But how would developers mitigate this in the next iteration of the "next Wasabi"? Or what other alternatives can be built, using another path, to protect and preserve Bitcoin's fungibility?
I think the closest thing is Atomic Swaps. All the other currently existing alternatives are now closed source or honeypots. I imagine the open source Monero to Bitcoin Atomic Swap mechanism will be very handy for privacy. Move Bitcoin to Monero and back and you have a new set of coins obtained in a decentralized manner. How decentralized and open source.. is another discussion but hopefully it exceeds expectations. Thing is, there is a large market for Bitcoin privacy and fungibility. I would imagine many would pay big prices to have some privacy over here, so who gets to offer the perfect solution will earn money big time.
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Regards,
PrivacyG