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 In that case different algorithms for distance could be used instead of just geographical location. 
 Yes. And the main point would be that one npub has to commit for a locality. Moving could be possible, but would have opportunity costs attached: you loose access to the old locality. And moving too often could be considered spammy.

This could be a metric for a public reach equilibrium. An elastic system.

Certainly always overridable by the clients (e.g. by fellowship).