Yep we have allow/deny lists that turn federation on or off but whether an instance is trusted or not is another thing again. The concept is still crystalizing but the idea is we federate differently with trusted instances. So far the only concrete effects are

• Downvotes may or may not be accepted from un-trusted instances, depending on the community.
• When a PieFed account casts a vote we automatically use an alt profile when sending the vote to un-trusted instances.

In the future this could also be used for automatically accepting / denying moderation actions, community join requests and more.