0) The actual intersting part of a new TLD can be growing reputation by post-facto taking away a domain without recourse in case of squatting. Instead of adversarial takedowns (which produce false positives as noted), let anyone challenge an inactive domain in the first year or two.

1) If they can figure out a mechanism for moving a domain from "assigned" -> "squatted".

2) Domain must match (or derive from) a verified identity - e.g. your domain is a hash/slug of your government ID. Makes squatting structurally impossible because you can't claim someone else's name / gov (Sign in with passkeys linked to a national ID).

3) Proof of human effort, reduced with time - require periodic renewal with proof-of-use (DNS TXt updates, through a flow hard to automate).

4) Kill speculative market - domains are non-sellable and non-transferable - always go back to the free pool, and stay there for 30 days mandatorily.

Some mix of these could be the right structure for a trule high-reputation, free domain.