For a smaller instance I would always go with PieFed, it's much much easier to set up and to maintain, uses way less resources and has basically the same feature set.
Resources:
- small VPS like the smallest from Hetzner for example
- Linux installed on it
- Postgresql database
- Python 3 and pip installed
- domain to point to that server
- letsencrypt certificate to run it with https which is necessary to federate
I think that should be it.