omewhere in Edinburgh, a man is drinking his own urine. Elsewhere, the story of a religious sect that commands its followers to use "butt plugs" plays out as a musical. In yet another room, a comedian sings the same song over and over for an hour.

It is shows like these that have sustained the welcomingly weird and ungovernable lore of the Edinburgh festival fringe. In recent years, though, the annual jamboree has been accused of becoming an increasingly commercially savvy entity. The radical experimentalism might just be intact, but does this now sit at the fringes of the fringe, rather than its centre?

Francesca Moody, one of the festival's superproducers, says that putting on a show here has become increasingly expensive. When she produced Phoebe Waller-Bridge's stage version of Fleabag in 2013, it cost about £10,000. By 2019, when she co-produced Richard Gadd's Baby Reindeer, it cost about £40,000. Putting on a one-person show now, she says, costs her closer to £100,000. The reasons for this, which have been well reported, include soaring accommodation costs, funding cuts and rising production costs. Some have argued that this might dial down the risky spirit on which the fringe was founded. The ethos was different when the financial risks were not as high, says Moody. "It was a space for messing around and building your craft, your sense of taste. As a producer or as an artist, you're working out what your voice is, and doing that over a number of years."

Artists and producers may now want more out of it too: to be scouted for the big-time with a transfer to London or, the ultimate dream, a television series in the mould of Fleabag or Baby Reindeer. Some high-profile productions have lined up transfers before their shows debut at the fringe. The Australian writer-performer Hannah Reilly's show Roleplay, about a woman who becomes a "slutfluencer" – which is also produced by Moody – already has a London transfer. As does Bigfoot Ripped My Dog In Half I Saw It, featuring a clown duo who cause chaos in their town after faking Bigfoot sightings. Elsewhere, the musical Bliss, which turns the traditional fairytale story on its head, will travel to London with the backing of the entertainment company ATG.

Moody believes the low-budget gems are still out there though. Comedian and fellow fringe veteran Rory Bremner agrees. Although he is a big name at the festival, with his latest show, Making an Impression, playing at the 1,000-seater McEwan Hall, he still likes to test out "work-in-development" material alongside new, unknown acts. "It's an opportunity to try stuff that I've written in the last couple of days," he says. These below-the-radar gigs take place in pubs or tents, sometimes containing as few as six people in the audience and often raising money for charity.

Moody thinks small-scale, risk-taking work will find a home at the fringe because people are "hungry" for it. "There is always going to be a weird, idiosyncratic little show in a back room or basement that people discover at the fringe. It's just about finding it."

So off I go on my very own theatrical odyssey to discover the "fringe of the fringe" and find an interactive act with a surprising degree of danger attached. Truthmachine plays out in an upstairs room of the city's Quaker Meeting House and is produced by the Australian company Counterpilot. A maximum of 12 people at any one time sign up to a 30-minute participatory show with a lie detector test at its heart. If that exudes Jeremy Kyle vibes, it proves much more thoughtful and transgressive than the gimmick it first appears to be. We are seated before our own voting machines for a warm-up, in which people are selected at random, put under a spotlight and asked to state "yes" or "no" to questions that range from the conceptual ("has capitalism failed?") to the icky ("have you ever touched yourself at night?"). It has an interrogatory feel, as exposing as a game of spin the bottle, but with strangers. I find myself wondering what might come next, and where the nearest exits are.

There is no time to escape because, before you can say "polygraph machine", one of us is chosen to be strapped up to one. It is hardly coercive – the lie detector test is the basis on which we have all convened – but I still grow edgy. A young woman is chosen and begins boldly answering questions that become more intimate while her heartbeat and other biological measurements are taken, giving us the probability of her telling a lie as a percentage. "Have you ever had a sexual dream about a family member?" she is asked. I feel everyone in the room wince. Then: "Have you had a sexual experience in public?" "Did you enjoy it?" "Was it your idea?" "Did you want to get caught?" There are existential inquiries too: "Do you think you will get what you want?" "Can everyone be forgiven?"

Things have turned a shade Black Mirror, it seems. This is not so much a playful game of truth or dare as a carefully orchestrated experiment around group dynamics and exposure. What are we prepared to share? What will we hide from others? What brings up shame or social inadequacy? I am surprised by how relieved I am not to be the person strapped up to the biometric sensors, but also how much my discomfort tells me about myself.

I come out blinking into the daylight and head to Succubus, a one-woman horror show that features a trigger warning of cannibalism. A debut written and acted by burlesque performer Georgina Collins (AKA Strawberry Duvall), it was inspired partly by her experience with doctors dismissing her medical symptoms as "hormonal issues". The play touches on medical misogyny but in dark, satirical ways, its social commentary as sharp-fanged as the female killer at its centre. Its conspicuously low-budget set design adds to its semblance of a B-movie feminist horror gore-fest, especially its props, which include a string of fake sausages representing human intestines.

