diff --git a/api_tests/prepare-drone-federation-test.sh b/api_tests/prepare-drone-federation-test.sh
index de9b7b84..32eb7513 100755
--- a/api_tests/prepare-drone-federation-test.sh
+++ b/api_tests/prepare-drone-federation-test.sh
@@ -1,13 +1,6 @@
 #!/bin/bash
 set -e
 
-export LEMMY_JWT_SECRET=changeme
-export LEMMY_FEDERATION__ENABLED=true
-export LEMMY_TLS_ENABLED=false
-export LEMMY_SETUP__ADMIN_PASSWORD=lemmy
-export LEMMY_RATE_LIMIT__POST=99999
-export LEMMY_RATE_LIMIT__REGISTER=99999
-export LEMMY_CAPTCHA__ENABLED=false
 export LEMMY_TEST_SEND_SYNC=1
 export RUST_BACKTRACE=1
 
@@ -35,52 +28,39 @@ fi
 
 killall lemmy_server || true
 
+echo "$PWD"
+
 echo "start alpha"
 LEMMY_HOSTNAME=lemmy-alpha:8541 \
-  LEMMY_PORT=8541 \
+  LEMMY_CONFIG_LOCATION=./docker/federation/lemmy_alpha.hjson \
   LEMMY_DATABASE_URL="${LEMMY_DATABASE_URL}/lemmy_alpha" \
-  LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-beta,lemmy-gamma,lemmy-delta,lemmy-epsilon \
-  LEMMY_SETUP__ADMIN_USERNAME=lemmy_alpha \
-  LEMMY_SETUP__SITE_NAME=lemmy-alpha \
-  target/lemmy_server >/dev/null 2>&1 &
+  target/lemmy_server >/tmp/lemmy_alpha.out 2>&1 &
 
 echo "start beta"
 LEMMY_HOSTNAME=lemmy-beta:8551 \
-  LEMMY_PORT=8551 \
+  LEMMY_CONFIG_LOCATION=./docker/federation/lemmy_beta.hjson \
   LEMMY_DATABASE_URL="${LEMMY_DATABASE_URL}/lemmy_beta" \
-  LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-alpha,lemmy-gamma,lemmy-delta,lemmy-epsilon \
-  LEMMY_SETUP__ADMIN_USERNAME=lemmy_beta \
-  LEMMY_SETUP__SITE_NAME=lemmy-beta \
-  target/lemmy_server >/dev/null 2>&1 &
+  target/lemmy_server >/tmp/lemmy_beta.out 2>&1 &
 
 echo "start gamma"
 LEMMY_HOSTNAME=lemmy-gamma:8561 \
-  LEMMY_PORT=8561 \
+  LEMMY_CONFIG_LOCATION=./docker/federation/lemmy_gamma.hjson \
   LEMMY_DATABASE_URL="${LEMMY_DATABASE_URL}/lemmy_gamma" \
-  LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-alpha,lemmy-beta,lemmy-delta,lemmy-epsilon \
-  LEMMY_SETUP__ADMIN_USERNAME=lemmy_gamma \
-  LEMMY_SETUP__SITE_NAME=lemmy-gamma \
-  target/lemmy_server >/dev/null 2>&1 &
+  target/lemmy_server >/tmp/lemmy_gamma.out 2>&1 &
 
 echo "start delta"
 # An instance with only an allowlist for beta
 LEMMY_HOSTNAME=lemmy-delta:8571 \
-  LEMMY_PORT=8571 \
+  LEMMY_CONFIG_LOCATION=./docker/federation/lemmy_delta.hjson \
   LEMMY_DATABASE_URL="${LEMMY_DATABASE_URL}/lemmy_delta" \
-  LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-beta \
-  LEMMY_SETUP__ADMIN_USERNAME=lemmy_delta \
-  LEMMY_SETUP__SITE_NAME=lemmy-delta \
-  target/lemmy_server >/dev/null 2>&1 &
+  target/lemmy_server >/tmp/lemmy_delta.out 2>&1 &
 
 echo "start epsilon"
 # An instance who has a blocklist, with lemmy-alpha blocked
 LEMMY_HOSTNAME=lemmy-epsilon:8581 \
-  LEMMY_PORT=8581 \
+  LEMMY_CONFIG_LOCATION=./docker/federation/lemmy_epsilon.hjson \
   LEMMY_DATABASE_URL="${LEMMY_DATABASE_URL}/lemmy_epsilon" \
-  LEMMY_FEDERATION__BLOCKED_INSTANCES=lemmy-alpha \
-  LEMMY_SETUP__ADMIN_USERNAME=lemmy_epsilon \
-  LEMMY_SETUP__SITE_NAME=lemmy-epsilon \
-  target/lemmy_server >/dev/null 2>&1 &
+  target/lemmy_server >/tmp/lemmy_epsilon.out 2>&1 &
 
