To optimize the performance of a custom Daily video chat app with pagination, developers need to find the optimal balance between showing too few or too many video tiles per page, as this can impact both performance and user experience. The ideal number of video tiles per page depends on various factors such as device and network conditions, app nature, and use case constraints. By benchmarking different pagination options using Chrome DevTools performance monitor, developers can identify bottlenecks and optimize their configuration to achieve a smooth user experience while minimizing CPU usage, memory consumption, and rendering issues.