I do think its possible even with atp that it can be walled off in a sort of gmail-like scenario. IE similar to how gmail conquered email by providing the service free at a loss, monopolizing it, then walling off anyone who didnt comply to their rules. not doing ads would maybe prevent this tho

That's why it's really important that federation spreads far and wide, and that nobody's allowed to become a major or main provider. Right now, we're obviously almost entirely on bsky's PDS, but in the interest of their expenses, that'll hopefully change in the coming years.