This sounds very cool. Is the data that is routed through the proxy private or can the proxy potentially be a man in the middle?

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In the current implementation the proxy is 100% a man-in-the-middle. That's why i'm putting in effort to get pubkey addressing in because that allows us to encrypt traffic to that pubkey. That will require some kind of handshake which i haven't gotten to yet. I think we can even ditch domain names + SSL certificates when that is implemented.

Then a proxy will only know the source ip + what the next hop is, but not the contents.

I think this would make your proxy truely a great addition to the nostr ecosystem