Game runs alright until you build a ton of stuff, A server with 7+ people and everyone in 1 area and big buildings, yeah fps drops, used like 5-10% of my 6800xt, and Vulkan has a memory leak and uses more and more vram until it lags so bad or crashes but does perform slightly better for a while.

I got a dual cpu 16 core Xeon server, I host 2 Valhiem servers, Without the compression mod, the servers run like crap with a lot of stuff built, sorta like internet lag but the game has a hard limit and with 7+ people running around that limit is hit fast, none of the so called fixes fixes anything other than the compression mod, adds a little bit more cpu load but worth it.

Game is far from perfect, but with a few people it should be alright for the most part, I recommend not building so close to each other for the best fps anyway.