Instead of ads Lemmy operators should be paid for hosting. Users should be asked for funding on a periodic basis (perhaps a small number of subscribers could fund the entire hosting for all.)

No one should assume this is all free forever.

I think it's reasonable for some instances, where there's good alignment. There was a thread I replied in a few days back around how/if TTRPG creators(who are mostly small enthusiasts themselves) could advertise in related magazines, and legitimizing that business wouldn't really pose a conflict for the hobby - that's how it was built in the first place! It's just a matter of finding a place for it and defining the technical solutions.

As a general "let in all the advertisers and promise riches for someone" measure, it does cause known problems. There is some freedom to figure out what works in a specific case here, it's not defined top-down since it isn't centralized.

Maybe something like DuckDuckGo's ads that respect DNT?

I think I'd rather have an optional membership to support the instance with perks or something. Not reddit gold though. Lemmy silver?

I'd be absoloutely fine with some unobtrusive side bar adds, its only when adds make it difficult to actually use the website that add block turns on.