Example of using a multimesh renderer with the physics server api in godot.

multimesh_server_renderer.gd

extends MultiMeshInstance2D
export var instances := 10000
var physics_bodies := []

func _ready() -> void:
	multimesh.instance_count = instances	
	for i in range(multimesh.instance_count):
		# Create multimesh renderer
		var r := 600.0
		var s := 50.0
		var offset := Vector2(1000.0, 100.0)
		var p := Vector2(rand_range(-r, r), rand_range(-s, s))
		var t := Transform2D(0.0, p + offset)
		multimesh.set_instance_transform_2d(i, t)
		# Create physics body
		var physics_body := Physics2DServer.body_create()
		Physics2DServer.body_set_mode(physics_body, Physics2DServer.BODY_MODE_RIGID)
		Physics2DServer.body_set_state(physics_body, Physics2DServer.BODY_STATE_TRANSFORM, t)
		Physics2DServer.body_set_space(physics_body, get_world_2d().space)
		Physics2DServer.body_set_force_integration_callback(physics_body, self, "_body_moved", i)
		physics_bodies.append(physics_body)
		# Create shape
		var circle_shape := Physics2DServer.circle_shape_create()
		Physics2DServer.shape_set_data(circle_shape, 10.0)
		Physics2DServer.body_add_shape(physics_body, circle_shape, Transform2D.IDENTITY)
    
func _body_moved(state, index):
	multimesh.set_instance_transform_2d(index, state.transform)