I think a proper reddit competitor will go the Mastodon/Pleroma route. The "value being dropped on the floor" isn't worth much in the first place if Reddit failed to monetize them - so why subjugate them in the first place? These people just want a dependable platform they control, and a federation/shared identity solution seems like the shortest path there.
There are indeed people investing and trying to find the right team (see: Meta[0]), but I think the best route is to let these users find a new platform. Forcing your idea of community on a group of people who like you for your interface design might not work as well as you think.