https://news.ycombinator.com/item?id=33855250
it seems most instances hit scaling limits at 1k-30k signups per instance. 1k is more like consumer hardware, a consumer CPU and 32GB of memory type stuff, while using epyc and 128GB or 256GB of memory with enterprise SSDs behind it gets you to 30k.
Federation actually makes this worse because right now there is an all-to-all broadcast model. There is no concept of a "relay" node that is allowed to carry your posts to another, even if you are in an all-connected clique of N nodes you need to connect to N-1 nodes to exchange data, which means load increases with federation.
Obviously there are several pretty clear optimizations that shake out of just my description here, and I assume many smart people are working on it.
On the other hand... this is also where you bump into "everybody kinda wants different things". Do you want other pods to be able to "forge" messages from you? Do you want to sign every message you post (or have your pod sign it for you) to prevent forgery? Do you want to have any ability to ever yank a post back out of the void, or are you comfortable with the "once it's out there, it's out there"?
A lot of people have tacitly different answers to these questions and have never really had to think about it because Reddit provided a one-size-fits-all answer for them, just like the problem of moderation between federated pods. Like, what if you have a great contributor on your pod but he's completely a shithead on politics on some other pod, and people start looking to defederate your pod unless you take care of them? Reddit simply solved this by establishing some global baselines and if you don't like it tough, don't post on reddit.