diff --git a/cabal.project b/cabal.project
index caee395..6c28a7b 100644
--- a/cabal.project
+++ b/cabal.project
@@ -58,8 +58,9 @@ source-repository-package
 source-repository-package
   type: git
   location: https://github.com/IntersectMBO/ouroboros-network
-  tag: 3c4433d05ec012af6d1a26e6b5e86665627c08c4
-  --sha256: sha256-Jemp6PlzISA+l1wdXV6MrIxaBpAxdrLLAlbkB7ZqF2Y=
+  -- from coot/dmq-related-changes
+  tag: adc2fa928d1856a8f0069190b7f698d2218f2110
+  --sha256: sha256-z1ftTOd3/EO6kjbIqLuRBtaGtkB1kNrpPOrF/q6oigM=
   subdir:
     acts-generic
     cardano-diffusion
diff --git a/dmq-node/app/Main.hs b/dmq-node/app/Main.hs
index c3d322f..4bab9cf 100644
--- a/dmq-node/app/Main.hs
+++ b/dmq-node/app/Main.hs
@@ -119,6 +119,7 @@ runDMQ commandLineConfig = do
 
     stdGen <- newStdGen
     let (psRng, policyRng) = split stdGen
+    policyRngVar <- newTVarIO policyRng
 
     -- TODO: this might not work, since `ouroboros-network` creates its own IO Completion Port.
     withIOManager \iocp -> do
@@ -212,7 +213,7 @@ runDMQ commandLineConfig = do
                                     dmqLimitsAndTimeouts
                                     dmqNtNApps
                                     dmqNtCApps
-                                    (policy policyRng)
+                                    (policy policyRngVar)
 
         Diffusion.run dmqDiffusionArguments
                       (dmqDiffusionTracers dmqConfig tracer)
diff --git a/dmq-node/src/DMQ/Diffusion/PeerSelection.hs b/dmq-node/src/DMQ/Diffusion/PeerSelection.hs
index 13add1d..b17bbaa 100644
--- a/dmq-node/src/DMQ/Diffusion/PeerSelection.hs
+++ b/dmq-node/src/DMQ/Diffusion/PeerSelection.hs
@@ -1,40 +1,118 @@
 module DMQ.Diffusion.PeerSelection where
 
-import Data.Set (Set)
+import Control.Concurrent.Class.MonadSTM.Strict
+import Data.List (sortOn, unfoldr)
+import Data.Map.Strict qualified as Map
 import Data.Set qualified as Set
-import Network.Socket (SockAddr)
-import Ouroboros.Network.PeerSelection.Governor.Types
-import System.Random (Random (..), StdGen)
+import Data.Word (Word32)
+import Ouroboros.Network.PeerSelection
+import System.Random (Random (..), StdGen, split)
 
