diff --git a/.gitignore b/.gitignore
new file mode 100644
index 000000000..c765108df
--- /dev/null
+++ b/.gitignore
@@ -0,0 +1,5 @@
+*.swp
+*.swo
+*.bak
+.DS_Store
+vendor
diff --git a/addrbook_test.go b/addrbook_test.go
index d5a83da88..5eb7c0b6a 100644
--- a/addrbook_test.go
+++ b/addrbook_test.go
@@ -5,6 +5,8 @@ import (
 	"io/ioutil"
 	"math/rand"
 	"testing"
+
+	"github.com/stretchr/testify/assert"
 )
 
 const addrBookStrict = true
@@ -38,7 +40,7 @@ func TestEmpty(t *testing.T) {
 	}
 }
 
-func randIPv4Address() *NetAddress {
+func randIPv4Address(t *testing.T) *NetAddress {
 	for {
 		ip := fmt.Sprintf("%v.%v.%v.%v",
 			rand.Intn(254)+1,
@@ -47,7 +49,8 @@ func randIPv4Address() *NetAddress {
 			rand.Intn(255),
 		)
 		port := rand.Intn(65535-1) + 1
-		addr := NewNetAddressString(fmt.Sprintf("%v:%v", ip, port))
+		addr, err := NewNetAddressString(fmt.Sprintf("%v:%v", ip, port))
+		assert.Nil(t, err, "error generating rand network address")
 		if addr.Routable() {
 			return addr
 		}
@@ -64,8 +67,8 @@ func TestSaveAddresses(t *testing.T) {
 		src  *NetAddress
 	}{}
 	for i := 0; i < 100; i++ {
-		addr := randIPv4Address()
-		src := randIPv4Address()
+		addr := randIPv4Address(t)
+		src := randIPv4Address(t)
 		randAddrs = append(randAddrs, struct {
 			addr *NetAddress
 			src  *NetAddress
@@ -118,8 +121,8 @@ func TestPromoteToOld(t *testing.T) {
 		src  *NetAddress
 	}{}
 	for i := 0; i < 100; i++ {
-		addr := randIPv4Address()
-		src := randIPv4Address()
+		addr := randIPv4Address(t)
+		src := randIPv4Address(t)
 		randAddrs = append(randAddrs, struct {
 			addr *NetAddress
 			src  *NetAddress
diff --git a/listener.go b/listener.go
index 1d7fb9569..962c2b14c 100644
--- a/listener.go
+++ b/listener.go
@@ -70,7 +70,11 @@ func NewDefaultListener(protocol string, lAddr string, skipUPNP bool) Listener {
 	log.Info("Local listener", "ip", listenerIP, "port", listenerPort)
 
 	// Determine internal address...
-	var intAddr *NetAddress = NewNetAddressString(lAddr)
+	var intAddr *NetAddress
+	intAddr, err = NewNetAddressString(lAddr)
+	if err != nil {
+		PanicCrisis(err)
+	}
 
 	// Determine external address...
 	var extAddr *NetAddress
diff --git a/netaddress.go b/netaddress.go
index 34dc5cafb..90fcf6a43 100644
--- a/netaddress.go
+++ b/netaddress.go
@@ -5,11 +5,12 @@
 package p2p
 
 import (
+	"errors"
 	"net"
 	"strconv"
 	"time"
 
-	. "github.com/tendermint/go-common"
+	cmn "github.com/tendermint/go-common"
 )
 
 type NetAddress struct {
@@ -34,27 +35,43 @@ func NewNetAddress(addr net.Addr) *NetAddress {
 }
 
