I don’t think the ideas of Lambalicious work with Lemmy. What would sending the domain name only achieve? I assume it uses the same logic as Lemmy uses to find crossposts? Obviously it needs the whole address then.

Maybe instead of crawling automatically, the users need to click a button to look up discussions? (I have yet to install your extension, so I have yet to experience the workflow myself, sorry.)

Maybe link to the privacy terms of the default instances? In general, I think your approach is good. You don’t collect any data, the feature is 100% opt-in. A central relay/proxy is even worse than your current approach. People are obviously free to set up their own Lemmy/Mastodon server if they want a relay.