If the majority does not like the concept of karma, they will migrate to a platform that doesn't have it. You will not be doing anything better than a shitty company by forcing something that a large population of consumers doesn't like.
The issue with this kind of decentralisation is that it becomes very difficult to stop someone from doing something a population does not like.
Second option is difficult because there are too many instances. It is difficult to make good use of the funds as the popular instances will eventually enjoy too much profit whilst the smaller instances will be forced to shutdown due to lack of funds. This will lessen the decentralisation overtime.
The solution is a central service, something like Lemmy Fund Management or something, which regulates the funds accordingly. The managers will be selected by voting system (democracy). There are other solutions as well.