Mortal Online, then you'll be glad to hear that developer Star Vault has isolated the problem: It's Gordo the Carniverous Sea Slug (as seen above) who is eating your packets and pings with wild abandon.
In all seriousness, the team has pinpointed the issue as related to the new armor models and is beginning to work on a solution. "We have made a very exciting breakthrough in how to handle player performance cost," a team update reads. "We have identified one big thing that does indeed add quite a bit of drop on client performance when the client sees many players."
In addition to fixing the performance drop, Star Vault announced that the territory control system is "progressing very smoothly" and that the team has added a new concept artist to flesh out the world and lore.
[Thanks to James for the tip!]