How to use safe mode to determine what third party software is causing issues?

Two things you can do:

(1) Run Etrecheck, post the results (report) here with the Additional text button below. This will provide a lot of information (anonymously listed) about your configuration and what you have installed so people reading the forum can help you figure out what the culprit is.

(2) You can make multiple backups and test them with a few random restores. I suggest one with Time Machine and one with a "clone" program (CCC, SuperDuper, etc.). Then you can restore your Mac to factory settings

Erase your Mac and reset it to factory settings - Apple Support

... which will make it behave like a new Mac on its first boot up. At that point, use Migration Assistant (called Setup Assistant when used on first boot up) to migrate over your user account and files but NOTHING ELSE, no settings, no software, nothing else.

Then verify that your Mac boots and runs properly. If it does not, then because there is only Apple software installed at this point, you have a hardware issue. (Some hardware issues go away on Safe Boot, as Safe Boot disables certain graphics hardware or firmware.)

Assuming no hardware problems, then install from scratch one or two software packages at a time, and reboot and retest after each. If the problem returns, you have found the culprit. Then uninstall it or repeat the sequence above but skip that software install.

I would definitely follow the good advise from @steve626

Only to add and if any of the below applies to this computer

You have a starting point

PS : if any of these applications are installed, they will show up in the suggested Etrecheck report

Useless Applications / Services 

There are 3 Categories of Third Party Software / Services that are baffling to me.

Why some users insist on installing and using the below software. 

In no special order 

Commercial VPNs 

They may not be what one believes they are doing for the computer and what they actually are doing behind the scenes 

https://gist.github.com/joepie91/5a9909939e6ce7d09e29

Third Party Security Software 

There are no known Windows-like Viruses in the wild that self replicate and affect macOS, because of the underling UNIX  Foundation and Permission Limitation. 

The Operating System resides in a Sealed and Read Only Volume that cannot be opened by the User nor by Third Party Applications.

The Only thing this Antivirus software is protecting is the Bank Account of the Developers and for zero return to the User aside from the problems this software creates.

Security. Built right in

Mac app security enhancements

The Built in Security  is all that is required to protect the computer.

Protecting against malware in macOS

Third Party Disk Cleaners / Optimizer 

Any Third Party Applications that will interfere with the normal operation of the OS,  is an invitation for disaster. 

Certain Applications maybe available on the Apple Apps Store - this only means the Developer is prepared to pay Apple a percentage on each sale. 

What the Application may do to the computer is up to the User to check this out before purchase

To put the Third Party Disk Cleaner / Optimizer in context and the damages it may have or has already done.

This type applications can or will Muck Up your User Account ( Home Folder ) of this machine.

It does not touch the Operating System itself unless you consider your User Account ( Home Folder ) as part of the Operating System.

The Operating System is hosed

Safe Mode just turns all third-party system extensions off. There is no way to determine which is the culprit unless you only have one installed.

Uninstall all of them using the developer’s uninstaller or instructions.

If the Mac then runs normally, and you had more than one, you could try installing one at a time and test. I have seen reports of uninstalling the extension and reinstalling stopped the panics, but only rarely.

As noted, EtreCheck can show you what you have installed.