Large servers aren't a single world — a lobby, several game modes and maybe a survival server unite under one address. What makes this possible is a proxy: BungeeCord or its modern alternative Velocity.
How a proxy works
Players connect to the proxy address; the proxy routes them to one of the backend servers. Players teleport between servers via a command or a portal/menu — without ever disconnecting. Each backend is a separate Minecraft server running on its own.
vCPU planning — the most important rule
Every server in the network (proxy + each backend) uses a share of the processor as a separate process. Simple rule: roughly as many concurrent servers as you have vCPUs. 4 vCPU ≈ 4 servers (e.g. 1 proxy + 3 backends). For a bigger network, raise vCPU when creating a custom server.
Setup steps
When creating a custom server, use the BungeeCord option (on eligible packages). Manage the proxy and backends from the panel; each backend's server.properties must have online-mode=false and the proxy's config.yml must define backend addresses — the panel wires these connections for you.
Security note
Backends should not be exposed directly to the internet; players must connect only through the proxy. Otherwise someone could connect directly to an online-mode=false backend and bypass authentication. ArcadeServers provides this isolation automatically in network setups.
A network architecture is powerful but takes planning; if unsure, start with a single Paper server and move to a network as you grow.