Do users lose their accounts? Or they somehow migrate to another instance?
Your account would be gone. It is one of the main reasons I’m looking at hosting my own private instance.
As I understand it the source of truth would be the instance that the posts originate in, so would they be read only now?
Basically whatever you do, you always do it on a copy of the stuff that is hosted on your local instance, which then mirrors updates back to the original. If your instance closes, all the stuff you did until then will still be preserved (as it is in the local copies of all the other instances), but you won’t be able to comment or post anymore (obviously).
There’s currently no way to migrate accounts between lemmy instances. I know that this capability is one of the main feature requests, so hopefully the developers can add it at some point in the near future. Not only would it allow users to migrate if they have advanced warning that their instance will shut down, but it would make it easier to spread users out amongst the federated instances to avoid there being only a few “main” instances.