Succubus is performed at the 60-seater Dexter stage at the Underbelly and is packed on the day I attend. Directed by Grainne Robson, it is not just an imaginative take on the notion of the monstrous feminine but finely crafted in its writing. Emily Ritchie and Zara Jayant, former theatre publicists, are its producers. "When we started the company, there were so many artists whose only resort was to wait for the door to open. We thought: 'Why not build the door ourselves?'" says Jayant. Succubus was financed on a profit-share model, its £6,500 budget raised through crowdfunding, a supper-club, a horror-themed film quiz night, a burlesque cabaret night and a raffle.

The night show at Summerhall Arts is another horror, in the shape of Bunny! It is the name of Craig Manson's drag alter ego, who emerges in a blond wig and off-the-shoulder gold dress with tufts of chest hair peeping from beneath. The self-produced show is gloriously scrappy but with a serious sting. Bunny is a struggling performer, desperate for a breakthrough after a decade of rejections and living in penury. In real life, Manson has been vocal about the state of arts funding in Scotland. In a blend of comedy and song, Bunny decides that the only way to correct the inequities is to kill off her competitors, beginning with an artistic director and graduating to famous actors and artists. It is fizzy entertainment, intelligently barbed.

So is Mother, Maiden and Crone at the Bedlam theatre, a loose modern-day adaptation of Macbeth by an Edinburgh-based drag troupe. Shakespeare is occasionally winched into a plotline involving the drama of a gay bar (a hen do for a bride called McBride), with a violent denouement on a dancefloor involving fatal quantities of foam and lube.

The show had a limited run in a hotel basement at last year's fringe and has been financed through fundraisers. The auditorium is filled this year and I feel as if I have been let in on a thrilling local secret.

The fringe is famed for discovering student talent, namely through the Edinburgh University group Footlights, but the show I plump for is off the beaten-track of university comedy societies. Moth And Dog Are Dying to Get Out is a play with enormous ambition, selected for the National student drama festival at Curve theatre, in Leicester, this spring. It features two teenage boys navigating same-sex desire for each other under the oppressive forces of homophobia, peer pressure and strong-man masculinity. Written by full-time student Aidan Monks and inspired by the writings of the poet Peter Scalpello, it stars Dylan Swain as Dog and Ben Stuart as Moth. They are schoolboys, one of whom has been "outed" as gay with a graphic image stuck on his locker (a photo of his "spread arsehole" from Grindr). It plays out in flashbacks and forwards, the narrative jagged yet emotionally tender. It is a heart-rending play, as lo-fi as Succubus in its production values but full of promise and led by two brave performances.

There are other shows tucked away in studio spaces that encapsulate the spirit of experiment, such as Letícia Rodrigues's autobiographical production about body size, 116 Grams: A Play to Lose Weight, which shocks with its expressive, sometimes harrowing, nudity. Thank You, F**k You and I'm Sorry (was there ever a more fringe-appropriate title?), is in the studio space at C Arts and is an intense, sung-through requiem that mourns a dead father. There is an audience of three on the night I attend but Welsh performer Jonathan Powell (also known as Jonny Forever) powers on, playing violin and guitar alongside the vocals. It is entirely self-funded and deeply personal.

The fringiest shows, I realise, are visible in plain sight if you look, and often nestling in the smaller spaces of established venues. Bunny! is in the modestly sized Anatomy lecture theatre at Summerhall. Another jewel of the festival is in an even smaller basement space in the venue, the former gents locker room at Summerhall.

QFWFQ, with Los Angeles performer Gregory Nussen, directed by Hannah Pilkes, is an enormously accomplished riff on Italo Calvino's novel, If on a Winter's Night a Traveller, with its own postmodern stops and starts, direct addresses and reflections on the construction of story. It is a small but exquisitely formed creature of the festival, full of experimental energy, intelligent inquiry and, most of all, an exciting mix of mischief and danger. Nussen leads one audience member to the toilet, makes phone calls and tells stories on stories. They are a natural comic but switch to a gripping dramatic tone when they begin their stories of coming out as non-binary, going to Jewish summer camp and then on a tour of the concentration camps in Poland. Nussen arrives at Zionism, the genocide in Gaza, the brutality of Israel's government before they interrupt themselves with another layer of story, another voice, which states that this is too dangerous a story to be aired.

As the winner of the best solo show at the 2025 Hollywood Fringe, it is not exactly an Edinburgh festival fringe discovery, but it is an amazing find from a punter's point of view, immaculately structured, surreal and labyrinthine. The invention and imagination makes me tingle. It is better than the work I've seen on bigger Edinburgh stages. The best of the fringe, found in this basement room, and stumbled across before noon. This is what the festival is all about.