I have yet another idea that might be good for this coin.
The transaction fees should also increase as difficulty increases. It makes perfect sense, more hash power, more expensive transactions, since the miners put up a lot more resources to make this happen.
And I'm thinking of this because log2 increases very slowly after a while. Well at least it increases and not decreases.

Did you make any graphs on how the reward would increase as difficulty rises?

The transaction fees should increase in a more linear fashion. Say to make block reward + (average tx fees per block over the last n blocks) = a total reward that goes up more linearly.  Hash power costs money so it needs to be paid for.

Once again since it's a mixing coin, it's only fair that the people mixing should be paying this fee, and the miners who provide the service should get paid.
For the end user that's mixing, it's all the same, if the miners don't get it, the traders will. Traders make it fluctuate, so the end user ends up paying exponentially more, as soon as more coins end up in the traders' wallets.
Then mining may become no longer be profitable and the coin will die, then we have to start another bubble coin, where only the early miners make some real money.