TwitchAdSolutions/proxy

This gives an overview of using proxies to avoid Twitch ads (without having to proxy all of your traffic ~ just the initial m3u8 per-stream).

proxy-server fetches the m3u8 (hopefully ad-free). extension contains a Chrome / Firefox compatible extension for sending the m3u8 request. proxy-m3u8 (uBlock Origin / userscript) scripts also work as an alternative to the extension.

Socks5

• Put your socks5 proxy info into proxy-server-info.txt and run proxy-server.exe (install Mono if using Linux/Mac and run via mono proxy-server.exe).
• Load the extension folder as an unpacked extension in your browser. Alternatively use proxy-m3u8 uBlock Origin / userscript scripts (ublock / userscript). (TODO: more helpful info).

VPN + VMWare

• Set up VMWare Workstation with Windows and your desired VPN.
• In your VM Settings under the Hardware tab select Network Adapter and change the Network connection to Bridged. This is to simplify connecting to proxy-server from your host. You can do it without bridged but it requires additional VMWare network configuration.
• Add proxy-server.exe to your Windows VM Firewall (or disable your Windows Firewall in the VM) and then run proxy-server.exe.
• Modify extension/background.js and change the IP to your VM IP (obtained via ipconfig inside your VM). If you're using proxy-m3u8 change the IP there.

NOTE: See "mixed-content" below.

VPS

• Run proxy-server.exe on your VPS which is hosted in an ad-free country (install Mono if using Linux and run via mono proxy-server.exe).
• Modify the url in extension/background.js to point to your VPS and load the extension folder as an unpacked extension. If using proxy-m3u8 scripts find the equivalent urls there and modify them where applicable (you'll likely need to fork to do this).

NOTE: See "mixed-content" below.

Notes

• Running the HttpListener on https has many convoluted steps. On localhost (127.0.0.1) Chrome / Firefox allow mixed content requests so there aren't any issues there. For other IPs (i.e. in the VPS/VPN example) you'll need to enable "mixed-content" (also known as "Insecure content") for twitch.tv or otherwise you'll get CORS errors.
• proxy-server.exe needs to be ran as Admin to listen on the desired IP/Port.
• Disable other Twitch ad blocking extensions / scripts as they may interfere.
• You will likely have to try multiple locations until you find something that works.
• If you're having problems use Wireshark (or similar) to make sure the m3u8 is being re-routed.
• To build proxy-server.cs yourself run proxy-server-build.bat. If you're on Mac/Linux build it with msbuild which should come with Mono or .NET Core (TODO: more helpful info).
• proxy-server should be visible over LAN/WAN assuming correct firewall settings, however if you wish to connect to it from another machine you'll need to edit the IP in extension/background.js.
• TODO: Provide an authenticated option to allow Twitch Turbo to be used to provide streams to non-Turbo users.

I would only really recommend using the info + code here as a starting point for building a more robust solution.