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.
There is also the additional issue of defederation, not just your instance stability. Like if you happen to be one of the 30k users on lemmy.world that got cut off from Beehaw because you trusted the "it doesn't matter where you make your account, it's all shared in the fediverse!". If there's a risk Gmail decides to block all Hotmail users one day, creating a Gmail account in the first place seems like the safer bet.
Absolutely! Don't fool yourself into thinking this will be the only time this happens. Some instance owners will never be willing or able to manage their servers as well as the big players, and that means bad actors can creep into other instance through them!
Email servers getting blocked is definitely a thing that happens otherwise your inbox would be nothing but spam and email providers make sure that their users don't spam or they would get blacklisted by other providers. Email is inherently federated.
Back in the early 2000s it was still possible to run a mail server locally on a dialup line and have big mail servers accept emails saying "yo the return address for this is [email protected]", not using bigmail's outgoing servers, you can absolutely forget about doing that now. Back in those days I would also have 200+ spam mails per day, the situation was so untenable that nowadays you can't even get an email account without included spam filter unless you set up your own server.
Lemmy and the overall fediverse is not really in that situation yet, where actual commercial spammers make it a target, and the smaller hiccups and maybe a bit trigger happy beehaw admins just mean that when the shit deluge finally arrives, we'll have the tools to deal with it.