That’s exactly what I thought of. Here’s my proposal (though I don’t know if this can be implemented in the technology or if it would be compatible with ActivityPub):

Suppose we have two similar communities (i.e., north.pole and north.star, but they both tackle northness but in different instances). The mod from either communities would send an invite to the other to form a “group” or “federate” or “ally”. Now, if the other mod approves, here’s what happens:

Whenever you post something in a community that has a group, it would be synced with the communities in other instances that are allied to it, including upvotes, comments, and other metrics. So if I post in north.pole, people in north.star could see my post too because we’re in an “alliance” and vice versa. They can also upvote my post and I can upvote theirs. There would just be a sign (probably a flair-like design) that would tell users in other instances from which instance the post came from.

With regards to moderation, here’s how: they are basically separate communities with content syncing between them. Suppose a user in north.star posts something offensive and against north.pole community rules. The mods in north.pole can block that post from appearing in the north.pole feed.

And here’s an unrelated gripe: there should be an instance-standard “ouster poll” for communities that are dead. With what I see right now in the influx of Lemmy users, many communities are dead and users are willing to revive them but they can’t because the moderators of those communities are already inactive and redundancy is a pain in “advertising” membership in Lemmy already. There should be like a poll of interested users where they would agree to “oust” the inactive mod (of course there’s also a qualification for “inactive”) and replace them with probably a democratically “elected” moderator.