Mastodon, the open-source social media platform, is quickly gaining popularity as a significant player in online communication. But as it is open-source software that's self-hosted, how it makes money is not immediately clear.
Scroll down to find out how this platform makes money and sustains its operations without traditional revenue streams such as advertising or venture capital funding.
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What does Mastodon do?
Mastodon is a social networking platform that allows users to post messages of up to 1500 characters and follow other users. It operates similarly to Twitter and has a distributed model, meaning digital messages are sent out through the network of servers instead of being stored centrally. Users can set up their instances of Mastodon or join existing ones, allowing for a decentralized network of servers.
How does Mastodon work?
Mastodon works on a decentralized model, meaning anyone can set up their instance of Mastodon or join an existing one. The platform is built on a distributed model, meaning digital messages are sent out through the network of servers instead of being stored centrally in one place. To make it easier for users, each instance can federate with any other ones so that all posts can be seen regardless of the server they were created on.
How Mastodon makes money
Mastodon makes money through sponsorship, crowdfunding, and other value-added services.
Direct sponsorship
Mastodon receives donations from individuals and businesses who support the platform's mission. These donations allow Mastodon to maintain its operations without relying on outside investors. The platform's website has a donation page where users can contribute based on three sponsorship tiers: Rosegold, Gold, and Platinum. Sponsors get their names and logo listed on the Mastodon website, a backlink, and other perks based on their sponsorship tier.
Patreon support
Mastodon also generates revenue through Patreon, a crowdfunding platform that allows users to support projects they believe in. Mastodon's Patreon page allows users to pledge monthly donations for perks such as access to development discussions and the team's gratitude.
Other value-added services
Mastodon also generates revenue from offering value-added services such as Fediverse subscriptions, Community fees, Cloud storage, Elastic search fee, etc. Server administrators purchase these services to make their version of Mastodon more reliable and secure, while users benefit from a better overall experience.
Future growth engine
Mastodon's unique business model and decentralized structure could enable the platform to expand into new markets and generate additional revenue streams. For example, Mastodon could explore offering enterprise solutions for businesses or creating partnerships with other companies. The platform's community-driven approach could also be leveraged to create new revenue streams through community-based crowdfunding or monetization strategies.
Competitors
Mastodon's main competitors are traditional centralized social media platforms like Twitter, Facebook, and Instagram. These platforms generate revenue through advertising and data collection, while Mastodon relies on community support and value-added services. Other decentralized social media platforms such as Minds, Gab, and Steemit are competitors, but Mastodon differentiates itself through its decentralized architecture, community-driven approach, and focus on privacy.
