When you're paying rock-bottom prices for a VPS, you're getting rock-bottom specs. But here's the thing—if all you need is a proxy server, you don't need much horsepower anyway. The trick is matching your minimal needs with a minimal system. No bloat, no waste, just what works.

I haven't tinkered with server setups in a while, but today felt like the right time to document this: how to run the absolute leanest system on an ultra-budget VPS that's only handling proxy traffic.

Why Cheap VPS? Why Minimal Systems?

Let's be honest—not every project needs a powerhouse server. Sometimes you just need something that forwards traffic reliably without eating your wallet. That's where budget VPS providers shine, as long as you're smart about what you run on them.

The challenge with cheap VPS plans is they're weak. Limited CPU, minimal RAM, tight storage. Try running a standard Linux distro with a full desktop environment and you'll watch it choke. But strip things down to bare essentials? Suddenly that $10-per-year box becomes perfectly adequate.

For pure proxy work, you don't need GUI, you don't need dozens of background services, and you definitely don't need systemd eating resources. You need network connectivity, basic system utilities, and your proxy software. That's it.

Picking Your VPS Provider

I'm going with RackNerd here. Their annual plans start at $10.96/year, which is absurdly cheap for what you get. Sure, the specs are modest, but the performance-to-price ratio is solid. Their network is stable, and that matters more than raw compute when you're running proxies.

👉 Grab a budget VPS plan that won't drain your annual coffee budget—check out RackNerd's yearly deals here

The one quirk: they don't offer FreeBSD by default. But here's the workaround that actually works.

Why FreeBSD? Why Not Just Ubuntu?

FreeBSD has a reputation for being "that other Unix." But for minimal systems, it's actually perfect. A base FreeBSD install runs about 10 processes total. Ten. Compare that to a typical Ubuntu server spinning up 50+ processes on boot.

Less processes means less RAM usage, fewer potential security holes, and honestly, less stuff that can break. The system feels snappier even on weak hardware because there's simply less overhead.

Plus, FreeBSD's network stack is rock-solid. When your entire use case revolves around network traffic, that matters.

Getting FreeBSD on RackNerd

Since RackNerd doesn't list FreeBSD in their standard OS options, you'll need to ask nicely. Open a support ticket and request a FreeBSD installation. They'll ask you to provide an ISO image link—just grab the latest official FreeBSD release ISO from their website and send them the URL.

Customer support will mount the ISO to your VPS. After that, reboot your machine and walk through the standard FreeBSD installation process via VNC console. It's straightforward if you've installed any Unix-like system before.

One tip: after installation completes, make sure to change your boot order in the VPS control panel so it boots from hard disk first, not the mounted ISO. Otherwise you'll keep booting into the installer.

If you're using a different VPS provider that actually lists FreeBSD, you'll probably get version 12.x, which is fine and stable. You can upgrade to 14.3 later if you want the latest features, but honestly, 12.x works perfectly well for proxy purposes.

I went ahead and updated to FreeBSD 14.3 because why not—it's easy enough and gives you the newest network optimizations.

Setting Up Hysteria2 for Proxy

For the proxy server itself, I'm using Hysteria2. It's simple to configure, performs well even on weak hardware, and handles modern network conditions gracefully. Perfect for this use case.

The setup is minimal. You'll need to create a startup script since FreeBSD doesn't include one by default. Drop this script into /usr/local/etc/rc.d:

sh
#!/bin/sh

PROVIDE: hysteria

REQUIRE: LOGIN

KEYWORD: shutdown

. /etc/rc.subr

name="hysteria"
rcvar="${name}_enable"

: ${hysteria_enable="NO"}
: ${hysteria_logdir="/var/log/${name}"}
: ${hysteria_env=""}
: ${hysteria_user="root"}
: ${hysteria_group="wheel"}

pidfile="/var/run/$name.pid"
procname="/usr/local/bin/$name"
command="/usr/sbin/daemon"
command_args="-c -p ${pidfile} /usr/bin/env ${asset_env} ${hysteria_env} ${procname} server -c /usr/local/etc/config.yaml"

start_precmd="hysteria_startprecmd"

hysteria_startprecmd() {
touch "${pidfile}"
chown ${hysteria_user}:${hysteria_group} "${pidfile}"
}

load_rc_config "$name"
run_rc_command "$1"

Make the script executable, then create your Hysteria2 configuration file at /usr/local/etc/config.yaml with your specific settings (ports, authentication, etc.).

Enable and start the service:

sh
service hysteria start

That's it. Your proxy is running on a system using minimal resources. Check with htop and you'll see those 10-ish processes humming along efficiently.

The Beauty of Minimalism

There's something satisfying about running a system this lean. No unnecessary daemons, no bloated package managers, no services you forgot you installed. Just the essentials doing their job quietly.

This approach won't work for every use case—if you need Docker, complex automation, or heavy processing, you'll want something beefier. But for dedicated proxy work, especially when you're footing the bill yourself, this combo of cheap VPS and minimal OS is hard to beat.

You get reliable service, predictable performance, and an annual cost that's less than a couple months of premium streaming subscriptions.

Wrapping Up

Budget VPS hosting doesn't mean settling for garbage service—it means being smart about matching your needs to available resources. FreeBSD's minimal footprint makes it ideal for weak hardware, and Hysteria2 gives you modern proxy capabilities without complicated setup.

If you're looking for affordable hosting that punches above its weight class for proxy and lightweight networking tasks, this setup delivers. And when you're spending under twelve bucks a year, you can't really complain even if things occasionally hiccup.

👉 Ready to set up your own minimal system? Check out RackNerd's budget-friendly VPS options perfect for lean proxy deployments

The key takeaway: sometimes less really is more. Ten processes, one purpose, zero fuss.