Seems to me the biggest challenge for Mastodon is that the most high profile Twitter users explicitly want the centralisation it provides. They are going there literally to get on a sandbox and propagate their messages to as many millions of followers as they can. They will not understand the theoretical possibility of federation - they will see anything that introduces any kind of barrier or complexity in the way of them reaching their audience as an antifeature.
I think Mastodon, or whatever else tries to follow it, needs to bury the federation aspect as a technical detail and design from the ground up something that emphasises a unified system. It's not that easy when probably a large fraction of the people building it are introverted engineers who have difficulty even comprehending how someone can want to interact with hundreds let alone thousands or millions of other people. But as long as the fundamental concept of the system is in contention with what the core user base wants, it's hard to think how it will be very successful, at least at replacing a service like Twitter.
EDIT: speling