Understanding Mimblewimble (MWEB on Litecoin), Part 2

I fear that too much privacy on the base layer (such as Zcash, Monero and now Litecoin with MWEB) will mean that these coins can no longer legally be exchanged on centralized exchanges (CEX). This will dampen adoption and usage and make the user pool so small that transaction analysis alone is enough to smoke out any users.

In other words: you need big usage to hide in a crowd. It doesn’t matter how shielded or hidden your transaction is. If you look like anybody else but you are the only person in the room, then you will be recognized.