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Fediverse sustainability
(lemmy.ml)
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Their problem is that they allowed themselves to become too big and unsustainable in the long run.
It's not just their problem. Even if every instance carefully load-balanced users with each other so that all instance were the same size and nobody was too big, there would still be a problem securing funding as the fediverse as a whole gets bigger.
Donations alone on the biggest instances aren't enough to keep the lights on, spreading out those users across other instances won't make more money suddenly materialize, in fact it might make money disappear faster, as smaller instances have a higher cost-per-user due to insufficient economies of scale.
If the instance becomes so big, that it depends on donations, then it is too big.
Exactly, I'm surprised how little I've seen this pointed out in this thread. There's essentially zero reason for instances to grow beyond basic sustainability.