Do we need to read the list?

Performance makes sense, good point. Especially with the volume of bots.

Are you proposing a barrier that prevents bots in the first place? Some sort of filter so they don't even reach the point where they need be muted?

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Well, some relays already remove them with spam filters.

I'm suggesting client settings set to whitelisting schemes, rather than blacklisting.

Right

You then need to think about discovery, so that people can find more npubs to whitelist. Otherwise, they'll get bored.