I think this is the part I see as a potential hurdle for hosting a primarily auth-purposed instance. Fetching remotely would be too slow but data replication would exponentially increase storage over time. So anyone planning to self-host would need to take on the storage growth costs of all other federated instances raising the barrier for entry over time. Unless I’ve misunderstood this point

A long, long time ago
I can still remember how upvotes used to make me smile
And I knew if I just got rollin'
That I could help keep users scrollin'
And maybe there'd be content for a while

But July 1st makes me shiver
With far less content to deliver
Bad news on the frontpage
I can no longer engage

I can't remember if I erupted
When I read apps would be disrupted
But disappointment interrupted
The day that Reddit died

So bye, bye, old Reddit API
Stuck with Huffman through some updates but the updates were shite
And them good ole boys were snortin' gonewild 'n smite
Postin' this'll be the day that it dies
This'll be the day Reddit dies

Did you read the TOS?
And do you have faith in mods success
If users still engage with subs?
Now do you believe in open access?
Can ads save your failing assets?
And could you be less avarice heedless schlubs?

Well, I know that you're in need of clicks
'Cause I see you suckin' Newhouse dicks
You both killed third party apps
Man, I thought that you might give a crap

I was a lonely teenage software dev
With a git repository and a shit to give
But I knew those apps wouldn't live
The day that Reddit died

I started singing bye, bye, old Reddit API
Stuck with Huffman through some updates but the updates were shite
And them good ole boys were snortin' gonewild 'n smite
Postin' this'll be the day that it dies
This'll be the day Reddit dies

Now for ten years we'd moved on from Digg
And greed grows fast for a ventured pig
But that's not how it used to be
When the users came for the cats and memes
From apps made by the community
And content that came from you and me

Oh, and while those cats were growing old
The number crunchers grew too bold 
The communities dismissed
Now everyone is pissed

And while Lemmy federates with Marx
The concept knocks it from the park
It's time to migrate to an ark
The day that Reddit died

So bye, bye, old Reddit API
Stuck with Huffman through some updates but the updates were shite
And them good ole boys were snortin' gonewild 'n smite
Postin' this'll be the day that it dies
This'll be the day Reddit dies