Exactly correct. The federated model is what makes this possible. A centralized service like Twitter has huge operational costs to serve their audience. But by

Exactly correct. The federated model is what makes this possible. A centralized service like Twitter has huge operational costs to serve their audience. But by distributing the load on thousands of independent operators like Mastodon does, each instance keeps their costs low and can easily be funded by their users. It has a local community feel, not a corporate mass-appeal feel.