One of the main issues of running a federated Mastodon instance with little to no money and donations will not cut it.
Anyways, on Aug 1st their pricing is increasing to $50/year (150% increase!) and now I'm far less convinced that the value it offers is worth the money.
Users must selfhost data for decentralized socials to work. One big problem with running a Twitter-like social media, Twitter itself included, is that hosting UGC is just risk without rewards. Users don't pay for the bandwidth, advertisers don't like competing quality UGC(they're possibly even angry about social media that it keeps undermining their "creatives" investment), just no one pays for it.
So, a Mastodon alternative has to be selfhosted by default, and infinitely easy to set up for selfhost. "First, connect to your spare Pi with a global IPv4 address" is out of question. Multihop P2P likely won't work either.
You might be interested in Holos: "Holos turns your phone or computer into a full ActivityPub server. No big-tech hosting, no middleman reading your posts. A relay keeps your identity online 24/7 while your device stays in your pocket."
If it were a forum, then asking long-term contributors and moderators if they're interested in taking over is certainly an option. But it's not, there's likely no natural "hierarchy" that develops on a mastodon instance.
They could conceivably ask another established instance if they'd like to take over the old domain, though.
I've tried many times, there's decent apps too these days (Primal) but unless you are heavily into that topic or crypto it's not very interesting.
Same goes for a free software project actually.