I just stood up a selfhosted Invidious instance the other day, and I replaced YouTube ReVanced with Clipious (an Invidious client for Android) on my phone. No ads, SponsorBlock built-in, no need for a YouTube/Google account to create subscriptions, playlists, etc. And it's highly performant since I run it behind a reverse proxy with some custom caching configuration for things like thumbnail images, static assets, etc.

Clipious can also be installed on an Android TV (has an actual Android TV interface). I'm going to end up installing it on mine, but I'm also using SmartTubeNext at the moment, which does require a YouTube/Google account for subscriptions, playlists, etc, but does have no ads, built-in SponsorBlock, and a slew of other great features. I'll be keeping both around, since I do sometimes like to cast to my TV, and SmartTubeNext allows for that (Clipious does not, at least at this time).

Unless YouTube somehow starts dynamically splicing in ads as part of the actual video stream, there's always going to be a way to block ads, unless they do something pretty elaborate. But that's probably not worth the effort on their end to go that far, since the vast, vast majority of people won't know what to do to get around that, nor will they probably care enough to try. But I think it's clear that DNS blocking using services such as AdGuard Home, PiHole, etc, are going to become less effective over time.