diff --git a/core/src/global.rs b/core/src/global.rs
index dc0c9a0a7..b65747038 100644
--- a/core/src/global.rs
+++ b/core/src/global.rs
@@ -69,6 +69,12 @@ pub const TESTNET3_INITIAL_DIFFICULTY: u64 = 30000;
 /// we're sure this peer is a stuck node, and we will kick out such kind of stuck peers.
 pub const STUCK_PEER_KICK_TIME: i64 = 2 * 3600 * 1000;
 
+/// If a peer's last seen time is 2 weeks ago we will forget such kind of defunct peers.
+const PEER_EXPIRATION_DAYS: i64 = 7 * 2;
+
+/// Constant that expresses defunct peer timeout in seconds to be used in checks.
+pub const PEER_EXPIRATION_REMOVE_TIME: i64 = PEER_EXPIRATION_DAYS * 24 * 3600;
+
 /// Testnet 4 initial block difficulty
 /// 1_000 times natural scale factor for cuckatoo29
 pub const TESTNET4_INITIAL_DIFFICULTY: u64 = 1_000 * (2 << (29 - 24)) * 29;
diff --git a/p2p/src/peers.rs b/p2p/src/peers.rs
index a6c0e8087..a6cba0e64 100644
--- a/p2p/src/peers.rs
+++ b/p2p/src/peers.rs
@@ -21,8 +21,10 @@ use util::RwLock;
 use rand::{thread_rng, Rng};
 
 use chrono::prelude::*;
+use chrono::Duration;
 use core::core;
 use core::core::hash::{Hash, Hashed};
+use core::global;
 use core::pow::Difficulty;
 
 use peer::Peer;
@@ -67,6 +69,7 @@ impl Peers {
 				flags: State::Healthy,
 				last_banned: 0,
 				ban_reason: ReasonForBan::None,
+				last_connected: Utc::now().timestamp(),
 			};
 			addr = peer.info.addr.clone();
 		}
@@ -469,6 +472,31 @@ impl Peers {
 	pub fn enough_peers(&self) -> bool {
 		self.connected_peers().len() >= self.config.peer_min_preferred_count() as usize
 	}
+
+	/// Removes those peers that seem to have expired
+	pub fn remove_expired(&self) {
+		let now = Utc::now();
+
+		// Delete defunct peers from storage
+		let _ = self.store.delete_peers(|peer| {
+			let diff = now - Utc.timestamp(peer.last_connected, 0);
+
+			let should_remove = peer.flags == State::Defunct
+				&& diff > Duration::seconds(global::PEER_EXPIRATION_REMOVE_TIME);
+
+			if should_remove {
+				debug!(
+					"removing peer {:?}: last connected {} days {} hours {} minutes ago.",
+					peer.addr,
+					diff.num_days(),
+					diff.num_hours(),
+					diff.num_minutes()
+				);
+			}
+
+			should_remove
+		});
+	}
 }
 
 impl ChainAdapter for Peers {
@@ -603,6 +631,7 @@ impl NetAdapter for Peers {
 				flags: State::Healthy,
 				last_banned: 0,
 				ban_reason: ReasonForBan::None,
+				last_connected: Utc::now().timestamp(),
 			};
 			if let Err(e) = self.save_peer(&peer) {
 				error!("Could not save received peer address: {:?}", e);
diff --git a/p2p/src/store.rs b/p2p/src/store.rs
index f27d05c6c..1ca8a2bcb 100644
--- a/p2p/src/store.rs
+++ b/p2p/src/store.rs
@@ -57,6 +57,8 @@ pub struct PeerData {
 	pub last_banned: i64,
 	/// The reason for the ban
 	pub ban_reason: ReasonForBan,
+	/// Time when we last connected to this peer.
+	pub last_connected: i64,
 }
 
