Pretty sure that's the idea. Each "server" is a "universe" of players (e.g. a CKD server), and the planetary coordinates are used as the seed to randomly generate the planets. The server only saves changes that are made to each set of coordinates, so the saved data is comparatively very small.
There are potentially millions (billions?) of planets in there, so you can, theoretically, never have any of your players meet and all play solo on the same server by simply playing on different planets in any old random part of the galaxy. Feel free to have your own home planets somewhere out there in the universe that other people don't even know about and have a near zero chance of ever finding unless you mark it for them.
There are of course ways of getting together easily too, as well as chat modes and tabs like Universe/System/Planet/Team/Friends, etc. You could think of each server as being like a private MMO server, but I don't know how many players you could actually run off of one box.
The full details of it all aren't out but that's the gist of it from what I've seen.
If the CPU requirements aren't too high I'd happily run a server for everyone. I've got quite a decent sized upload bandwidth (5 MB) and a small silent box that I used to run Terraria server on 24/7. I'm hoping with this game to actually get everyone playing it together from day 1 this time.
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