I can see how you might think it is a kind of distributed federation, but I would argue that it is not.

Sidechain nodes still determine consensus and can be as permissionless as you want. You can still run a sidechain node just like Bitcoin. The sidechain node acts as your personal Sentinel, telling your Bitcoin node which transactions and blocks are valid.

The “federation-sounding” part is that Sentinels can also broadcast invalid transactions via Nostr. Instead of running a full sidechain node, miners and users can trust their own PERSONAL “federation” of users of any size and makeup, and trust the other nodes to tell them the bitcoin transactions to ignore.

This is fully optional for all parties and merely serves as a way for people to on board to a sidechain and participate without running a node for every chain.