[latch]

If you're using hostnames in your config file, that is a form of service discovery. One that relies on DNS. But DNS is a general solution. Are you using a public DNS server? What if it goes down? What's the minimum TTL it'll support?

Also, don't you find it a little odd that you use a hostname to avoid being bound to a specific IP, but you've still hardcoded a port? Either there's value in being decoupled from the address of the service -- which must include the port -- or there isn't.

It generally comes down to gaining more control over the process to achieve higher availability and greater flexibility. Maybe you want all authentication requests from frontend12 to be routed to auth2 for some reason. At scale, it's unruly to do these types of changes by touching config files.