable for the society, step-by-step, I became a believer of this idea.

Pemo: Okay.

Dmitry Mishunin: In 2017, during the first Ethereum boom, we started development, not as consultants at that time, only development of smart contracts. Right after the first year of HashEx existing, we gained a really good expertise of how to write smart contracts and how not to be hacked by technical errors at that time.

Dmitry Mishunin: If you make a step back to the past time, there were lots of really common mistakes in smart contracts. Every other smart contract developer made those mistakes, and later all the funds of the project were gone, something like this.

Pemo: Yes. I heard that from a lot of developers, yeah.

Dmitry Mishunin: Yeah. Really stupid mistakes, really similar. Later, a really good framework written by the OpenZepplin company covered more, I can say maybe 80% of those mistakes just by using good software and good code.

Pemo: Right.

Dmitry Mishunin: At that time, it was really, really important to tell people how not to make those mistakes. We started auditing services and work like technical advisor. When people came to us with their DFS, with their DFS or score, we advised them or recommend what to change or how to implement this a decentralized approach, and not a centralized approach.

Pemo: Yeah. Did these companies then have much better record as regards security with their DFS?

Dmitry Mishunin: Yeah, for sure. We gained some expertise. We gave lots of recommendations and the next five years we did smart contracts audits. Right now, I think we have made more than 1000 of audits.

Pemo: Wow. Good work, you. That’s fantastic.

Dmitry Mishunin: Thank you.

Pemo: Yeah, because the whole idea of smart contracts, blockchain and crypto, fantastic, but yeah, obviously at the beginning, there’s been a lot of errors that have just continued on. Unfortunately, the hacking is not a good look for any company, so good work. Tell me a little bit about what your feeling is about DEFI. Yeah, if you could talk a little bit about DEFI, thanks?

Dmitry Mishunin: For sure. I like DEFI a lot because for me, DEFI, first of all, it’s a good new world, a new opportunity for people and for robotic interactions. I mean that in the classic financial world, if you want to implement some software or if you want to connect real world and material world with the internet of things or some field of this, you need some connections, not software connections, but real world connections because not every bank will grant you access to their API so that your device can do some transactions or something like this. You have a really big border between your idea, a new idea, and between realization.

Pemo: Right.

Dmitry Mishunin: DEFI opens and it destroys this border and you can just go there and generate your own private key and try to use it.

Pemo: Right.

Dmitry Mishunin: For me, it’s a great opportunity. It’s like a new world. Like the dot-com boom 20 years ago.

Pemo: Yes.

Dmitry Mishunin: Yeah, it’s the same.

Pemo: Yeah.

Dmitry Mishunin: Everybody from the world can use it. It’s really, really great.

Pemo: And particularly that the big banks have had so much power, and generally their motivation is not for the customer. That’s why it has been so wonderful to see all these fintech companies and crypto companies and blockchain companies jumping on with apps and the new banks that are also coming to light, the virtual banks. Yeah, it’s all great for the customer, really, accessing the APIs.

Dmitry Mishunin: Definitely, definitely.

Pemo: Yeah, yeah. [crosstalk 00:07:25] Sorry, you go ahead.

Dmitry Mishunin: No, no, no, you go ahead.

Pemo: Okay. The other thing I would really like to talk about and get your perspective on is Web3. I just read an article a couple of days ago where they said that the whole theme about Web3 is that it’s not a technology, but basically it’s being used by some investors to dump a lot of coins very quickly and get their return on investment very quickly compared to the way venture used to happen, it could be 10 years before the return on investment happened. What’s your perspective on Web3?

Dmitry Mishunin: If you speak about technology or marketing tricks, I think this worlds are not dissimilar. As I said before, technology differs from markets and trends.

Pemo: Yes, okay. As far as the technology of Web3, that’s what I’d like to hear about, because obviously this article was saying there was no technology for Web3.

Dmitry Mishunin: Okay. If you speak about the technology, I think in the future, we will have something like a centralized government and a decentralized government. It’s a huge concept.

Pemo: Okay.

Dmitry Mishunin: Countries, like we see them right now, when you have some land like the United States or like Russia or like China, and you have some people in this land, you have some resources in this land and you are trying to control all this, some countries use democracy, some countries some other framework.

Pemo: Or Separatarian.

Dmitry Mishunin: Yeah, but honestly, this is like our legacy from the past century is when we have territory and we have governments over this territory.

Dmitry Mishunin: My vision for the future is a little bit different. I think we will have something like IT companies, or IT giants around the territory, like a Facebook or Google or Apple or so something like this. They will have their own land and some people will live on this land with their rules, with their laws.

