I'm not an expert of any kind, but I'm going to give my unasked-for advice anyways.
1. Paid moderation as the main solution probably isn't feasible. Even if you can find a way to monetize your project without annihilating your userbase, the amount of text will outpace the manpower you can afford.
2. Moderating is a crap job and there are never enough volunteers. Because there are never enough volunteers, you will feel forced to accept subpar volunteers and tolerate ones with annoying proclivities.
The solution to these problems is the same - you need to make the manpower you have go further (cover more text). First, minimize the need for moderation. That's a difficult task when your entire project is user-submitted text, but if you can prevent people from creating multiple accounts and ban or suspend people who generate disproportionate amounts of moderation, it'll help. Second, you need good moderation tools. Don't be reddit, where moderators rely on third-party tools and bots to manage their community. You need to provide
good tools to detect things that need moderation and not bother humans for things that don't. The more you can force-multiply your paid and volunteer moderators, the better you'll do.
p.s. I could ramble about moderation for a while. I'm in favor of suspending rather than banning users in most cases, and I've been toying with an idea that suspensions could be based on the amount of content and crap someone generates. You want content, and you want to keep the level of crap in that content low enough your moderation can keep up with it. If someone generates a lot of content and a little crap, you can just remove the crap and only give them a small suspension. If the proportion of crap to content someone generates is over whatever threshold you think is manageable for your platform, give them increasing-duration suspensions so they're generating less content and less crap - keeping your sitewide crap threshold down. If their crap-to-content ratio goes back below the threshold, or your sitewide crap load has gone down, you can start cutting down the duration on the suspensions. An algorithm could surely be devised for this and then you just set a 'crap threshold' platform wide and moderators don't have to do anything other than remove a post and the suspension is automatically applied.
There are exceptions, of course. Illegal content? Removal and warning if it's not too serious - ban if they do it a second time. Removal and ban if it's serious. Harassing other users? Ban. Crap of a type that will drive away your userbase? Warning, ban. You could probably devise a more strict algorithm for this, but when it comes to people who make a community worse by being there, being lenient with them is something you're doing for their benefit, not yours. Whether you choose to be lenient is up to you, but if you get it wrong they'll drive away the people who generate content and you'll be left with people who generate crap.