Why DarkSend works so well:
Darksend is ahead of time mixing at the protocol level. Each wallet has it's balances denominated in 100s, 10s, 1s, 0.1, etc... Actually, they include a tiny fee in the denomination so that the amounts include this for when you send. Example: 10.0001, 1.0001, 0.1001, etc... These denominations can easily be expanded to lower denominations as the coin grows in value.
These amounts are mixed by basically renaming their account number with a new account number, provided by the original wallet, but is completely untraceable to that wallet. (as all account numbers are) By renaming at the same time others are renaming their same denominated funds, you don't know which of the actual funds come from where. It instills doubt and thus privacy.
What this does is allow anyone with a copy of the block chain to follow the coin. No fancy math that completely obfuscates the blockchain so you can't physically follow the coins and tell if more coins are being introduced or anything is being manipulated. In such coins, you have to trust the encryption and the way it was used in the program. This is certainly more opaque than Dash, but not open to audit like Bitcoin.... and Dash. Dash does NOT want opacity, only privacy. Which is in fact arguably as private as opacity with the added bonus of being able to see, on the block chain, when something incorrect happens. (and thus discovering a loop hole or bug)
Why so many rounds of mixing? Because, in it's current format, the user's IP could be tracked by a malicious MN. The chances of a malicious MN successfully tracking your mixes exponentially decreases the more you mix. There have been charts posted of the chances of revealing the origins of a mix after 2, 3, 4, etc rounds of mixing, and they are miniscule, even if 90% of the MNs were owned by one malicious entity.
Still, the next iteration of DarkSend will hide the IP addresses of the users through the DAPI that is part of the Evolution project. Evan forsees one round of mixing as being acceptable, and 2 as being basically (my words) for the paranoid. Aside from that, the coins will no longer have to wait, because the underlying structure will take care of that (and thus, no IP address will be around, not if you're using the Evo wallet. The information, in that case, will come from the sharded database and user info will be completely hidden. Only account numbers can be seen in that case. And of course, people will pay to user names, not long stringed account numbers, making everything so much easier to use
So basically, DarkSend has never been broken, and does not need to be fixed. However, it is evolving due to the new opportunities afforded the new Dash Evolution structure coming this year. Which, by the way, can be used anonymously (never publishing your user name), openly, or finally, there will still be the old style wallet for the truly paranoid
