A story about Wasabi

[turbolay]

A Story About Wasabi

Wasabi Under zkSNACKs

The history of Wasabi before zkSNACKs is undoubtedly fascinating, but I am not the best person to write about it. My journey with Wasabi began in July 2022, shortly after the release of version 2.0.

zkSNACKs was the dream company to work for: chill, successful, and respectful of its employees' preferences. There was unbounded trust and freedom, the kind of experience you don’t fully appreciate until it’s gone. Once over, you keep comparing every new situation to it, but nothing quite measures up. It’s like a first love.

The group’s greatest strength was its diversity. Ironically, its greatest weakness was the same.
Everyone have different ideas about Bitcoin’s future. So naturally, everyone had different visions for Wasabi. This highlighted what zkSNACKs lacked: a clear and unified direction.

Financial success is a double-edged sword. It enables you to build all the features you can dream of, but it also removes the pressure to take risks. You end up endlessly refining designs without seeing the bigger picture.

Wasabi 2 was born of ambition: the ambition to create an unparalleled privacy solution for the masses and deliver financial gains to stakeholders. Hard choices were made, and some shortcuts taken. Yet, those decisions pushed cutting-edge research into production. Research alone doesn’t help anyone; production does. Tens of thousands of Bitcoin have gained privacy thanks to these choices.

But this ambition sometimes went astray. Privacy isn’t for everyone: it’s for those who understand its value and why they should pay a price for it. If someone doesn’t grasp why they need privacy, why would they go through the trouble of using BIP157 filters instead of connecting to an Electrum server? zkSNACKs aimed to maximize profits, so why was the software designed with small users in mind rather than large-scale ones, especially given the pricing model’s reliance on user funds?

Wasabi 2 tried to be everything for everyone, but in doing so, it became perfect for no one. It managed to alienate almost every group: not cypherpunk enough for cypherpunks, too complex for average users, and too opaque for power users.

This opacity was the software’s biggest contradiction. Wasabi’s core promise was trustlessness, yet many components were bundled in ways that were opaque and unauditable. Users were told, “The machine will make better choices than you.”

It sounds like a mess, right? But despite its flaws, Wasabi remains an outstanding and underrated piece of software. One of the most advanced in the sovereign-financial space. It’s easy to overlook the sheer number of features it offers and the sophistication of its user experience. Few wallets can compare.

Wasabi as a FOSS

Counterintuitively, zkSNACKs' end marked a new beginning for Bitcoin privacy. By moving liability away from Wasabi, everything changed.

The team could finally focus on making Wasabi the best free software for storing money, with robust privacy features and seamless service integration. The burden of compliance was delegated to coordination service providers, freeing Wasabi to prioritize its mission.

Of course, the transition wasn’t painless. When the money dries up, so does help. The real heroes are the ones who stayed with no other reason that passion for Bitcoin & Privacy. Wasabi is like a cruise ship: it’s hard to maneuver and takes time to change course.

But none of that matters now, because Wasabi has a vision: never die.

With this mindset, maintaining Wasabi becomes a matter of time and perseverance. First, the systems need to be streamlined. Dependency on central servers must be reduced and eventually eliminated. Internal conflicts must be avoided. Every contribution must be welcomed and valued.

But resilience alone isn’t enough. What good is software without users? For Wasabi, this is even more critical—on-chain privacy depends on a strong user base. Brand recognition and user adoption are Wasabi’s true assets.

This brings new challenges: balancing resilience and decentralization while retaining and growing the user base.

And let’s not forget funding. Foundations can be great sources of support, but they’re hard to convince and slow to act. Building new businesses is an option, but it requires individuals willing to take risks: a daunting task, especially in a hurry.

The most logical approach for Wasabi is to lean on its community, particularly wealthy power users. This shift has shaped the software’s direction: Wasabi must now cater to its community, focusing on impactful changes for power users while maintaining accessibility.

The path forward was long but purposeful. Small yet insightful user-facing improvements complemented a broader focus on decentralization, efficiency, and resilience.

Carrying zkSNACKs' legacy wasn’t easy. The shortcuts taken became apparent, and risks emerged. Trustlessness is a noble goal, but it’s hard to achieve when you implicitly trust the only service users rely on.

