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Although recent years provided many protocols for anonymous routing in overlay networks, they commonly rely on the same communication paradigm: Onion Routing. In Onion Routing a static tunnel through an overlay network is build via layered encryption. All traffic exchanged by its end points is relayed through this tunnel. In contrast, this paper introduces dynamic multipath Onion Routing to extend the static Onion Routing paradigm. This approach allows each packet exchanged between two end points to travel along a different path. To provide anonymity the first half of this path is selected by the sender and the second half by the receiver of the packet. The results are manifold: First, dynamic multipath Onion Routing increases the resilience against threats, especially pattern and timing based analysis attacks. Second, the dynamic paths reduce the impact of misbehaving and overloaded relays. Finally, inspired by Internet routing, the forwarding nodes do not need to maintain any state about ongoing flows and so reduce the complexity of the router. In this paper, we describe the design of our dynamic Multipath Onion RoutEr (MORE) for peer-to-peer overlay networks, and evaluate its performance. Furthermore, we integrate address virtualization to abstract from Internet addresses and provide transparent support for IP applications. Thus, no application-level gateways, proxies or modifications of applications are required to sanitize protocols from network level information. Acting as an IP-datagram service, our scheme provides a substrate for anonymous communication to a wide range of applications using TCP and UDP.