I’m using it with firefox on android and it’s not sluggish at all…

I made a post about something that is related to this. https://feddit.de/post/1033788

The problem, though, will be that you and your users have to create communities on your server as there is no way for them to create one on let’s say lemmy.world. This makes your instance yet another general purpose reddit clone which people have to discover to join your local communities. Or your users have to create alt accounts on lemmy.world just so that they can create a community, and that doesn’t sound great either.

Ideally, the distribution would be the opposite of what you described and lemmy.world and lemmy.ml would be user servers, while there are many smaller community servers that focus on a particular topic, like infosec, memes and jokes, Q&A, tech, politics, NSFW and so on.