Dmitry Mishunin: I think we can see something like a minimal viable product of this idea right now, when we speak about huge campuses, of great IT companies, when you have hotels, apartments, restaurants, facilities, and other infrastructures inside the campus.

Pemo: Right.

Dmitry Mishunin: Everything there is ruled by the laws of this company. Honestly, they sure don’t restrict the main laws like the constitution or federal or state laws. But for example, they have their own police and their own security people. They have their own rules, like today, you can go to the park until 10:00 PM or tomorrow the park starts working from 8:00 PM. This restaurant is working all day, this restaurant is not working all day, etcetera. They already have some rules there.

Dmitry Mishunin: They sure use their own currency like US dollars, but they honestly can use their own tokens or their own coins, no big deal for it. We know examples when employees are granted some free dinners of free lunches by the company, so it’s a kind of coin.

Dmitry Mishunin: If we step ahead, we can realize that this territory and this IT company can rule with its own rules, the people who are living there. Also, we can add some robotic devices, like the internet of things, devices like helicopters, drones, delivery services, etcetera. This ecosystem have to be connected with each other, with people, with robots, etcetera.

Pemo: So can I ask a question here?

Dmitry Mishunin: Sure.

Pemo: What we’re talking about is virtual reality, or we are still talking about the bricks and mortar?

Dmitry Mishunin: No, it’s a real reality, not virtual reality.

Pemo: Bricks and mortar, okay.

Dmitry Mishunin: Our life with human beings inside and with some [crosstalk 00:12:09], not a metaverse, like real reality.

Pemo: Okay.

Dmitry Mishunin: In this case, there should be some people who don’t agree with the rules of these companies. Right now, in the software world, we have open source software and proprietary software, closed source software.

Pemo: Yes.

Dmitry Mishunin: Yeah. Open source software can be ruled by a community. In a decentralized world, we call this DOA, decentralized autonomous organization.

Pemo: Right.

Dmitry Mishunin: Which is working like a real democracy, if we can call it so, because everyone can vote with his vote.

Pemo: The community is basically governing. Yeah, okay.

Dmitry Mishunin: I think there will be some kind of land where those DOAs will work. The community will rule the land, create some rules, build some structures, etcetera. The world will be split between closed source organizations and closed source governments and open source governments. Here, we come to Web3 because to rule an open source organization, Web3 is a really good approach.

Pemo: Interesting. How do you see the incumbent governments dealing with this new reality? Let’s take, for example, compliance issues. In your line of work, obviously you have to have compliance when you’re hooking up to other APIs. Can you talk a little bit about your concept of that? I’m really interested in what you’re saying.

Dmitry Mishunin: I think there, the idea, the reality will slightly be changed because compliance is a really important thing, but it’s important if you try to figure out something illegal. If we speak about open sourced government and open sourced territory, it’s another question of what is illegal there?

Pemo: Ah.

Dmitry Mishunin: Let’s imagine that we just moved from Earth to the moon or to Mars, for example.

Pemo: Yeah.

Dmitry Mishunin: Nothing is built there, no prisons, no rogues, no thieves, no accidents. What’s illegal? For example, I bring some, I don’t know, some drugs, not drugs like cocaine, but pills like vitamins.

Pemo: Yeah.

Dmitry Mishunin: For me, those vitamins from Earth are really good. I always buy them in Russia. For example, in the United States, I can’t buy them because they’re not produced there.

Pemo: Yeah.

Dmitry Mishunin: I bring them to the moon. You are a US citizen, and you are asking, “Dmitry, what is this? This is illegal.” I don’t think so. I just buy it in the pharmacy in Russia, it’s nothing illegal in Russia.

Pemo: Yeah.

Dmitry Mishunin: You just speak about new rules and new territory, it’s really hard to imagine right now, what’s legal and what’s illegal. The question about compliance is really important in case of the transactions themselves.

Dmitry Mishunin: If you speak about a decentralized world and everything will be in public ledger, like blockchain. You can easily check which transactions were made and from whom to whom and what they or paid for, etcetera. Later, the government, the DOA, I think, should vote, was it illegal or illegal? I have some feeling that compliance and KYC and AML procedures in the decentralized world will be some other kind of thing. So not like now, when we need to show our ID or our password that says, “This is Dmitry and this is a prescription for his vitamins from the pharmacy.”

Pemo: Okay, interesting. We are really going into a brave new world then, from what you’re sharing with me.

Dmitry Mishunin: For sure.

Pemo: Yeah. The incredible amount, in the last couple of years, of hacking and stealing of NFTs and crypto, can you talk a bit about what the solutions to that would be? Because it’s disappointing. I’ve supported Bitcoin since 2008, when it was first mentioned, and often was a lone voice. It’s disappointing to see so much of the hacking and stealing that’s going on in the public forum. Can you talk a bit about what needs to happen now, considering this is your area of expertise.

