diff --git a/.github/workflows/release.yml b/.github/workflows/release.yml
index 893ba7eeb..44f8f4fa1 100644
--- a/.github/workflows/release.yml
+++ b/.github/workflows/release.yml
@@ -155,41 +155,14 @@ jobs:
           name: cheqd-node-image.tar
           path: cheqd-node-image.tar
 
-  build-testnet-image:
-    name: Build cheqd-testnet image
-    runs-on: ubuntu-20.04
-    needs: build-node-images
-    steps:
-      - name: Check out
-        uses: actions/checkout@v2
-
-      - name: Download node image
-        uses: actions/download-artifact@v2
-        with:
-          name: cheqd-cli-image.tar
-
-      - name: Load node image
-        run: docker load -i cheqd-cli-image.tar
-
-      - name: Build
-        run: docker build -f tests/networks/docker-localnet/Dockerfile --no-cache -t cheqd-testnet .
-
-      - name: Save
-        run: docker save -o cheqd-testnet-image.tar cheqd-testnet
-
-      - name: Store artifact
-        uses: actions/upload-artifact@v2
-        with:
-          name: cheqd-testnet-image.tar
-          path: cheqd-testnet-image.tar
-
   publish:
     name: "Publish images and release"
     # Reference to workflow-setup job is required to access its various outputs.
-    needs: [ build-binary, build-node-images, build-testnet-image, build-deb-package, build-tar-package ]
+    needs: [ build-binary, build-node-images, build-deb-package, build-tar-package ]
     runs-on: ubuntu-latest
     env:
       VERSION: ${{ needs.build-binary.outputs.VERSION }}
+      REGISTRY: ghcr.io
     steps:
       - name: Git checkout
         uses: actions/checkout@v2
@@ -210,17 +183,12 @@ jobs:
       - name: Load cheqd-node image
         run: docker load -i cheqd-node-image.tar
 
-      - name: Download testnet image
-        uses: actions/download-artifact@v2
+      - name: Log in to the Container registry
+        uses: docker/login-action@v1
         with:
-          name: cheqd-testnet-image.tar
-
-      - name: Load testnet image
-        run: docker load -i cheqd-testnet-image.tar
-
-      - name: Login to docker
-        run: |
-          echo ${{ secrets.GH_PAT }} | docker login ghcr.io --username ${{ secrets.GH_USER }} --password-stdin
+          registry: ${{ env.REGISTRY }}
+          username: ${{ github.actor }}
+          password: ${{ secrets.GITHUB_TOKEN }}
 
       - name: Push cheqd-node image
         run: |
@@ -229,20 +197,12 @@ jobs:
           docker push ghcr.io/${{ github.repository }}:${{ env.VERSION }}
           docker push ghcr.io/${{ github.repository }}:latest
 
-      
       - name: Push cheqd-cli image
         run: |
-          docker tag cheqd-cli ghcr.io/${{ env.GITHUB_ORG_NAME }}/cheqd-cli:${{ env.VERSION }}
-          docker tag cheqd-cli ghcr.io/${{ env.GITHUB_ORG_NAME }}/cheqd-cli:latest
-          docker push ghcr.io/${{ env.GITHUB_ORG_NAME }}:${{ env.VERSION }}
-          docker push ghcr.io/${{ env.GITHUB_ORG_NAME }}:latest
-
-      - name: Push testnet image
-        run: |
-          docker tag cheqd-testnet ghcr.io/${{ github.repository_owner }}/cheqd-testnet:${{ env.VERSION }}
-          docker tag cheqd-testnet ghcr.io/${{ github.repository_owner }}/cheqd-testnet:latest
-          docker push ghcr.io/${{ github.repository_owner }}/cheqd-testnet:${{ env.VERSION }}
-          docker push ghcr.io/${{ github.repository_owner }}/cheqd-testnet:latest
+          docker tag cheqd-cli ghcr.io/${{ github.repository_owner }}/cheqd-cli:${{ env.VERSION }}
+          docker tag cheqd-cli ghcr.io/${{ github.repository_owner }}/cheqd-cli:latest
+          docker push ghcr.io/${{ github.repository_owner }}/cheqd-cli:${{ env.VERSION }}
+          docker push ghcr.io/${{ github.repository_owner }}/cheqd-cli:latest
 
       - name: Download deb
         uses: actions/download-artifact@v2
diff --git a/.github/workflows/test.yml b/.github/workflows/test.yml
index 7e46b27c1..328a402c7 100644
--- a/.github/workflows/test.yml
+++ b/.github/workflows/test.yml
@@ -9,10 +9,9 @@ on:
     - '.gitbook/**'
 
 env:
-  NODE_CONFIGS_BASE: "/home/runner/work/cheqd-node/cheqd-node/tests/networks/docker-compose-localnet/network-config"
+  NODE_CONFIGS_BASE: "/home/runner/work/cheqd-node/cheqd-node/docker/localnet/network-config"
 
 jobs:
-
   run-unit-test:
     name: Run unit tests
     runs-on: ubuntu-20.04
@@ -175,34 +174,6 @@ jobs:
           name: cheqd-node-image.tar
           path: cheqd-node-image.tar
 
