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Yeah I swapped my wasabi use to doing peg in and peg out on SideSwap to break the KYC exchange link. I was told this was a decent way to improve privacy because the UTXO history goes into a black box when you peg into liquid and when you peg out it’s hard to trace that history back to an exchange
Liquid is custodial but it's a federation not one entity
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There's no such thing as a federation, that's a marketing stunt. Still one API surface point of failure, and even if there are N keys there's no way to prove how they are actually distributed.
There's no reason to do that, Liquid's Confidental Transactions only hides amounts, not the transaction graph. Coinjoin hides both, and isn't custodial like Liquid.