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.
I’d be surprised if the donations cover the cost of the servers. It’s pretty much run entirely on the goodwill of the server owner
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.