Originally posted by AdventChildVII:

as my town gets bigger an bigger ive noticed a slow decrease in fps so i went on to a singleplayer map and flattened an area the size of walmart and BOOM fps goes downnnn.
reddit says this about it.
https://www.reddit.com/r/valheim/comments/lqcr88/reason_behind_low_fps_and_huge_instance_numbers/

I think the general consensus is that 10000 instances is the max you should render. The issue is known by the dev's, and they are saying its an easy fix, so it should be better sometime in the near future. The issue is, is that the dev team is like 5 people so the timeline for a fix on top of the rest of the development is kinda sketchy.

You can check the instances you are rendering and calculating by pressing f2 at any time in game. IME, it doesn't apply to things you cant render, so I guess you don't need to worry about mining so long as your sufficiently far from your main base.