 echo "wait for all instances to start"
 while [[ "$(curl -s -o /dev/null -w '%{http_code}' 'localhost:8541/api/v2/site')" != "200" ]]; do sleep 1; done
diff --git a/crates/utils/src/settings.rs b/crates/utils/src/settings.rs
index 6400264f..0a6859f9 100644
--- a/crates/utils/src/settings.rs
+++ b/crates/utils/src/settings.rs
@@ -135,16 +135,16 @@ impl Default for DatabaseConfig {
 #[derive(Debug, Deserialize, Clone)]
 pub struct FederationConfig {
   pub enabled: bool,
-  pub allowed_instances: String,
-  pub blocked_instances: String,
+  pub allowed_instances: Option<String>,
+  pub blocked_instances: Option<String>,
 }
 
 impl Default for FederationConfig {
   fn default() -> Self {
     Self {
       enabled: false,
-      allowed_instances: "".into(),
-      blocked_instances: "".into(),
+      allowed_instances: Some("".into()),
+      blocked_instances: Some("".into()),
     }
   }
 }
@@ -201,11 +201,11 @@ impl Settings {
       .to_owned()
       .unwrap_or_default()
       .allowed_instances
+      .unwrap_or_default()
       .split(',')
       .map(|d| d.trim().to_string())
       .collect();
 
-    // The defaults.hjson config always returns a [""]
     allowed_instances.retain(|d| !d.eq(""));
     allowed_instances
   }
@@ -216,11 +216,11 @@ impl Settings {
       .to_owned()
       .unwrap_or_default()
       .blocked_instances
+      .unwrap_or_default()
       .split(',')
       .map(|d| d.trim().to_string())
       .collect();
 
-    // The defaults.hjson config always returns a [""]
     blocked_instances.retain(|d| !d.eq(""));
     blocked_instances
   }
diff --git a/docker/dev/Dockerfile b/docker/dev/Dockerfile
index a2712f9f..d56a1fdc 100644
--- a/docker/dev/Dockerfile
+++ b/docker/dev/Dockerfile
@@ -56,7 +56,6 @@ RUN addgroup -g 1000 lemmy
 RUN adduser -D -s /bin/sh -u 1000 -G lemmy lemmy
 
 # Copy resources
-COPY --chown=lemmy:lemmy config/defaults.hjson /config/defaults.hjson
 COPY --chown=lemmy:lemmy --from=builder /app/lemmy_server /app/lemmy
 
