Here there is a really REALLY good article I know about all of this! Improving Lag - Devforum
For your question, replicated storage is “Bad” because it has to load into the clients RAM. So essentially this is for things that need to be accessed from the client frequently such as VFX, so it doesn’t have to load in. A alternative is server storage, which is only loaded on the server. This prevents lag, and can still be switched in and out of the game, but assets will have to load for the client. Takes usually about 0.3 seconds? From my experience?
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