Media hosting is the biggest expense, and there are services that make that significantly cheaper through sharing and deduplication.
A major instance can probably get by on a few hundred dollars a month. If it has, say, 100k active users, and 1% of them donate $5 a month, then not only is there enough to cover infrastructure expenses, but they can also put some aside in a rainy day fund, use it to expand hosting to other platforms (lemmy.world is made possible, at least initially, by donations to mastodon.world), or even pay instance-level mods.
Mstdn.social, a very busy Mastodon site, has 200k users and runs on a 32 core VPS with 128GB of RAM. Comparable unmanaged VPS packages go for around $300/month. After that, it’s all media storage.
Media hosting is the biggest expense, and there are services that make that significantly cheaper through sharing and deduplication.
A major instance can probably get by on a few hundred dollars a month. If it has, say, 100k active users, and 1% of them donate $5 a month, then not only is there enough to cover infrastructure expenses, but they can also put some aside in a rainy day fund, use it to expand hosting to other platforms (lemmy.world is made possible, at least initially, by donations to mastodon.world), or even pay instance-level mods.
Mstdn.social, a very busy Mastodon site, has 200k users and runs on a 32 core VPS with 128GB of RAM. Comparable unmanaged VPS packages go for around $300/month. After that, it’s all media storage.