Originally posted by HienoKaveri:

So this just raises questions.. like.. WHY? We don't need every client playing server in the game, that's what servers are for. There needs to be an option in the ded server config to dedicate all simulation to the server, everyone benefits.

It's because Valheim runs a peer-to-peer driven server model which is hard-coded. I know it's insane, but it's true. I spended months to find a fix in the dll's. The devs would have to rewrite the code from the scratch to fix this issue.

Best advice I got for you is to google "valheim server lag" and you find not a fix but a small tweak that helps most. It will not remove the problem, just reduce it a bit. Thank me later.