Wasabi Wallet Launches UI Coordinator Selection
On June 1st, Wasabi Wallet shut off its coinjoin coordinator zkSnacks. Thanks to coordinator selection, coinjoining with Wasabi Wallet will still be possible. But the feature comes with drawbacks.
After Wasabi Wallet announced the shutting down of its coinjoin coordinator services on June 1st, many were left wondering about the future of Bitcoin privacy. With its newest release, Wasabi Wallet now launches coordinator selection directly in the wallet UI. But the feature does not come without drawbacks.
Wasabi Wallet previously offered the highest volume coinjoin service, with liquidity of up to 210,000 BTC per month and coinjoin rounds of over 400 inputs. The adding of custom coordinators has always been possible in Wasabi Wallet by editing its config file, and a UI selection has long been a requested feature among coinjoin users to further the decentralization of coinjoin services.
With Wasabi Wallet's newest release, instead of editing Wasabi Wallet's config file, users can now add a custom coinjoin coordinator directly in the coinjoin settings of the wallet's user interface. This greatly reduces the technical abilities needed participate in alternative coinjoin rounds, but the feature may still have users facing challenges.
To provide privacy for users, a coinjoin coordinator needs enough liquidity to effectively obscure inputs and outputs. As new coordinator services are propping up, services will likely lack in comparable liquidity. It's a chicken and egg problem: until enough liquidity is provided, coordinator services cannot offer adequate privacy, which will likely lack so long as too few users actually use the services.
Finding alternative coordinators will likely be a further challenge for users due to the regulatory uncertainty surrounding the operation of coinjoin coordination services. For now, coordinators can be discovered via the BTCPay Server coinjoin plugin.
New coinjoin coordinators and corresponding clients should usually be used with caution. It is not out of the question that malicious clients may be advertised risking a possible loss of funds. In Wasabi Wallet, the support of custom configuration of coordinators removes the need to use alternate wallet software to coinjoin and thereby mitigates possible loss of funds.
Ironically, while claiming to combat crime, the DOJ's prosecution of Samourai Wallet and the consequent shutting down of Wasabi Wallet's zkSnacks coordinator may heighten the risk of scams and theft in bitcoin in the short term, pushing users towards less trusted alternatives. The implementation of custom coordinators in the official Wasabi Wallet client now helps mitigate this risk.
