In my opinion, there are two big things holding Lemmy back right now:
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Lemmy needs DIDs.
No, not dissociative identity disorder, Decentralized Identities.
The problem is that signing up on one instance locks you to that instance. If the instance goes down, so does all of your data, history, settings, etc. Sure, you can create multiple accounts, but then it's up to you to create secure, unique passwords for each and manage syncing between them. Nobody will do this for more than two instances.
Without this, people will be less willing to sign up for instances that they perceive "might not make it", and flock for the biggest ones, thus removing the benefits of federation.
This is especially bad for moderators. Currently, external communities that exist locally on defederated instances cannot be moderated by the home-instance accounts. This isn't a problem of moderation tooling, but it can be (mostly*) solved by having a single identity that can be used on any instance.
*Banning the account could create the same issue.
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Communities need to federate too.
Just as instances can share their posts in one page, communities should be able to federate with other, similar communities. This would help to solve the problem of fragmentation and better unify the instances.
Obviously there are plenty of bugs and QoL features that could dramatically improve the usage of Lemmy, but these two things are critical to unification across decentralized services.
What do you think?
EDIT: There's been a lot (much more than I expected) of good discussion here, so thank you all for providing your opinions.
It was pointed out that there are github issues #1 and #2 addressing these points already, so I wanted to put that in the main post.
Beehaw did nothing that isn't common in the fediverse. I know people that are new to all this may be shocked by Beehaw's decision, but defederating from intances that promote intolerant discourses or allow trolling is the way to keep an instance alive. People will end up suspecting and defederating from an instance that interacts with intances that allow or promote that type of content or behaviour.
Again. Its not a criticism of beehaw. Just kind of an example of you are who you associate with sometimes IRL, but in the fediverse. Its unfortunate and I understand why they are building what they are. I support that.
Its also a reason why having very large concentrated communities can be bad and why federation or de-centralization is important. But with that, it does appear we need some better tools for cross-instance moderation and cross-instance community grouping so that you can say...create a "technology multi-community" that includes technology@beehaw.org and technology@lemmy.ml and apple@whateverinstance.com or whatever etc. etc.
That would allow for decentralization but still give people the ability to browse them as one community and if you so happen to be registered on something like lemmy.world, then you cant see the beehaw.org content but can see the rest etc.