Dmitry Mishunin: Yeah, this is my field. I can speak about it for hours.

Pemo: Yes. What’s your advice on a general level?

Dmitry Mishunin: It’s being very set because of the situation itself. But if we take a look from the other side of this coin, for example, right now … A few months ago, I made a huge presentation about security in the field, and I have some numbers. Around $200 billion in the DEFI and $20 billion were stolen in the last year, so 10%.

Pemo: Wow, wow.

Dmitry Mishunin: Yeah. That’s a crazy amount, for sure.

Pemo: Yeah, incredible.

Dmitry Mishunin: Incredible. But if we, for example, take a look to the classical bank system, the classical financial system, every year, I can say some crime or some dark operations, no, it’s some cheat and tricks. When one company tries to steal money from another company without any crime, just you are ordering some services from me, I’m selling them to you and then I transfer money to some offshore company and do nothing for you-

Pemo: So laundering money. Yep.

Dmitry Mishunin: Something like this. This amount is much higher than the DEFI amount, hundreds of thousands of billions are stolen that way. But because DEFI is open for everyone, and honestly, we work in this field so we investigate this, it’s interesting for us. It’s new.

Dmitry Mishunin: We noted this and we don’t know anything about how, for example, in one huge bank, some money was stolen and maybe there was much more stolen, but we don’t know anything because all of this is private, and we don’t have access of this information to this data.

Pemo: Yeah.

Dmitry Mishunin: But if we return to DEFI and blockchain, honestly, the amount of scams of stolen funds, it’s crazy, and for sure, our mission, for example, HashEx’s mission is to bring trust into a trustless space. All the blockchain are a trustless space hen you can work with each other, people without any trust, because they’re built in that way that nobody can steal main funds from each other because they don’t have private keys, but those spaces have already lost people’s trust because of lots of scams and rogues, it’s unfair to people themselves. For us, our mission is to bring trust there, back.

Pemo: And is that through auditing basically, auditing of code?

Dmitry Mishunin: Not only about the auditing, security auditing is really important for us.

Pemo: Okay.

Dmitry Mishunin: This year, and the end of the previous year, we started rebuilding HashEx. Right now, we focus our resources on data analysis.

Pemo: Okay.

Dmitry Mishunin: We are planning to become a Bloomberg in the DEFI fields in the next three years.

Pemo: Fantastic.

Dmitry Mishunin: So what we are doing, we are gathering all the Ethereum compatible blockchains right now, data in our database. It’s about two terabytes of data every day. We analyze this data. We know the cash flows between huge smart contracts. We know the cash flows between one chain and another chain. For example, if we see something interesting, like a huge smart contract, let’s call it a bank contract, that is losing money with big speed, we can alert this. We can warn the owner of this project, that something happened. Our main idea of that-

Pemo: So sorry to interrupt. You can actually warn them before there’s money stolen? Is that what you’re saying?

Dmitry Mishunin: When something is started, yes, yes.

Pemo: Yeah, very good.

Dmitry Mishunin: Our main idea is data democracy. For example, we are using some of our tools for a couple of years. It’s really hard for a newcomer to set up the same infrastructure because it’s lots of data. Honestly, it’s incredibly hard to set up the same infrastructure if you’re a new user. The blockchain itself is public, but people can’t use it because there’s too much data. Our point is to share this data to everybody so people can make data driven decisions, not some feeling decision.

Pemo: Fantastic. Two terabytes a day, that’s a lot of data just in one day.

Dmitry Mishunin: For sure, for sure.

Pemo: How have you been doing it?

Dmitry Mishunin: Do you mean the technical part or what the software solution is we are using?

Pemo: The data. How long have you been uploading that data, if it’s two terabytes a day?

Dmitry Mishunin: We don’t upload it, we analyze it. We store some of the data, but we sure have to analyze all the two terabytes every day.

Pemo: So you’re not just putting raw data up there. You’re actually analyzing it before you upload it.

Dmitry Mishunin: Analyze and aggregate. We make some decisions based on this data.

Pemo: Very good.

Dmitry Mishunin: We recommend some decisions to our clients. We are changing our focus from just security provider to DEFI intelligence provider.

Pemo: Wow. Well, I’m very impressed. I have to say, Dmitry, it’s been really delightful talking to you and learning more about the work you’re doing in HashEx. I really wish you all the best for the future. It sounds like you’re going to be a key company to support a little bit more trust in all this new technology.

Dmitry Mishunin: Thank you for those words.

Pemo: It’s a pleasure. Thanks so much for sharing with us today.

Dmitry Mishunin: Thank you.

Pemo: All the best. Thank you.

Dmitry Mishunin: Bye-bye.