I am trying to set up web monetization, how do I run an ILP wallet/node/whatever it’s called? I have seen people link to Uphold, but that requires KYC. Are there any other options? It looks like I’d have to run the wallet software on my VPS. (I saw elsewhere that it’d need to be online 24/7)
Your understanding is basically correct. UpHold is your best bet for ILP mainnet, or you could try reaching out to the folks at Coil too to discuss your use-case (they’re peered with UpHold).
You could optionally try to run your own node, but you would need to find and connect to your own peers. In that sense ILP is like networking protocols - you can run your own WiFi at home, but without an Internet service provider or a custom connection to some other network, you’ll just be talking to your own systems.
In that sense, Uphold is like an ISP.
Maybe share some more details about your use-case?
Well, there are two things I want to do.
First I want to set up web monetization on my own site and blog (and have it be compatible with Coil) and have the earnings in a wallet with keys I control (Ideally ETH or XMR). Uphold and withdrawing to my own wallet won’t work, I can’t currently comply with the ToS. It would be great if there was some kind of proxy so I could use ex. $eth.ilproxy.example/0x532Fb5D00f40ced99B16d1E295C77Cda2Eb1BB4F and have the money go to my ETH wallet (If needed, it could be wrapped to something like tbtc or wbtc, not sure if there are any xrp wrappers yet tho)
I also want to make an alternative web monetization provider. It would be kinda like coil, but without the subscription (you’d fund it whenever you want from your existing crypto). I already wrote the code to send monetization events and such, but I have no idea how to actually send any money on interledger.
You said something about peering, interledger is closed by default? I assumed it was open. 
Is there anything like peeringdb for ILP?
First I want to set up web monetization on my own site and blog (and have it be compatible with Coil) and have the earnings in a wallet with keys I control.
I’m assuming by this you mean that a Coil subscriber visiting your blog should be able to stream micropayments to your wallet (as opposed to those funds terminating in an Uphold or Gatehub or whatever wallet). Conceptually this should work, but I think there would need to be a payment-path in the Interledger network (that Coil operates on) from Coil to your wallet – and to make that work somewhere in your system you’d need to be running an ILP Connector that is reachable by Coil. At the moment, I suspect this means you’d either need to partner with Coil directly (to peer with them) or partner with a partner of Coil’s (e.g., UpHold).
I also want to make an alternative web monetization provider.
This is an interesting idea, and one that I’ve heard others in the WM community want to see come to fruition (i.e., there should be many WM providers). I would maybe start another thread more targeted at this question so you can get a better idea of what’s involved (the level of effort here is probably higher than you think, e.g., you’re going to need to run ILP infrastructure, which takes time+resources, or use a partner that operates that infrastructure for you).
That’s gonna be a little difficult. Here’s my suggesting, there an real nice portfolio widget, called GEM, on that wiget you can access the site with a simple code from the Administrator, there you could make an exchange, you could also leave it there and even have your friends or customers make an exchange, of course with a different code from the Administrator.
It’s safe, easy and really up to date… Good luck