Paper ships with sensible defaults. These are the settings worth changing on a busy server. Files live in config/ (Paper) and the server root (spigot.yml, bukkit.yml). Stop, edit, start.
config/paper-world-defaults.yml
chunks:
max-auto-save-chunks-per-tick: 6
prevent-moving-into-unloaded-chunks: true
entities:
spawning:
per-player-mob-spawns: true
despawn-ranges:
monster: { soft: 30, hard: 56 }
environment:
optimize-explosions: true
treasure-maps:
enabled: false
hopper:
disable-move-event: true
ignore-occluding-blocks: true
tick-rates:
mob-spawner: 2
grass-spread: 4
container-update: 3
collisions:
max-entity-collisions: 2
fix-climbing-bypassing-cramming-rule: true
misc:
redstone-implementation: ALTERNATE_CURRENT
spigot.yml
world-settings:
default:
entity-activation-range:
animals: 24
monsters: 24
raiders: 48
misc: 8
merge-radius:
item: 3.5
exp: 4.0
mob-spawn-range: 6
bukkit.yml
spawn-limits:
monsters: 50
animals: 8
water-animals: 3
ambient: 1
ticks-per:
monster-spawns: 2
animal-spawns: 400
What these do
Fewer mobs spawn and they despawn sooner; far-away entities are ticked less; hoppers do less work per item; redstone uses a faster engine; grass and spawners tick less often. Players notice none of it, but your TPS does.
Do not copy every "optimisation guide" on the internet blindly; some settings break farms. Change a few, watch, change more.