As things stand, this game is unplayable. If you've ever seen any PvP vids you can see lag that makes the game run like a fucking slideshow where all you can do is pray that whatever button you press turns out to the correct one when the server catches up 5 seconds later.
My proposal is to do what many similar games have done and simply divide the server into continents or clusters of land. Where you sail across the ocean and hit a wall which switches servers. No one is even sailing across ocean atm anyway so it wont make a difference to most people.
I'm not sure if its within Loftars capability to add something like this but at this point I'm willing to suggest anything because the alternative is to abandon unplayable game.