I used to propose to create ZapRead as a decentralized data carrier on the a'la Blockchain system. Or should we go into a Federation like Mastodon?

What is the difference. Let's say we have two instances of ZapRead - ZapRead.com and ZapRead2.com. One of them belongs to Zelgada, the other to me. 

They work in general independently, but they can exchange data with each other. So if Zelgada thinks that my server is good and I think that Zelgada's server is good, our servers can talk and you can read other users' data from one server. Of course you can create your own service.

But what happens if my server is bad in the eyes of Zelgada? For example, will illegal content appear? He may refuse to download information from my server. 

This can be called Federation Decentralization or as others call it - Fediverse (Federation + Universe).

Contrary to appearances these are quite large networks. You may have heard about PeerTube, Mastodon, Diaspora or XMPP (Jabber). The biggest communication protocol is ActivityPub, which has at least 21 services like Mastodon (Microblog), PeerTube (Video Hosting), Pixelfed (Image Hosting), Nextcloud and many more.

I think it's a very good compromise between decentralization and legality, and additionally it can scale up, and our content can be shared with other blogging platforms (e.g. Write.as).