Lemmy

I've noticed that Lemmy feels more natural and less inflammatory. I stopped voting or commenting on Reddit so as to avoid giving them free content and curation. Not long after, I started seeing a huge uptick in inflammatory posts and comments, almost as if the algorithm was trying to bait me into participating again. Joke's on them though, it just pushed me to browse Lemmy even more.

The good side is really small, in comparison with the bad side.

If you want to amass karma, it's better to pump out low-effort content, that users see and upvote out of habit. If however you want to contribute with a community, high-effort content is generally preferable; specially reposts of highly upvoted posts. As such, even if karma promotes activity, it'll promote the sort of activity that ends as noise, for most people in the community.

The above will need to be addressed by moderators, who have a bigger pressure to implement rules against low-effort content. That means that non-mod users need to follow bigger rulesets, and increases the workload for the mods.

Karma reinforces echo chambers, as users with more karma are seen as "more authoritative". As such, it has a chilling effect on divergent opinions - because people don't want to lose that façade of authoritativeness. And this snowballs really fast because people voicing those divergent opinions will get lower karma, and be seen as less authoritative, thus the opinion is seen as less trustable than the one promoted by the echo chamber. (Note that this affects even fluff opinions like "it's fine to say 'animes'" or "I like pineapple on my pizza".)

In a certain defunct site, karma raised concerns about moderators misusing their mod powers to remove posts from other users, and then repost them to amass karma. Or users spamming a legit post with reports, through bots, to get rid of it. This can be generalise into "once you set up karma as a goal, some people will use shitty ways to reach that goal".

Specially assumptive = stupid moderators are prone to assume too much out of karma. Low karma should mean only "people in general don't like what this person posts/comments"; and yet those assumers often treat it as "low karma = troll" or "low karma = shitposter".

In another comment, you said:

But ir might be concerning that Lemmy doesnt incentive activity somehow .

I don't think that encouraging activity is "bad" (far from that!), but that karma is the wrong way to do it.