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.
I think there's a third big thing: really good UX. I don't have an Android phone, so I don't know about Jerboa, but the web interface ... could use some work. I know the bug with new posts pushing the feed down is on track to be fixed soon, but wow, it can be really quite bad. iOS apps are getting way better quickly, too, but overall they're nascent.
I can't quite put my finger on it, but additionally, I think the ranking algorithm(s) could use some work. I can see there's tons of content, if I sort by new, but sorting by active results in stale posts, and sorting by hot doesn't seem to quite hit the sweet spot on tenured/good quality content vs. newness. The recent ranking bug(s) haven't helped matters there either.
yep, the default sorting makes it looks like nothing has been posted for 3 days
At least for now always sorting by new is very pleasant.