diff --git a/nucypher/characters.py b/nucypher/characters.py
index 6792535a1..09f2b8b4a 100644
--- a/nucypher/characters.py
+++ b/nucypher/characters.py
@@ -200,6 +200,7 @@ class Character:
 
         self._dht_server = self._dht_server_class(node_storage=self._known_nodes,  # TODO: 340
                                                   treasure_map_storage=self._stored_treasure_maps,  # TODO: 340
+                                                  federated_only=self.federated_only,
                                                   ksize=ksize, alpha=alpha, id=id,
                                                   storage=storage, *args, **kwargs)
 
diff --git a/nucypher/network/protocols.py b/nucypher/network/protocols.py
index 3cec6de11..236c13443 100644
--- a/nucypher/network/protocols.py
+++ b/nucypher/network/protocols.py
@@ -58,7 +58,7 @@ class NucypherHashProtocol(KademliaProtocol):
         if header == constants.BYTESTRING_IS_URSULA_IFACE_INFO:
             from nucypher.characters import Ursula
             stranger_ursula = Ursula.from_bytes(payload,
-                                                federated_only=True)  # TODO: Is federated_only the right thing here?
+                                                federated_only=self.sourceNode.federated_only)  # TODO: Is federated_only the right thing here?
 
             if stranger_ursula.verify_interface() and key == digest(stranger_ursula.canonical_public_address):
                 self.sourceNode._node_storage[key] = stranger_ursula  # TODO: 340
diff --git a/nucypher/network/server.py b/nucypher/network/server.py
index 856cf1794..a0adf7963 100644
--- a/nucypher/network/server.py
+++ b/nucypher/network/server.py
@@ -30,7 +30,7 @@ class NucypherDHTServer(Server):
     capabilities = ()
     digests_set = 0
 
-    def __init__(self, node_storage, treasure_map_storage, id=None, *args, **kwargs):
+    def __init__(self, node_storage, treasure_map_storage, federated_only=False, id=None, *args, **kwargs):
         super().__init__(ksize=20, alpha=3, id=None, storage=None)
         self.node = kademlia.node.Node(id=id or digest(
             random.getrandbits(255)))  # TODO: Assume that this can be attacked to get closer to desired kFrags.
@@ -39,6 +39,8 @@ class NucypherDHTServer(Server):
         self.node._node_storage = node_storage
         self.node._treasure_maps = treasure_map_storage
 
+        self.node.federated_only = federated_only
+
     async def set_digest(self, dkey, value):
         """
         Set the given SHA1 digest key (bytes) to the given value in the network.