-  build-testnet-image:
-    name: Build cheqd-testnet image
-    runs-on: ubuntu-20.04
-    needs: build-node-images
-    steps:
-      - name: Check out
-        uses: actions/checkout@v2
-
-      - name: Download node image
-        uses: actions/download-artifact@v2
-        with:
-          name: cheqd-cli-image.tar
-
-      - name: Load node image
-        run: docker load -i cheqd-cli-image.tar
-
-      - name: Build
-        run: docker build -f tests/networks/docker-localnet/Dockerfile --no-cache -t cheqd-testnet .
-
-      - name: Save
-        run: docker save -o cheqd-testnet-image.tar cheqd-testnet
-
-      - name: Store artifact
-        uses: actions/upload-artifact@v2
-        with:
-          name: cheqd-testnet-image.tar
-          path: cheqd-testnet-image.tar
-
   test-new-node-setup-from-deb:
     name: Test new node setup from deb
     runs-on: ubuntu-20.04
@@ -221,34 +192,34 @@ jobs:
       - name: Download node image
         uses: actions/download-artifact@v2
         with:
-          name: cheqd-cli-image.tar
+          name: cheqd-node-image.tar
 
       - name: Load node image
-        run: docker load -i cheqd-cli-image.tar
+        run: docker load -i cheqd-node-image.tar
 
       - name: Check out
         uses: actions/checkout@v2
 
-      - name: Set up 4 validators + 2 observers node docker pool  # TODO: Replace with testnet image
-        working-directory: ./tests/networks/docker-compose-localnet
+      - name: Set up 4 validators + 2 observers node docker pool
+        working-directory: ./docker/localnet
         run: |
           bash gen-network-config.sh
-          docker-compose up -d
+          CHEQD_NODE_IMAGE=cheqd-node CHEQD_NODE_VERSION=latest docker compose up -d
 
       - name: Wait for chain
-        run: bash tests/networks/tools/wait-for-chain.sh
+        run: bash tests/tools/wait-for-chain.sh
 
       - name: Add observer node
-        working-directory: ./tests/networks/docker-compose-localnet
+        working-directory: ./tests/e2e-complex/deb-install
         run: |
           ./add-observer.sh
           cheqd-noded status -n tcp://localhost:26677 2>&1
           ./wait.sh '[[ $(cheqd-noded status -n '"'"'tcp://localhost:26677'"'"' 2>&1 | wc -l) == 1 ]] && echo "New node returns status!"'
 
       - name: Promote observer to validator
-        working-directory: ./tests/networks/docker-compose-localnet
+        working-directory: ./tests/e2e-complex/deb-install
         run: |
-          bash -x promote-validator.sh
+          bash promote-validator.sh
           cheqd-noded query staking validators --node "http://localhost:26657" | sed -nr 's/.*status: (.*?).*/\1/p' $1 | while read x; do [[ "BOND_STATUS_BONDED" == $x ]] && echo "Validator's status is bonded!" || exit 1 ; done
           ./wait.sh '[[ $(curl -s localhost:26657/block | sed -nr '"'"'s/.*signature": (.*?).*/\1/p'"'"' | wc -l) == 5 ]] && echo "There are 5 validators signatures in block!"'
           ./wait.sh '[[ $(curl -s localhost:26657/block | sed -nr '"'"'s/.*(signature": null).*/\1/p'"'"' | wc -l) == 0 ]] && echo "There are no null signatures in block!"'
@@ -258,11 +229,6 @@ jobs:
         run: |
           journalctl -ex | grep cheqd
 
-      - name: Gather logs on failure 2
-        if: ${{ failure() }}
-        run: |
-          journalctl -u service-name.service --no-pager
-
   run-python-based-integration-tests:
     name: Run python based cosmos and identity tests
     runs-on: ubuntu-20.04
@@ -280,24 +246,25 @@ jobs:
       - name: Download node image
         uses: actions/download-artifact@v2
         with:
-          name: cheqd-cli-image.tar
+          name: cheqd-node-image.tar
 
       - name: Load node image
-        run: docker load -i cheqd-cli-image.tar
+        run: docker load -i cheqd-node-image.tar
 
-      - uses: actions/checkout@v2
+      - name: Check out
+        uses: actions/checkout@v2
 
-      - name: Set up 4 validators + 2 observers node docker pool for local test run # Replace with testnet image
-        working-directory: ./tests/networks/docker-compose-localnet
+      - name: Set up 4 validators + 2 observers node docker pool
+        working-directory: ./docker/localnet
         run: |
           bash gen-network-config.sh
-          docker-compose up -d
+          CHEQD_NODE_IMAGE=cheqd-node CHEQD_NODE_VERSION=latest docker compose up -d
 
