Let's say I have 1000 possible labels for a custom field. Will that slow things down significantly?
Though the number of JIRA custom fields will affect JIRA's performance, it will always be a combination of several factors. Then there's certain custom fields (Free text field) that has more effect than the others. Have a read:
http://blogs.atlassian.com/2015/05/webinar-recap-five-secrets-jira-performance-scale/
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