this post was submitted on 11 Jun 2023
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Asklemmy
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The thing is, Lemmy is decentralized. You don't need to have an account on an instance (server) to use that instance's "subreddits" (communities) - instances communicate their activity to each other automatically, so any instance will do (provided the instances haven't banned each other). It's just like email.
So it's pretty simple to just stop accepting sign-ups once an instance starts to become impractically large. Anyone can start an instance for just the cost of a domain ($10ish/year, or free if it's a subdomain of an existing website) and a server (that random computer you already have lying around will do just fine, for free). And a small instance can do fine on just donations and the good will of the operator.
Apropos of nothing, where are you finding domains for $10/year?
Check tld-list.com for price comparisons of different domain providers.