Our perspective is that we are not paying 'staking profits', we are paying users to grow the Anonymity Set and that doesen't necessarily imply storing your Bitcoin on Whirlwind for a long period of time. You could deposit, receive a day worth of rewards and then withdraw. That would still help us achieve our goal while minimizing your risk. You could also monitor the multi-sig balance and withdraw whenever you feel like the amount is too big.

In any case there is still risk involved and I want to emphasize that we are not downplaying it by any means, we are presenting the details of how everything will work and you are free to decide for yourself if it makes sense to use Whirlwind or not.

Open question: Let's assume we don't go ahead with the Anonymity mining campaign, what other alternative exists to grow the Anonymity set? We need to bootstrap this in one way or another until we get to a decent number, for example 10,000 deposits. After that point it won't be necessary to pay anyone anything since the service would already be secure enough, that is the whole point.

There are major differences between our service and CM and the way they are operated, for these reasons we don't believe we will suffer the same fate. Keep in mind that we are doing nothing illegal and privacy does not equal criminal activity.

1.Whirlwind is not a traditional 'mixer' by any means, it's way more than that. In fact we do not think that term is appropriate, a better description would be one of the following: Privacy Pool/Privacy Protocol/Privacy Tool/Permissioned Privacy Oriented Bitcoin Sidechain.
2.Their mixing method was to provide you with an address funded before your deposit, that could already be considered money laundering. We on the other hand don't use any shady mechanisms while achieving superior privacy.
3.They openly encouraged the use of their service for illegal purposes. We do not encourage this kind of behaviour and do not advertise in any places where this is the case.
4.We offer users all the tools that they need in order to stay compliant. You can prove the origin of funds if you ever need to and that responsibility lies solely with the user, not with us. If a service deems outputs from Whirlwind as risky they can ask for more info whenever a user deposits those outputs there, it's none of our business and it's the users choice if he wants to comply or not.
5.We didn't commit any crimes while creating/operating Whirlwind as opposed to CM's identity theft and other things
6.CM opsec was ridiculously bad on a personal level as well as regarding the service itself. If 2 servers paid with Paypal accounts that are linked together in multiple ways is all you need to find in order to take the service down then noone should be surprised when it happens. Whirlwind's infrastructure is way more complex than that and for this reason funds can't just dissapear out of the blue unless we exit-scam ourselves.

Our Anonymity mining campaign will run until we get to a certain number of total deposits and that will probably take 1-3 months. If CM implemented a similar thing only for their first 4 months of existence there would be no issue. They didn't need to do that because their system works in a fundamentally different way, we on the other hand need a strong Anonymity Set in order to provide real privacy, and the higher it is the better. While the current figure (291 total deposits) is more than enough for low amounts, we need it to be way higher in order to be able to process higher amounts in a timely manner with the same level of privacy.