This can’t be true. Lemmy world is over 100k users now. And it depends on how many are active.
But yes, it would be very beneficial to the entire lemmy network if many more instances could grow and get active communities. Right now it’s like every community is from Lemmy.world or Lemmy.ml. It’s stupid.
Edit: And I just checked out lemmy.world local… There are tons of posts that doesnt even federate to other instances. So the stability problems are pretty much affecting the entire fediverse now since they are so big.