We do also have residential peer proxies available - you're right to have ethical concerns as there are bad actors out their that effectively build botnets and spread malware to get their nodes but the industry has developed a lot over the last few years and there are numerous companies, including ourselves, which have pretty strict ethical guidelines. Their are three main ways to ethically source real residential nodes:
1. Direct payment to peers for traffic sent through their devices. There are several networks like EarnApp, Honey, Pawns and others where people can sign up and earn money for bandwidth sent through their devices. We liaise with these networks to add nodes to our pool.
2. Quid pro quo with peer through providing free apps in return for the ability to route traffic through their devices. We don't currently engage in this method but we are planning on doing so within the next 12 months through a free VPN - the important thing here is that peers have to understand what they're signing up for in return for the free service - as long as you're upfront, then it is my belief that their is informed consent and it is therefore ethical; there is often a good value proposition to the customer in these cases i.e spend $7 a month on a paid VPN service or get a free one in return for exchanging a small amount of bandwidth which has zero marginal cost.
3. Offer SDK to developers to monetize applications - this is pretty common and while it is similar to 2. - the ability to distribute the SDK to various developers makes it easier to get a large number of peers online. Again though, its important app developers provide notice of this to their users and most reputable SDK providers have strict guidelines and mandatory screens that must be shown to end users prior to registering them as a residential proxy node.
There is also a lot of other things that are involved with making an ethical network - a big thing is to just signal that bad actors and criminals aren't welcome on your network. This is usually done by banning certain domains; for example, we ban all .edu and .gov domains as well as most banking/finance websites + are a member of the Internet Watch Foundation and block their listed domains. This has stops bad actors from using our proxy network for evil + protects peers in the network from bad activity going through their devices.
Happy to answer any other questions if you have them :)