Selfhosted
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The biggest issues that have come up so far are moderation and database optimization. The moderation issue is significant enough that large instances have considered shutting down, but the database optimization thing is what really drives me crazy. It is absurdly expensive for hosts considering we only have 35k MAU (just one of our midsized instances should be able to host the whole userbase for the cost they currently pay) and it has been largely deprioritized to the point that contributors who have tried to fix it have been told off.
It’s one thing if it’s just a couple of devs working on the project and trying their best, it’s an entirely different thing when a couple of devs are shutting out large numbers of contributors (frequently subject matter experts which they desperately need at this point) over relatively trivial issues. At this point a significant number of users have been lost because the devs have been largely unable to capitalize on previous waves on growth due to slow development.
Not to mention things like authorized fetch, which if fixed would ensure Lemmy/Mastodon interoperability and would effectively make Lemmy the go to place for groups on the fediverse. This would constitute a huge boost in engagement from the broader fediverse.
Because of all this Lemmy has an awful reputation even among the rest of the fediverse and particularly among people who have tried to contribute. A fork would probably be a significant improvement as far as brand perception goes.