

You can consider using flagship instance as a way to fund the development. It’s not like they force you to use flagship instance.
There always third-party instance or self-host as an option.
I’ve seen multiple fediverse project dead before arrival, as the dev working on other job(s) for living. Heck, that’s also the same reason why most of fediverse project are from the West, a lot of people who lives in a country with low paygrade (including me) are not able to dedicate their time for FOSS project.
Misskey is probably the only fediverse software that actually allows admin instance to put ads.
Its flagship instance, misskey.io (which also the second/third (?) biggest instances on fediverse), use freemium scheme for running the server. They have to do this as they have 600K users, with 20K visits per day. Their paid tier upgrades are mostly adding non-essentials stuff, such as drive capacity from 5GB to 30-100GB, profile and avatar decoration (similar to Discord stuff), or more webhook. They runs community ads, from indie games, vtuber promotion, comic release, or local art event. They also have one corporate backer, Skeb.jp, which an art commissioning platform.
Not saying that all instance should do this, but it could be a great learning.