diff --git a/waku/node/peer_manager/peer_manager.nim b/waku/node/peer_manager/peer_manager.nim
index 12c6a084f7..6e5a9c6976 100644
--- a/waku/node/peer_manager/peer_manager.nim
+++ b/waku/node/peer_manager/peer_manager.nim
@@ -399,6 +399,24 @@ proc onPeerMetadata(pm: PeerManager, peerId: PeerId) {.async.} =
   asyncSpawn(pm.switch.disconnect(peerId))
   pm.peerStore.delete(peerId)
 
+proc connectedPeers*(pm: PeerManager, protocol: string): (seq[PeerId], seq[PeerId]) =
+  ## Returns the peerIds of physical connections (in and out)
+  ## containing at least one stream with the given protocol.
+
+  var inPeers: seq[PeerId]
+  var outPeers: seq[PeerId]
+
+  for peerId, muxers in pm.switch.connManager.getConnections():
+    for peerConn in muxers:
+      let streams = peerConn.getStreams()
+      if streams.anyIt(it.protocol == protocol):
+        if peerConn.connection.transportDir == Direction.In:
+          inPeers.add(peerId)
+        elif peerConn.connection.transportDir == Direction.Out:
+          outPeers.add(peerId)
+
+  return (inPeers, outPeers)
+
 # called when a peer i) first connects to us ii) disconnects all connections from us
 proc onPeerEvent(pm: PeerManager, peerId: PeerId, event: PeerEvent) {.async.} =
   if not pm.wakuMetadata.isNil() and event.kind == PeerEventKind.Joined:
@@ -412,6 +430,17 @@ proc onPeerEvent(pm: PeerManager, peerId: PeerId, event: PeerEvent) {.async.} =
     direction = if event.initiator: Outbound else: Inbound
     connectedness = Connected
 
+    ## Check max allowed in-relay peers
+    let inRelayPeers = pm.connectedPeers(WakuRelayCodec)[0]
+    if inRelayPeers.len > pm.inRelayPeersTarget and
+        pm.peerStore.hasPeer(peerId, WakuRelayCodec):
+      debug "disconnecting relay peer because reached max num in-relay peers",
+        peerId = peerId,
+        inRelayPeers = inRelayPeers.len,
+        inRelayPeersTarget = pm.inRelayPeersTarget
+      await pm.switch.disconnect(peerId)
+
+    ## Apply max ip colocation limit
     if (let ip = pm.getPeerIp(peerId); ip.isSome()):
       pm.ipTable.mgetOrPut(ip.get, newSeq[PeerId]()).add(peerId)
 
@@ -494,7 +523,7 @@ proc new*(
     error "Max backoff time can't be over 1 week", maxBackoff = backoff
     raise newException(Defect, "Max backoff time can't be over 1 week")
 
-  let outRelayPeersTarget = max(maxRelayPeersValue div 3, 10)
+  let outRelayPeersTarget = maxRelayPeersValue div 3
 
   let pm = PeerManager(
     switch: switch,
@@ -560,46 +589,6 @@ proc addServicePeer*(pm: PeerManager, remotePeerInfo: RemotePeerInfo, proto: str
 
   pm.addPeer(remotePeerInfo)
 
-proc reconnectPeers*(
-    pm: PeerManager, proto: string, backoff: chronos.Duration = chronos.seconds(0)
-) {.async.} =
-  ## Reconnect to peers registered for this protocol. This will update connectedness.
-  ## Especially useful to resume connections from persistent storage after a restart.
-
-  trace "Reconnecting peers", proto = proto
-
-  # Proto is not persisted, we need to iterate over all peers.
-  for peerInfo in pm.peerStore.peers(protocolMatcher(proto)):
-    # Check that the peer can be connected
-    if peerInfo.connectedness == CannotConnect:
-      error "Not reconnecting to unreachable or non-existing peer",
-        peerId = peerInfo.peerId
-      continue
-
-    # Respect optional backoff period where applicable.
-    let
-      # TODO: Add method to peerStore (eg isBackoffExpired())
-      disconnectTime = Moment.init(peerInfo.disconnectTime, Second) # Convert
-      currentTime = Moment.init(getTime().toUnix, Second)
-        # Current time comparable to persisted value
-      backoffTime = disconnectTime + backoff - currentTime
-        # Consider time elapsed since last disconnect
-
-    trace "Respecting backoff",
-      backoff = backoff,
-      disconnectTime = disconnectTime,
-      currentTime = currentTime,
-      backoffTime = backoffTime
-
-    # TODO: This blocks the whole function. Try to connect to another peer in the meantime.
-    if backoffTime > ZeroDuration:
-      trace "Backing off before reconnect...",
-        peerId = peerInfo.peerId, backoffTime = backoffTime
-      # We disconnected recently and still need to wait for a backoff period before connecting
-      await sleepAsync(backoffTime)
-
-    discard await pm.connectRelay(peerInfo)
-
 ####################
 # Dialer interface #
 ####################
@@ -685,23 +674,29 @@ proc connectToNodes*(
   # later.
   await sleepAsync(chronos.seconds(5))
 
-proc connectedPeers*(pm: PeerManager, protocol: string): (seq[PeerId], seq[PeerId]) =
-  ## Returns the peerIds of physical connections (in and out)
-  ## containing at least one stream with the given protocol.
+proc reconnectPeers*(
+    pm: PeerManager, proto: string, backoffTime: chronos.Duration = chronos.seconds(0)
+) {.async.} =
+  ## Reconnect to peers registered for this protocol. This will update connectedness.
+  ## Especially useful to resume connections from persistent storage after a restart.
 
-  var inPeers: seq[PeerId]
-  var outPeers: seq[PeerId]
+  debug "Reconnecting peers", proto = proto
 
-  for peerId, muxers in pm.switch.connManager.getConnections():
-    for peerConn in muxers:
-      let streams = peerConn.getStreams()
-      if streams.anyIt(it.protocol == protocol):
-        if peerConn.connection.transportDir == Direction.In:
-          inPeers.add(peerId)
-        elif peerConn.connection.transportDir == Direction.Out:
-          outPeers.add(peerId)
+  # Proto is not persisted, we need to iterate over all peers.
+  for peerInfo in pm.peerStore.peers(protocolMatcher(proto)):
+    # Check that the peer can be connected
+    if peerInfo.connectedness == CannotConnect:
+      error "Not reconnecting to unreachable or non-existing peer",
+        peerId = peerInfo.peerId
+      continue
 
-  return (inPeers, outPeers)
+    if backoffTime > ZeroDuration:
+      debug "Backing off before reconnect",
+        peerId = peerInfo.peerId, backoffTime = backoffTime
+      # We disconnected recently and still need to wait for a backoff period before connecting
+      await sleepAsync(backoffTime)
+
+    await pm.connectToNodes(@[peerInfo])
 
 proc getNumStreams*(pm: PeerManager, protocol: string): (int, int) =
   var
@@ -730,9 +725,7 @@ proc pruneInRelayConns(pm: PeerManager, amount: int) {.async.} =
 
 proc connectToRelayPeers*(pm: PeerManager) {.async.} =
   var (inRelayPeers, outRelayPeers) = pm.connectedPeers(WakuRelayCodec)
-  let maxConnections = pm.switch.connManager.inSema.size
   let totalRelayPeers = inRelayPeers.len + outRelayPeers.len
-  let inPeersTarget = maxConnections - pm.outRelayPeersTarget
 
   if inRelayPeers.len > pm.inRelayPeersTarget:
     await pm.pruneInRelayConns(inRelayPeers.len - pm.inRelayPeersTarget)