First off congratulations on creating a fantastic game, you deserve the 'overwhelmingly positive' reviews you're receiving. Unfortunately, as the devs know (based on sticky post on issues) there is a severe problem with lag in coop. I'd really suggest you make a unique sticky post for the issue where players can provide feedback, it's currently buried as an aside in the existing post.

Currently this issue has the highest votes on the bug list, feel free to vote it higher.
https://valheimbugs.featureupvote.com/suggestions/158504/multiplayer-sync-issues

I'm not sure about other parts of the world but In the US in suburban areas it's not uncommon for people to have DSL with a 7-10MBit down and 500Kbit up data rate. By it's nature DSL has low upload rates. The game seems to want to sit around 50KB/s up so some players are pegging their upload rate. You can see your network usage by pressing "F2" in game.

The game uses a distributed processing model. In a solo game the client is responsible for the physics and entity (e.g. NPC) control. With two clients each playing solo but using the same seed they share a world due to the procedural generation but have their own physics and entity control. The server architecture just ties them together and acts as a hub. Which ever client first uncovers a portion of the world they are responsible for it till the player moves and that area becomes idle or is handed off to a player remaining in that area. In addition It appears there's a queue structure for updates so if one player has a slow link all players are impacted. Further it appears this is made worse by proximity and total items or complex construction.

So if there are any work arounds that players can take while you're investigating or things you're planning to do it would be good to get this into the sticky. Things like:

• Run speed test on client to make sure you're getting proper bandwidth, DSL will resync at lower bit rates when there's noise on the line, typically have to power cycle router or get ISP to reset DSLAM switch to return to proper speed
  
• have player with worst network be further away from others (no clue if that helps, it's an example),
  
• Test network from client to server with something that can track packet loss. I use pingplotter (pingplotter.com), there's a free trial but I pay for mine.
  
• limit clutter on the servers (no clue if that helps, it's an example)
  
• shift to dedicated rather than player hosted server (this can help but if one player has slow (less than 60KB/s upload bandwidth it won't)
  
• Monitor network traffic on clients and kill any apps that can generate upload traffic (dropbox, chrome, onedrive, google photos etc).
  
• Use a wired connection if at all possible (really just do this, DSL routers suck at wireless)

Possible game change suggestions

• Add trash heap object where players can delete items from the world
  
• Add more aggressive abandoned item garbage collection in server
  
• Add option to cut client update rate in half. It would add a bit of jerkiness but for folks using DSL that should be enough to drop below the inherent transmit rate of DSL
  
• Change server queuing system so it just moves on if a player hasn't sent updates, no rill reason for the other players to lag in a non-competitive coop game.

Because the client/server traffic is so asymmetric it may be beneficial to have the person with the slowest link host (assuming their computer is up to it). The traffic from the server to the client is much less than client to server. This may work for 2 player coop but not for 3 or 4 as the outbound traffic for the host scales with the number of clients.

On the off hand chance a dev sees this. I will happily test/report on any development branch you'd like.

Richard (dev) posted a reply here: https://steamcommunity.com/app/892970/discussions/0/4939856028569039376/?ctp=4#c3106891514117216510
They're working on it. As a work around you could play coop if the person with the lossy network always plays a trailing support role. I was personally always in the lead with my group so my DSL was overly taxed, in a support role where other players are uncovering new territory the issue should be mitigated. That's at least a work around till a broader solution is in place.

Depending on your DSL carrier you may well be able to switch from residential to business for the same money and better bandwidth. For instance I was able to convert a CenturyLink 15mbit down/.5mbit up residential line to a 20mbit down/1.5 mbit up business line for the same monthly price. In addition the residential does occasionally impose data caps that the business line does not suffer from.

There appear to possibly be 3 major causes for lag/desync, inherent network limits from carriers like DSL, packet loss from bad networks and new recently discovered server side limit.

Note that different clients and servers are reporting different limits so possibly the installer tests the network limit and sets that value accordingly. If so then editing that value will not do anything and in fact really shouldn't be edited.

Thanks to Uzi for heads up, according to this reddit thread with fix: https://www.reddit.com/r/valheim/comments/lkea78/valheim_dedicated_server_lag/
there appears to be a 64KB/s cap on dedicated server traffic. The reddit post goes into some detail how to unpack the server DLL and force change that cap to something larger. If you try that please post comments in the reddit thread, not in this thread or in steam in general.

There is no guarentee the below recommendation will help, it may make things worse, proceed at your own risk.

Note that different clients and servers are reporting different limits so possibly the installer tests the network limit and sets that value accordingly. It appears for bandwidth limited clients, e.g. it's setting it at the tested limit which is not a great choice. It should be *below* the carrier bandwidth limit or it just triggers congestion.

One of the behaviors I see is long periods of time with 0KB/s send and receive. I suspect this is aggravated TCP congestion control. By setting the max data per second to higher than the network can handle it simply results in dropped frames and 3 second ACK timeouts. When I set the client limit to 50KB/s, lower than the DSL, things are quite a bit smoother with no more of the long 0KB/s windows. In retrospect this makes sense. So I'd suggest measuring your max upload rate and then set the m_dataPerSec to 75 or 80% of that rate.

Follow the directions in the reddit post above but on your PC. Make a back up of the DLL before proceeding. Start dnSpy, click file-open and select the valheim_assembly.dll libary in Valheim\valheim_Data\Managed folder. Search for m_dataPerSec, double click the returned string and then edit the value. It appears to default to 60KB/s (61440/1024). This is roughly the limit of DSL so if you're using DSL it won't help. If you're using a higher speed connection it may help. No guarentees. [/strike]

Here's a screenshot of the ediit: https://i.imgur.com/QBFn9Qh.png

If you screw it up you can simply refresh your local game files through Steam.