 RUN chown lemmy:lemmy /app/lemmy
diff --git a/docker/federation/docker-compose.yml b/docker/federation/docker-compose.yml
index 72e6c5ce..ed662e44 100644
--- a/docker/federation/docker-compose.yml
+++ b/docker/federation/docker-compose.yml
@@ -38,20 +38,9 @@ services:
       - lemmy-alpha
   lemmy-alpha:
     image: lemmy-federation:latest
+    volumes:
+      - ./lemmy_alpha.hjson:/config/config.hjson
     environment:
-      - LEMMY_HOSTNAME=lemmy-alpha:8541
-      - LEMMY_DATABASE_URL=postgres://lemmy:password@postgres_alpha:5432/lemmy
-      - LEMMY_JWT_SECRET=changeme
-      - LEMMY_FEDERATION__ENABLED=true
-      - LEMMY_TLS_ENABLED=false
-      - LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-beta,lemmy-gamma,lemmy-delta,lemmy-epsilon
-      - LEMMY_PORT=8541
-      - LEMMY_SETUP__ADMIN_USERNAME=lemmy_alpha
-      - LEMMY_SETUP__ADMIN_PASSWORD=lemmy
-      - LEMMY_SETUP__SITE_NAME=lemmy-alpha
-      - LEMMY_RATE_LIMIT__POST=99999
-      - LEMMY_RATE_LIMIT__REGISTER=99999
-      - LEMMY_CAPTCHA__ENABLED=false
       - LEMMY_TEST_SEND_SYNC=1
       - RUST_BACKTRACE=1
       - RUST_LOG=debug
@@ -78,20 +67,9 @@ services:
       - lemmy-beta
   lemmy-beta:
     image: lemmy-federation:latest
+    volumes:
+      - ./lemmy_beta.hjson:/config/config.hjson
     environment:
-      - LEMMY_HOSTNAME=lemmy-beta:8551
-      - LEMMY_DATABASE_URL=postgres://lemmy:password@postgres_beta:5432/lemmy
-      - LEMMY_JWT_SECRET=changeme
-      - LEMMY_FEDERATION__ENABLED=true
-      - LEMMY_TLS_ENABLED=false
-      - LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-alpha,lemmy-gamma,lemmy-delta,lemmy-epsilon
-      - LEMMY_PORT=8551
-      - LEMMY_SETUP__ADMIN_USERNAME=lemmy_beta
-      - LEMMY_SETUP__ADMIN_PASSWORD=lemmy
-      - LEMMY_SETUP__SITE_NAME=lemmy-beta
-      - LEMMY_RATE_LIMIT__POST=99999
-      - LEMMY_RATE_LIMIT__REGISTER=99999
-      - LEMMY_CAPTCHA__ENABLED=false
       - LEMMY_TEST_SEND_SYNC=1
       - RUST_BACKTRACE=1
       - RUST_LOG=debug
@@ -118,20 +96,9 @@ services:
       - lemmy-gamma
   lemmy-gamma:
     image: lemmy-federation:latest
+    volumes:
+      - ./lemmy_gamma.hjson:/config/config.hjson
     environment:
-      - LEMMY_HOSTNAME=lemmy-gamma:8561
-      - LEMMY_DATABASE_URL=postgres://lemmy:password@postgres_gamma:5432/lemmy
-      - LEMMY_JWT_SECRET=changeme
-      - LEMMY_FEDERATION__ENABLED=true
-      - LEMMY_TLS_ENABLED=false
-      - LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-alpha,lemmy-beta,lemmy-delta,lemmy-epsilon
-      - LEMMY_PORT=8561
-      - LEMMY_SETUP__ADMIN_USERNAME=lemmy_gamma
-      - LEMMY_SETUP__ADMIN_PASSWORD=lemmy
-      - LEMMY_SETUP__SITE_NAME=lemmy-gamma
-      - LEMMY_RATE_LIMIT__POST=99999
-      - LEMMY_RATE_LIMIT__REGISTER=99999
-      - LEMMY_CAPTCHA__ENABLED=false
       - LEMMY_TEST_SEND_SYNC=1
       - RUST_BACKTRACE=1
       - RUST_LOG=debug
@@ -159,20 +126,9 @@ services:
       - lemmy-delta
   lemmy-delta:
     image: lemmy-federation:latest
+    volumes:
+      - ./lemmy_delta.hjson:/config/config.hjson
     environment:
-      - LEMMY_HOSTNAME=lemmy-delta:8571
-      - LEMMY_DATABASE_URL=postgres://lemmy:password@postgres_delta:5432/lemmy
-      - LEMMY_JWT_SECRET=changeme
-      - LEMMY_FEDERATION__ENABLED=true
-      - LEMMY_TLS_ENABLED=false
-      - LEMMY_FEDERATION__ALLOWED_INSTANCES=lemmy-beta
-      - LEMMY_PORT=8571
-      - LEMMY_SETUP__ADMIN_USERNAME=lemmy_delta
-      - LEMMY_SETUP__ADMIN_PASSWORD=lemmy
-      - LEMMY_SETUP__SITE_NAME=lemmy-delta
-      - LEMMY_RATE_LIMIT__POST=99999
-      - LEMMY_RATE_LIMIT__REGISTER=99999
-      - LEMMY_CAPTCHA__ENABLED=false
       - LEMMY_TEST_SEND_SYNC=1
       - RUST_BACKTRACE=1
       - RUST_LOG=debug
@@ -200,20 +156,9 @@ services:
       - lemmy-epsilon
   lemmy-epsilon:
     image: lemmy-federation:latest
+    volumes:
+      - ./lemmy_epsilon.hjson:/config/config.hjson
     environment:
-      - LEMMY_HOSTNAME=lemmy-epsilon:8581
-      - LEMMY_DATABASE_URL=postgres://lemmy:password@postgres_epsilon:5432/lemmy
-      - LEMMY_JWT_SECRET=changeme
-      - LEMMY_FEDERATION__ENABLED=true
-      - LEMMY_TLS_ENABLED=false
-      - LEMMY_FEDERATION__BLOCKED_INSTANCES=lemmy-alpha
-      - LEMMY_PORT=8581
-      - LEMMY_SETUP__ADMIN_USERNAME=lemmy_epsilon
-      - LEMMY_SETUP__ADMIN_PASSWORD=lemmy
-      - LEMMY_SETUP__SITE_NAME=lemmy-epsilon
-      - LEMMY_RATE_LIMIT__POST=99999
-      - LEMMY_RATE_LIMIT__REGISTER=99999
-      - LEMMY_CAPTCHA__ENABLED=false
       - LEMMY_TEST_SEND_SYNC=1
       - RUST_BACKTRACE=1
       - RUST_LOG=debug
diff --git a/docker/prod/Dockerfile b/docker/prod/Dockerfile
index 8f307bf6..c4f0358d 100644
--- a/docker/prod/Dockerfile
+++ b/docker/prod/Dockerfile
@@ -56,7 +56,6 @@ RUN addgroup -g 1000 lemmy
 RUN adduser -D -s /bin/sh -u 1000 -G lemmy lemmy
 
 # Copy resources
-COPY --chown=lemmy:lemmy config/defaults.hjson /config/defaults.hjson
 COPY --chown=lemmy:lemmy --from=builder /app/lemmy_server /app/lemmy
 
 RUN chown lemmy:lemmy /app/lemmy
diff --git a/docker/prod/Dockerfile.arm b/docker/prod/Dockerfile.arm
index bcf59003..a6e698f0 100644
--- a/docker/prod/Dockerfile.arm
+++ b/docker/prod/Dockerfile.arm
@@ -31,7 +31,6 @@ RUN addgroup --gid 1000 lemmy
 RUN adduser --no-create-home --shell /bin/sh --uid 1000 --gid 1000 lemmy
 
 # Copy resources
-COPY --chown=lemmy:lemmy config/defaults.hjson /config/defaults.hjson
 COPY --chown=lemmy:lemmy --from=builder /app/lemmy_server /app/lemmy
 
 RUN chown lemmy:lemmy /app/lemmy