Distortion using Node 2i as streamer with Denafrips Pontus Dac

I'd recommend looking at Sonore's offerings. I have the Node 2 (gen 2) and when I switched to Sonore's entry-level microRendu the increase in fidelity was an obvious improvement. Their newly-released microRendu sells for a mere $400. Moving up in their line is supposed to be "better". I have no experience otherwise but it's a path you may want to explore. 

Do you use the volume control on the BluOs app?

There are settings for audio fixed and variable plus EQ.

I had an issue for over a year with the Pontus and Node 2i combo.  No issues with distortion, but I had frequent dropouts and skipping issues that I voiced here:
https://forum.audiogon.com/discussions/denafrips-dac-owner-impressions-feedback-general-discussion-q...

I enjoyed the sound of the Pontus as well as the simple interface controls for the Node so I put up with it. Alvin even sent me a new DSP board which sounded better but still had the issues of dropout.  But then a month ago I got a used Auralic Aries because I wanted to try a dedicated streamer without a DAC to use with the Pontus. This combo blew away the Node.  Effortless pinpoint imaging and deep and wide soundstage. The Auralic is great because it can output using usb, spdif and AES/EBU.  I tried each with a Curious usb, Snake River spdif and Audioquest AES cable, each bested the Node easily.  The simple Blusound app is still my favorite compared to Auralic's DS Lightning software which is a little clunky. But using Roon to stream gives it a lot fuller and smoother sound with the pinpoint imaging, alot of micro detail.  I prefer Blusound's interface over DS Lightning and Roon. I use a Macbook Air for the Roon core. Of course it might be sound in your system.

I didn't think there would be that much of a difference but there was. I'm curious how good it would sound now with the Aries G1 or G2 or a Lumin streamer. But it doesn't make sense that these streamers cost more than the Pontus, maybe if I ever upgrade to the Terminator DAC.  The Pontus is still a great sounding DAC.  Best of luck

I use a Bluesound node 2i with the Denafrips Ares ii as DAC.  They work great together.  Maybe it is your internet service.  What are you streaming?  Is it Tidal, Qobuz?  I would try downloading a high quality music file to a flashdrive.  Then put the flashdrive in the USB port of the Bluesound node 2i.  Play the music from the flashdrive.

In the Node settings there is clock trim adjustment. This will better the sync between Node to Dac.