Now, the transition is getting closer and closer of completion. Finishing touches still remain, and while it will be long to finish, this task is currently a success. The user base has been retained, processes simplified, risks reduced, decentralization enhanced, and funding secured.

Wasabi’s future looks bright. It’s not just a wallet: it’s a movement toward enduring privacy and financial freedom.

Wasabi Tomorrow

The challenges ahead are as numerous as they are intriguing, but Wasabi has the tools, and the ambition, to address them. These challenges can be distilled into two overarching goals: relevance and self-sustainability.

Relevance

In the previous chapters, I explained what losing relevance is costing the project: fewer users, fewer contributors, and diminished external support. Addressing these issues is no small task. In fact, a rebranding might even be worth considering. But the most reliable path forward is to keep delivering outstanding features, maintaining a visible presence, and making it undeniable that Wasabi is the best of its kind.

While declining contributions can be blamed partly on relevancy, the deeper, more immediate issue is money. To remain relevant and innovative, Wasabi must become self-sustaining.

The integration of Silent Payments exemplifies how Wasabi can tackle issues head-on, in this case immediate funding. By introducing cutting-edge features that solve real-world problems (including those relevant to Wasabi itself), development not only secures its user base but also lays the groundwork for sustainable growth.

Self-Sustainability

An important reality to acknowledge is that traditional coinjoin may not be future-proof. Regulatory scrutiny and operational challenges are likely to intensify. However, the concept of multi-party transactions is undoubtedly the future. And here’s where Wasabi has an unmatched edge: years of experience building complex, collaborative transactions involving tens of participants. Wasabi is uniquely positioned to leverage this expertise alongside its strong existing user base.

Payments in coinjoin represent the first, obvious step forward. This evolution moves Wasabi beyond simple self-spending in multi-party transactions, solving multiple problems while unlocking significant new potential for the software.

From there, this foundation can expand to integrate additional services and generate affiliate revenue. For example:

• Opening Lightning channels
• Interacting with Cashu mints
• (Brace yourself) Swapping BTC for altcoins

Managing Liability

One critical guiding principle for Wasabi’s future is that liability for input acceptance into any transaction must never fall on the wallet itself. Integrated service providers should handle compliance, deciding which inputs are allowed to access their services.

Initially, most providers might accept outputs from transactions with low AML restrictions, but this permissiveness is unlikely to last. Over time, more providers will likely reject funds associated with coinjoin or similar transactions, particularly for payments made during coinjoin.

The only realistic workaround is partial transparency with service providers. In this model, a provider might see all inputs accessing its service but not know which specific inputs generate which outputs. This approach maintains strong privacy on-chain while enabling services to evaluate compliance as they see fit.

A multi-party transaction system could emerge as a network of small, coordinated transactions. Coinjoin would be just one service among many. Imagine an official Wasabi coordinator acting as a meta-coordinator, aggregating smaller transactions built by independent coordinators. While the anonymity set might be reduced against individual coordinators, the on-chain privacy gains would be substantial. Crucially, this meta-coordinator would bear no liability, as it would merely facilitate aggregation.

The Bigger Picture

Perfect, unilateral privacy may remain an elusive ideal without a breakthrough in regulation. Liability (whether for developers or operators) is simply too heavy to ignore. And if ignored, reality check might hit hard. Privacy will likely evolve as a patchwork of interconnected systems, each offering partial privacy as a secondary effect of their primary goals.

Take Ark, for example. For regulators, it appears more benign than coinjoin: focused on reducing on-chain fees rather than directly enabling privacy. Yet in practice Ark is way worse, in terms of regulations, than a standard coinjoin coordinator.

Wasabi’s Role

Wasabi must also reconsider its identity. Is it a wallet, or is it something greater? A multi-party transaction-building system may be the more prosperous path forward. However, realizing this vision will require overcoming significant hurdles, such as the protocol’s complexity and reliance on client-side protections.

Regardless of the specific direction, the future for Wasabi is incredibly exciting. The features being built now are just the building blocks. This journey offers immense opportunities for those willing to contribute, and I can’t wait to see how it unfolds. I’ll do everything I can to continue being a part of it and help shape the future of Bitcoin Privacy.