There are a few main problems with performance which we are currently fixing:

• Websocket is inefficient. We are removing it and switching to HTTP API. https://github.com/LemmyNet/lemmy-ui/pull/1081
• There are some slow SQL queries which we need to improve. https://github.com/LemmyNet/lemmy/issues/2877
• There is no caching. This PR adds it, but will only work after rewriting to HTTP. https://github.com/LemmyNet/lemmy-ansible/pull/75

Federation isnt causing any performance problems, its all due to database reads from local users.