Something I realized on Mastodon years ago (well before the Twitter/X thing) is it quickly doesn’t matter so much to me how many active users a platform has. A platform is good enough if there’s some activity, and I like being there. Lemmy was already something I checked when I saw only a handful of new posts a day.
Anyway, that’s just my perspective. I’m not too concerned about downtrends of active users.
The federation issues seem to have been fixed by https://github.com/LemmyNet/lemmy/pull/4330