I don't see us going down anytime soon, and at current user numbers I don't think there's going to be a major difference in moderation workload with the influx of users compared to what we already have, but it really is not great for decentralization. We already try delegating the majority of moderation to community moderators where applicable, where on a lot of other instances the admin teams seem to be more involved in addressing community reports on admin level as well. For the most part we're dealing only with instance level topics in the admin team and provide some additional tooling to improve report notifications to community mods. There are even various benefits from a moderation perspective when users are all local and not remote, as with federation a lot of signals that would allow various types of abuse are unfortunately lost. That said, I would still prefer if there were more stable and larger instances overall, while not having a single instance stand out as massively larger than any other one. Friendly "competition" is almost always beneficial for everyone involved.

lemm.ee being the second largest instance and the shutdown only being announced less than a month before is unfortunately also not something that gives people looking for a stable instance much confidence. I hope this won't scare too many users away from Lemmy and that most will just find a new instance in the Fediverse.

Instance moderation and moderation in general are unfortunately tasks that can be very challenging at scale, even with just a few thousand users, especially when dealing with drama. It's not really a surprise that there are somewhat frequently posts from larger instances looking for new admins, while older admins on the same instance are becoming less active. Even if people aren't exhausted from their involvement, their circumstances in life may change, or they may no longer be interested in Lemmy as a platform in general, leading to a number of reasons why admins may not be as active as it seems when looking at the list of admins in an instance sidebar. It's often a thankless job with a lot of things happening in the background to deal with spam, trolls and other issues, which most users won't even see when done right.