Discord displays server icons and avatars at genuinely tiny sizes most of the time, often 32 to 40 pixels in the server rail or a chat message. It would be reasonable to assume a small source image is good enough for a small display size, but Discord shows the same icon much larger in a handful of other places: server settings, the invite screen, and when a user clicks through to view someone's full profile. Uploading at 512x512 pixels means the icon holds up in every one of those contexts, not just the 40 pixel sidebar view most people see most often. A 128x128 upload, the accepted minimum, looks fine at the tiny sizes and noticeably soft the moment it's displayed any larger.
The circle crop is the part people miss most often. Every server icon and avatar gets masked into a circle regardless of what shape the source image is. If you design a square logo with text or details reaching into the corners, that content sits outside the circular mask and simply never displays. The safe approach is to treat the circle inscribed inside your square canvas as the actual visible area, and keep everything important, especially text, within that inner circle rather than the full square.
Server banners have two different accepted sizes for a reason
Discord's stated minimum for a server banner is 960x540 pixels, but recommending 1920x1080 pixels isn't just about caution. Larger, boosted servers unlock higher resolution banner display, and a banner uploaded at the smaller minimum can look visibly softer once a server reaches those higher boost tiers. Uploading at 1920x1080 from the start means the banner already matches the resolution ceiling regardless of which boost level the server eventually reaches, rather than needing to be replaced later. The 16:9 ratio also means the banner crops differently between desktop and mobile layouts, so keeping key text and logos within the middle horizontal band of the image, rather than pushed to the far left or right, keeps it legible on both.
The profile banner has a blind spot the server banner doesn't
A personal profile banner, the Nitro-only feature at 600x240 pixels, has a constraint that server banners don't share. Because it sits directly behind your circular avatar, username and status badge, the lower-left portion of the banner is partially covered by your own profile picture. A banner design that places its focal point in that corner competes with the avatar sitting on top of it. Shifting the visual weight toward the center or right half of the 600x240 frame avoids that overlap and keeps the design fully visible against the profile card layout.