 -- | Trivial peer selection policy used as dummy value
 --
-policy :: StdGen -> PeerSelectionPolicy SockAddr IO
-policy gen =
+policy :: forall peerAddr m.
+          ( MonadSTM m
+          , Ord peerAddr
+          ) 
+       => StrictTVar m StdGen
+       -> PeerSelectionPolicy peerAddr m
+policy rngVar =
   PeerSelectionPolicy {
-    policyPickKnownPeersForPeerShare = \_ _ _ -> pickTrivially
-  , policyPickColdPeersToForget   = \_ _ _    -> pickTrivially
-  , policyPickColdPeersToPromote  = \_ _ _    -> pickTrivially
-  , policyPickWarmPeersToPromote  = \_ _ _    -> pickTrivially
-  , policyPickHotPeersToDemote    = \_ _ _    -> pickTrivially
-  , policyPickWarmPeersToDemote   = \_ _ _    -> pickTrivially
-  , policyPickInboundPeers        = \_ _ _    -> pickTrivially
-  , policyFindPublicRootTimeout   = 5
-  , policyMaxInProgressPeerShareReqs = 0
-  , policyPeerShareRetryTime         = 0 -- seconds
-  , policyPeerShareBatchWaitTime     = 0 -- seconds
-  , policyPeerShareOverallTimeout    = 0 -- seconds
-  , policyPeerShareActivationDelay   = 2 -- seconds
+    policyPickKnownPeersForPeerShare = simplePromotionPolicy,
+    policyPickColdPeersToPromote     = simplePromotionPolicy,
+    policyPickWarmPeersToPromote     = simplePromotionPolicy,
+    policyPickInboundPeers           = simplePromotionPolicy,
+
+    policyPickHotPeersToDemote       = hotDemotionPolicy,
+    policyPickWarmPeersToDemote      = warmDemotionPolicy,
+    policyPickColdPeersToForget      = coldForgetPolicy,
+
+    policyFindPublicRootTimeout      = 5,
+    policyMaxInProgressPeerShareReqs = 0,
+    policyPeerShareRetryTime         = 0, -- seconds
+    policyPeerShareBatchWaitTime     = 0, -- seconds
+    policyPeerShareOverallTimeout    = 0, -- seconds
+    policyPeerShareActivationDelay   = 2 -- seconds
   }
   where
-    pickTrivially :: Applicative m => Set SockAddr -> Int -> m (Set SockAddr)
-    pickTrivially set n = pure
-                        . fst
-                        $ go gen (Set.toList set) n []
-      where
-        go g _ 0 acc  = (Set.fromList acc, g)
-        go g [] _ acc = (Set.fromList acc, g)
-        go g xs k acc =
-          let (idx, g') = randomR (0, length xs - 1) g
-              picked = xs !! idx
-              xs' = take idx xs ++ drop (idx + 1) xs
-          in go g' xs' (k - 1) (picked : acc)
+    hotDemotionPolicy :: PickPolicy peerAddr (STM m)
+    hotDemotionPolicy _ _ _ available pickNum = do
+      available' <- addRand rngVar available (,)
+      return $ Set.fromList
+             . map fst
+             . take pickNum
+             . sortOn snd
+             . Map.assocs
+             $ available'
+
+    -- Randomly pick peers to demote, peers with knownPeerTepid set are twice
+    -- as likely to be demoted.
+    warmDemotionPolicy :: PickPolicy peerAddr (STM m)
+    warmDemotionPolicy _ _ isTepid available pickNum = do
+      available' <- addRand rngVar available (tepidWeight isTepid)
+      return $ Set.fromList
+             . map fst
+             . take pickNum
+             . sortOn snd
+             . Map.assocs
+             $ available'
+
+    simplePromotionPolicy :: PickPolicy peerAddr (STM m)
+    simplePromotionPolicy _ _ _ available pickNum = do
+      available' <- addRand rngVar available (,)
+      return $ Set.fromList
+             . map fst
+             . take pickNum
+             . sortOn snd
+             . Map.assocs
+             $ available'
+
+    -- Randomly pick peers to forget, peers with failures are more likely to
+    -- be forgotten.
+    coldForgetPolicy :: PickPolicy peerAddr (STM m)
+    coldForgetPolicy source failCnt _ available pickNum = do
+      available' <- addRand rngVar available (failWeight failCnt)
+      return $ Set.fromList
+             . map fst
+             . take pickNum
+             . sortOn snd
+             . Map.assocs
+               -- avoid demoting local root peers
+             . Map.filterWithKey (\peer _ -> source peer /= PeerSourceLocalRoot)
+             $ available'
+
+    -- Failures lowers r
+    failWeight :: (peerAddr -> Int)
+                -> peerAddr
+                -> Word32
+                -> (peerAddr, Word32)
+    failWeight failCnt peer r =
+        (peer, r `div` fromIntegral (failCnt peer + 1))
+
+    -- Tepid flag cuts r in half
+    tepidWeight :: (peerAddr -> Bool)
+                -> peerAddr
+                -> Word32
+                -> (peerAddr, Word32)
+    tepidWeight isTepid peer r =
+          if isTepid peer then (peer, r `div` 2)
+                          else (peer, r)
+
+
+ -- Add scaled random number in order to prevent ordering based on SockAddr
+addRand :: ( MonadSTM m
+           , Ord peerAddr
+           )
+        => StrictTVar m StdGen
+        -> Set.Set peerAddr
+        -> (peerAddr -> Word32 -> (peerAddr, Word32))
+        -> STM m (Map.Map peerAddr Word32)
+addRand rngVar available scaleFn = do
+  inRng <- readTVar rngVar
+
+  let (rng, rng') = split inRng
+      rns = take (Set.size available) $ unfoldr (Just . random)  rng :: [Word32]
+      available' = Map.fromList $ zipWith scaleFn (Set.toList available) rns
+  writeTVar rngVar rng'
+  return available'
+