Even if ads were a thing, they would be instance specific, unless they just took the form of posts advertising things (much like Reddit has) which personally I find to be toxic as hell. How would that money make it to content creators?

Personally, I’d prefer to read posts from people who want to post them because they have something interesting to share or something they want to discuss, rather than people who are trying to maximize engagement because engagement = income. There’s plenty of other places to go if you want to be fed that kind of content.

I think the sweet spot was 20-25 years ago when we had special interest forums with tight-knit communities around specific topics. It would be nice to get more engagement on Lemmy in niche communities, but I’d argue the way to achieve that is to go to other places where that content is posted, and share links to content on Lemmy, as a way to spread the word. Part of the problem there though is recognition, and if people see links to 20 different lemmy instances, they won’t associate those with lemmy as a whole, they’ll see it as all disparate things, and I’m not really sure how to solve that.