 // Also resolves the host if host is not an IP.
-func NewNetAddressString(addr string) *NetAddress {
+func NewNetAddressString(addr string) (*NetAddress, error) {
+
 	host, portStr, err := net.SplitHostPort(addr)
 	if err != nil {
-		PanicSanity(err)
+		return nil, err
 	}
+
 	ip := net.ParseIP(host)
 	if ip == nil {
 		if len(host) > 0 {
 			ips, err := net.LookupIP(host)
 			if err != nil {
-				PanicSanity(err)
+				return nil, err
 			}
 			ip = ips[0]
 		}
 	}
+
 	port, err := strconv.ParseUint(portStr, 10, 16)
 	if err != nil {
-		PanicSanity(err)
+		return nil, err
 	}
+
 	na := NewNetAddressIPPort(ip, uint16(port))
-	return na
+	return na, nil
+}
+
+func NewNetAddressStrings(addrs []string) ([]*NetAddress, error) {
+	netAddrs := make([]*NetAddress, len(addrs))
+	for i, addr := range addrs {
+		netAddr, err := NewNetAddressString(addr)
+		if err != nil {
+			return nil, errors.New(cmn.Fmt("Error in address %s: %v", addr, err))
+		}
+		netAddrs[i] = netAddr
+	}
+	return netAddrs, nil
 }
 
 func NewNetAddressIPPort(ip net.IP, port uint16) *NetAddress {
@@ -81,7 +98,7 @@ func (na *NetAddress) Less(other interface{}) bool {
 	if o, ok := other.(*NetAddress); ok {
 		return na.String() < o.String()
 	} else {
-		PanicSanity("Cannot compare unequal types")
+		cmn.PanicSanity("Cannot compare unequal types")
 		return false
 	}
 }
diff --git a/pex_reactor.go b/pex_reactor.go
index d7ccc7613..c02d9a679 100644
--- a/pex_reactor.go
+++ b/pex_reactor.go
@@ -64,7 +64,13 @@ func (pexR *PEXReactor) GetChannels() []*ChannelDescriptor {
 // Implements Reactor
 func (pexR *PEXReactor) AddPeer(peer *Peer) {
 	// Add the peer to the address book
-	netAddr := NewNetAddressString(peer.ListenAddr)
+	netAddr, err := NewNetAddressString(peer.ListenAddr)
+	if err != nil {
+		// this should never happen
+		log.Error("Error in AddPeer: invalid peer address", "addr", peer.ListenAddr, "error", err)
+		return
+	}
+
 	if peer.IsOutbound() {
 		if pexR.book.NeedMoreAddrs() {
 			pexR.RequestPEX(peer)
@@ -109,7 +115,6 @@ func (pexR *PEXReactor) Receive(chID byte, src *Peer, msgBytes []byte) {
 	default:
 		log.Warn(Fmt("Unknown message type %v", reflect.TypeOf(msg)))
 	}
-
 }
 
 // Asks peer for more addresses.
diff --git a/switch.go b/switch.go
index 841c44f86..2f7177bf0 100644
--- a/switch.go
+++ b/switch.go
@@ -296,20 +296,24 @@ func (sw *Switch) startInitPeer(peer *Peer) {
 	sw.addPeerToReactors(peer) // run AddPeer on each reactor
 }
 
-// Dial a list of seeds in random order
-// Spawns a go routine for each dial
-func (sw *Switch) DialSeeds(seeds []string) {
+// Dial a list of seeds asynchronously in random order
+func (sw *Switch) DialSeeds(seeds []string) error {
+
+	netAddrs, err := NewNetAddressStrings(seeds)
+	if err != nil {
+		return err
+	}
+
 	// permute the list, dial them in random order.
 	perm := rand.Perm(len(seeds))
 	for i := 0; i < len(perm); i++ {
 		go func(i int) {
 			time.Sleep(time.Duration(rand.Int63n(3000)) * time.Millisecond)
 			j := perm[i]
-			addr := NewNetAddressString(seeds[j])
-
-			sw.dialSeed(addr)
+			sw.dialSeed(netAddrs[j])
 		}(i)
 	}
+	return nil
 }
 
 func (sw *Switch) dialSeed(addr *NetAddress) {
diff --git a/version.go b/version.go
index af98bef33..c13ec447b 100644
--- a/version.go
+++ b/version.go
@@ -1,3 +1,3 @@
 package p2p
 
-const Version = "0.3.5" // minor fixes
+const Version = "0.4.0" // DialSeeds returns an error