Mastodon has millions of users now, and it's a whole ecosystem of sites that have been running on user donations for many years now. The whole idea behind federation is that it's distributed. With Reddit or X, all the users are on the same site, so a single host has to be able to deal with that volume. However, with distributed systems no single server needs to grow too big. Most servers have a few thousand users on them, and hosting costs for that are pretty reasonable. Only a small percentage of the users have to chip in to keep things running.