If an instance were to leave the fediverse do we loose all its data? Say for example iPad Lenny.ml domain was seized or was forced to shutdown so we loose all communities from that host? Do we not see any posts? Can we still post to it? Seems like a big flaw if we have multiple large instances that can shutdown a significant portion of Lemmy.
It is indeed a flaw, though it is in itself already a fix for the single-instance services, such as Reddit.
If an instance becomes unavailable/defederated on the fediverse, a large portion of content will become unavailable, but the service will still be functional. If a single-instance service becomes unavailable, or if the admins do something stupid, ALL data will be jeopardized.
I know that this might not be the answer you seek, but I think it helps adding perspective to the problem.
But the downfall I see is now we have to rely on multiple instances to keep lemmy as a whole running. Whereas with unfederated they are larger scale and probably are more efficient/cost effective with backups. Where as a smaller instance may not be able to make it then we loose lots of data.
I think this would be good if we can migrate data. Say for instance if my instance had to go under for finance reason I can post the “data” files and someone could fork my instance and everything is then recovered. Or maybe even add to existing instance.