I prefer good faith discussions please. I love the Fediverse and love what it can be long term. The problem is that parts of the culture want nothing to do with financial aspect. Many are opposed to ads, memberships, sponsorships etc The “small instances” response does nothing to positively contribute to the conversation. There are already massive instances and not everyone wants to self host. People are concerned with larger companies coming to the Fedi but these beliefs will drive everyday users to those instances. People don’t like feeling disposable and when you hamstring admins who then ultimately shut down their instances that’s exactly how people end up feeling. There has to be an ethical way of going about this. So many people were too hard just to be told “too bad” “small instances” I don’t want to end up with a Fediverse ran by corporations because they can provide stability.
At the end of the day, there are three ways to finance a server.
OP raised the concern that most people won’t donate. Does it really matter? I don’t think so; what matters is the total amount being donated, not who does it. If it is a concern, perhaps a subscription model could work, too, but the instance would need to show some service beyond what you’d expect from a Lemmy/Mastodon/Kbin/etc. instance.
I’m from the belief that “ethical ads” are a trap. 90% won’t be ethical, and the 10% left won’t pay you much. That’s how the cookie crumbles.
Another concern that I see is moderation, as it’s part of what makes an instance viable or not. The old Reddit model (let users moderate users) is surprisingly good in this aspect, as it allows the server owners to only address server-wide issues, but IMO it needs to be improved on (for example, letting admins and mods recruit users for specific tasks - e.g. I might trust someone to remove content, but perhaps not to ban users).
I agree with everything you’ve said. I think option 3 is the best and most reasonable option. A Freemium model makes the most sense.