There's a good amount of literature about this (check the other comments), but you can vastly simplify this into two things you need to do:

1. Your service that retries should have some retry budget. This is a good place to be "smart", because you can reason entirely locally instead of turning it into a distributed systems problem. The best library I've seen for this was doing Exponential Moving Average of requests per second sent down that pipe (not counting retries) and only allowing 20% more requests per second as retries, total. Each individual request could be retried 3 times. This was critical as it bounds the additional load from retries.

2. Whenever a service retries but has to give up, the error it sends to its callers should never be retried. There has to be some agreement that that HTTP code will never be retried. This prevents the multiplicative factor of retry on top of retry, which is why those storms can generate so much load.

Everything else is nice-to-have, but those two alone should bound the total requests you get in a retry storm.

> 2. Whenever a service retries but has to give up, the error it sends to its callers should never be retried. There has to be some agreement that that HTTP code will never be retried. This prevents the multiplicative factor of retry on top of retry, which is why those storms can generate so much load.

Ooh, I like the idea of propagating "no retries" hints in the responses back upstream. Have you seen it implemented in the wild, or in public discussions about the practice?