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So how are instances defederated?
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This is quite a hard question to follow, but I will try to answer what I think you are saying. Each instance is it's own site. On my instance, the server connects to other instances and copies the posts and comments across to my instance.
Every instance has at least one admin, and they have control over who their own instance federates with. There is no central server and no central decision making. If lemmy.world wants to defederate from lemmyf.uk, they can. If beehaw wants to defederate from lemmy.world, they can.
A user from lemmy.world will not see posts or comments from lemmyf.uk. A user on beehaw will not see posts from lemmy.world. Or vice versa. However, if there is a post on lemmy.ml, a user on lemmyf.uk might comment on it. Users on lemmy.world will not see it, but users on other instances will see it. A lemmyf.uk user and a beehaw.org user might have a conversation on a post on lemmy.ml, all the while lemmy.world users will not see it.
Basically, every instance decides for itself (it's admins decide), and any content from defederated instances will not be copied to that instance. But they will be copied to other instances just fine.
At the moment, virtually every lemmy instance is either funded through donations, or from the pocket of the person running it.
But what about advertising I shouldve clarified that, does each instance have their own independant income through ads?
I'm not aware of any having adds currently. Just donations.
Sync has ads from what ive read from comments I use jerboa so I dont see any either. I was going to use sync but I couldnt agree with their privacy policy.
The ads in sync are not part of any instance, it's just the sync developer putting them in his app to make money. If an instance admin manages to get ads into their instance, I imagine most users would move to another instance.
Ah ok I better not bash sync too much I hear their dev team are mods in some instances but haveing said that why would anyone put themselves at the mercy of ads when theres ad free alternatives?
To support the instance. Hosting costs money. Having an advert toggle could be a good way of making it work without forcing it on users.
On the sync adds - it makes more sense for instances to have adverts as they have ongoing costs. That said, some apps might also have backend infrastructure they proxy through. They also have a right to make money off their work, if users don't like them they can switch apps.