As everyone else has already said that’s a very good question, one that doesn’t necessarily have an answer, but Im not too concerned.

I’d point out (rather excitedly) that this really isn’t unlike how the Internet used to be up until the late 00s or very early 2010s and the rise of insta, FB, birdsite, digg and reddit. EVERYone had to shoulder hosting costs (unless you were on Geocities,Myspace then it was ads)

Yes, we’ve had bulletin boards and discussion forums since perl and CGI were a thing; each was self hosted at the hoster’s expense. Newsgroup and IRC servers too - THOSE all acted like “federated” instances - common newsgroups and chat channels would be synchronized and replicated from server to server EXACTLY how federated Lemmy/Kbin/etc. instances do it now.

And the infrastructure costs were a struggle then and they will be now. Back then to have a capable CGI forum host, or to colocate your server in someone’s data center it cost a lot - like decent hosting/co-loc plans started at $50/month and went up from there. Most hosting plans had steep bandwidth caps, think like 5GB included and +$5 per GB - if you hosted a popular site 40-50GB of traffic wasn’t abnormal. If you ran a newsgroup server you frequently had to futz with how long newsgroup msgs were retained to save disk space; like 48 hrs or less (then the data would be purged).

What you can get for $50/month THESE days is quite a lot more capable, and you can run a low retention instance for a lot less. Bandwidth and disk space are ludicrously cheap (at least compared to 10-15+ yrs ago). If your instance is low user, low community, and reasonable data retention/cloning, you could run Lemmy or a Mastodon or Calkey server on an old computer you have kicking around and host it from your home internet connection with a dynamic DNS mapping.

Obviously the big instances with gobs of users will struggle with how they pay for the server infrastructure - some will use crowdfunding, patrons, donations etc. Others will run ads, or subscriptions.

My home instance lemmy.ca is at 1400 users (as of right now) and is on a $25-30/month hosting plan and so far the site is doing just fine (or seems to be). I’d guess that a massive instance like lemmy.ml might be north of $1-200. But, if you think about it, all you need are 20 ppl to donate $10/month. I donate yearly to Wikipedia. As they discuss in this thread here https://lemmy.ca/post/599590 Mastodon gets $28k Euros a month in donations and pays for two? full time developers, so its not like there aren’t people donating to open source projects… and so far Fediverse servers are doing fine.