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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.
Do they not understand that failing to fix this is going to kill the long term interest in the game? I would give you ten thumbs up if I could. My recommendation is to leave a negative review of the game that says how much you love it but that until they fix this aspect you will be leaving the thumbs down. That's what I did.
Will thank you for pointing in the general direction, but if you mean the DLL tweak for data rate, it seems that parameter is no longer there in this version of the game. I downloaded the dnSpy thingy and did as told, but it ain't there.
Running a server with around 10 people and frequently people complain of major lag, usually due to things being handed off to someone's computer/connection that is not up to the task. The distributed model is a neat idea and in theory works great, but dedicated servers should definitely have the option to keep all simulation on the server itself.