Apparently it's supposed to reduce the number of ads the longer you use the website when you don't have any ad blocks on, but the number of ads doesn't seem to go down at all. The only ad block I have is for youtube specifically (got tired of the youtube red and election ads) and even after turning that off it doesn't change the amount of ads, there are still like 12 of them. So my question is, how is this new system supposed to work?

If you are receiving the message about it, you are blocking ads in some way.

Make sure that JavaScript is enabled for Gelbooru.com and youhate.us (which is an alias for Gelbooru.com - it's safe) and that no browser extensions are interfering with scripts. If the JavaScript isn't able to run, it will detect your browser as using adblock and load all of the ads, which means you'll receive both the normal ads and the anti-adblock ads - they'll double up.

If you have adblock fully disabled and the scripts load properly, you will see a maximum of about four ads per page. That will go down to zero pretty quickly.

Last time i disabled my adblocker i got malware adds and crazy junk. now im forced to disable the ad blocker otherwise it disables images but at the cost of getting malware and intrusive adds

The main vector for malware is through popup ads, which you can disable in your account options. The network we are using for pop-under ads this moment have not experienced that issue in at least a month. They are caught pretty fast and removed just as fast when we are made aware of it.

This website is usually fine on stuff like that, but yeah adblock is mostly a security thing for me when viewing websites I don't know. Or ones i know have weird ads. It's also a performance thing, sometimes pages are so full of animated ads that it completely ruins my performance. To the point where I have to restart all my tabs sometimes.