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Sync is back on the Play Store, but it's not a third-party Reddit app anymore
(www.androidpolice.com)
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It doesn't. You can have local models.
Yes, it doesn't have to be the author's storage. Many, many apps implement it as adding the data to your Google Drive / Dropbox / whatever.
You can have local models, but the vast majority of people are going to farm that out to a 3rd party provider via API calls because it's the easiest thing to do.
Remember I said "It all depends on how you implement it".