Same as reddit, every instance can choose to just start monetizing if they wish and even stop being part of the fediverse. If they get too big and decide to do it then it’ll be a blow to the content on all the fediverse. That’s why it’s better to spread out a bit more to avoid one big instance controlling the whole.

First of all we had big instances die. Like feddit.de and kbin.social That always damages a big part of the network. If things were distributed more evenly, it’d be a smaller chunk of the fediverse that vanishes in such a case.

Then, being way bigger than the others gives someone disproportionately bigger power. If you’re not having any issue with that, you might as well join Reddit. And the first big Lemmy instance (lemmy.ml) arguably explots(?) that. They’ll act against you once you say something negative about communism, China, … and that’s not okay to do. Now we have lemmy.world as the biggest instance and it’s way better. But still I’ve also read people complain about their moderation practices.

If we have some dominating entities, they’ll disproportionately shape the tone, atmosphere and behaviour on the whole network. We might or might not want that.

In the end I think what actually happens should reflect the vision and the capabilities of the software. The Fediverse is supposed to be an interconnected network of instances. If the technology works as intended (and the vision behind the Fediverse is correct) I expect that to manifest in the way it actually grows. If it favors one or two large instances, we either might have an issue with the technology/software and it’s not able to truly achieve it because of some shortcomings. Or the idea behind all of it might not be more a theoretical concept than viable in the real world.

If we want to look at it in the end-state, we have email as an example. That’s a super old federated standard and now also dominated by a few big players. It’s still possible to host your own email. But not really fun because of lots of complications that come with it.

[Edit: The dynamics could also be viewed as competition succeeding. If someone does their job well, they’ll naturally attract people?! And that’s not necessarily a bad thing. I’m not sure what to make of this. And I’m not sure if that’s the dynamics at play here in the first place.]

If the LW admins decide to wrongfully ban someone, that person is banned from a lot of communities and from interacting with a lot of people. In a more equal network, each individual bad decision has a smaller effect on the whole