 impl Writeable for PeerData {
@@ -68,7 +70,8 @@ impl Writeable for PeerData {
 			[write_bytes, &self.user_agent],
 			[write_u8, self.flags as u8],
 			[write_i64, self.last_banned],
-			[write_i32, self.ban_reason as i32]
+			[write_i32, self.ban_reason as i32],
+			[write_i64, self.last_connected]
 		);
 		Ok(())
 	}
@@ -77,12 +80,13 @@ impl Writeable for PeerData {
 impl Readable for PeerData {
 	fn read(reader: &mut Reader) -> Result<PeerData, ser::Error> {
 		let addr = SockAddr::read(reader)?;
-		let (capab, ua, fl, lb, br) =
-			ser_multiread!(reader, read_u32, read_vec, read_u8, read_i64, read_i32);
+		let (capab, ua, fl, lb, br, lc) =
+			ser_multiread!(reader, read_u32, read_vec, read_u8, read_i64, read_i32, read_i64);
 		let user_agent = String::from_utf8(ua).map_err(|_| ser::Error::CorruptedData)?;
 		let capabilities = Capabilities::from_bits(capab).ok_or(ser::Error::CorruptedData)?;
 		let last_banned = lb;
 		let ban_reason = ReasonForBan::from_i32(br).ok_or(ser::Error::CorruptedData)?;
+
 		match State::from_u8(fl) {
 			Some(flags) => Ok(PeerData {
 				addr: addr.0,
@@ -91,6 +95,7 @@ impl Readable for PeerData {
 				flags: flags,
 				last_banned: last_banned,
 				ban_reason: ban_reason,
+				last_connected: lc,
 			}),
 			None => Err(ser::Error::CorruptedData),
 		}
@@ -171,6 +176,33 @@ impl PeerStore {
 		batch.put_ser(&peer_key(peer.addr)[..], &peer)?;
 		batch.commit()
 	}
+
+	/// Deletes peers from the storage that satisfy some condition `predicate`
+	pub fn delete_peers<F>(&self, predicate: F) -> Result<(), Error>
+	where
+		F: Fn(&PeerData) -> bool,
+	{
+		let mut to_remove = vec![];
+
+		for x in self.all_peers() {
+			if predicate(&x) {
+				to_remove.push(x)
+			}
+		}
+
+		// Delete peers in single batch
+		if !to_remove.is_empty() {
+			let batch = self.db.batch()?;
+
+			for peer in to_remove {
+				batch.delete(&peer_key(peer.addr)[..])?;
+			}
+
+			batch.commit()?;
+		}
+
+		Ok(())
+	}
 }
 
 fn peer_key(peer_addr: SocketAddr) -> Vec<u8> {
diff --git a/servers/src/grin/seed.rs b/servers/src/grin/seed.rs
index 923450f88..32fca7c76 100644
--- a/servers/src/grin/seed.rs
+++ b/servers/src/grin/seed.rs
@@ -59,10 +59,18 @@ pub fn connect_and_monitor(
 			);
 
 			let mut prev = MIN_DATE.and_hms(0, 0, 0);
+			let mut prev_expire_check = MIN_DATE.and_hms(0, 0, 0);
 			let mut prev_ping = Utc::now();
 			let mut start_attempt = 0;
 
 			while !stop.load(Ordering::Relaxed) {
+				// Check for and remove expired peers from the storage
+				if Utc::now() - prev_expire_check > Duration::hours(1) {
+					peers.remove_expired();
+
+					prev_expire_check = Utc::now();
+				}
+
 				// make several attempts to get peers as quick as possible
 				// with exponential backoff
 				if Utc::now() - prev > Duration::seconds(cmp::min(20, 1 << start_attempt)) {
@@ -110,6 +118,7 @@ fn monitor_peers(
 	let mut healthy_count = 0;
 	let mut banned_count = 0;
 	let mut defuncts = vec![];
+
 	for x in peers.all_peers() {
 		match x.flags {
 			p2p::State::Banned => {