Yes but only if you have a lot of users eventually. So your server can serve up hundreds of requests from several different federated servers (eg: maybe some content from beehaw, other content from lemmy.world) instead of 1 server (maybe lemmy.world) having to serve that same content 100 times from all over the place.
If its only you and no other users, then not.
You font make any communities and clear the database of cached content thats no longer needed after reasonable amount of time (as its hosted on the other instances the data came from) eg: PGPASSWORD=password psql --dbname=database --username=username --command=“DELETE FROM activity WHERE published < NOW() - INTERVAL ‘7 days’;”
Does stop top month or top year since you dont have data going that far back. Obviously if you keep it then you need more disk space, memory and so on and so on.