       - name: Wait for chain
-        run: bash tests/networks/tools/wait-for-chain.sh
+        run: bash tests/tools/wait-for-chain.sh
 
       - name: Set up test environment
-        working-directory: ./tests/e2e
+        working-directory: ./tests/e2e-pytest
         run: |
           pip3 install -r requirements.txt >> /dev/null
           cp -Rf ${NODE_CONFIGS_BASE}/validator-0/. /home/runner/.cheqdnode
@@ -305,25 +272,25 @@ jobs:
           sudo chmod -R 777 /home/runner
 
       - name: Run cosmos-related tests
+        working-directory: ./tests/e2e-pytest
         run: |
           set -euxo pipefail
           export OP0_ADDRESS=$(cheqd-noded keys list --keyring-backend "test" --home "${NODE_CONFIGS_BASE}/validator-0" | sed -nr 's/.*address: (.*?).*/\1/p' | sed 's/\r//g')
           export OP1_ADDRESS=$(cheqd-noded keys list --keyring-backend "test" --home "${NODE_CONFIGS_BASE}/validator-1" | sed -nr 's/.*address: (.*?).*/\1/p' | sed 's/\r//g')
-          pytest -v -rP tests/e2e/test_cosmos.py
+          pytest -v -rP test_cosmos.py
 
       - name: Run identity-related tests # TODO: Move into separate stage?
+        working-directory: ./tests/e2e-pytest
         run: |
           export OP0_ADDRESS=$(cheqd-noded keys list --keyring-backend "test" | sed -nr 's/.*address: (.*?).*/\1/p' | sed -n 1p | sed 's/\r//g')
           export OP1_ADDRESS=$(cheqd-noded keys list --keyring-backend "test" | sed -nr 's/.*address: (.*?).*/\1/p' | sed -n 2p | sed 's/\r//g')
-          pytest -v -rP tests/e2e/test_identity.py
+          pytest -v -rP test_identity.py
 
   run-bash-based-integration-tests:
     name: Run bash based identity tests
     runs-on: ubuntu-20.04
-    needs: [build-binary, build-testnet-image]
+    needs: [build-binary, build-node-images]
     steps:
-      - uses: actions/checkout@v2
-
       - name: Load binary artifact
         uses: actions/download-artifact@v2
         with:
@@ -333,23 +300,34 @@ jobs:
       - name: Restore binary permissions
         run: sudo chmod +x /home/runner/.local/bin/cheqd-noded
 
-      - name: Download testnet image
+      - name: Download node image
         uses: actions/download-artifact@v2
         with:
-          name: cheqd-testnet-image.tar
+          name: cheqd-node-image.tar
 
-      - name: Load testnet image
-        run: docker load -i cheqd-testnet-image.tar
+      - name: Load node image
+        run: docker load -i cheqd-node-image.tar
 
-      - name: Run test net container
+      - name: Check out
+        uses: actions/checkout@v2
+
+      - name: Set up 4 validators + 2 observers node docker pool
+        working-directory: ./docker/localnet
         run: |
-          docker run -d --rm -p "26657:26657" -p "1317:1317" cheqd-testnet
-          bash tests/networks/tools/wait-for-chain.sh
+          bash gen-network-config.sh
+          CHEQD_NODE_IMAGE=cheqd-node CHEQD_NODE_VERSION=latest docker compose up -d
 
-      - name: Set up and run tests
-        working-directory: tests/cli
+      - name: Wait for chain
+        run: bash tests/tools/wait-for-chain.sh
+
+      - name: Import keys
+        working-directory: docker/localnet
         run: |
           bash import_keys.sh
+
+      - name: Set up and run tests
+        working-directory: tests/e2e-bash
+        run: |
           bash run_all.sh
 
   run-upgrade-test-positive-case:
@@ -361,25 +339,25 @@ jobs:
         with:
           fetch-depth: 0 # It's needed for getting the full version of package by `git describe`
 
-      - name: Download node image
+      - name: Download cli image
         uses: actions/download-artifact@v2
         with:
           name: cheqd-cli-image.tar
 
-      - name: Load node image
+      - name: Load cli image
         run: docker load -i cheqd-cli-image.tar
 
       - name: Chown for current user
         run: sudo chown $USER:$USER .
 
       - name: Prepare nodes for checking upgrade
-        working-directory: ./tests/upgrade
+        working-directory: ./tests/e2e-complex/upgrade
         run: bash prepare.sh
 
       - name: Initiate the upgrade process
-        working-directory: ./tests/upgrade
+        working-directory: ./tests/e2e-complex/upgrade
         run: bash initiate_upgrade.sh
 
       - name: Make the upgrade and check results
-        working-directory: ./tests/upgrade
+        working-directory: ./tests/e2e-complex/upgrade
         run: bash upgrade_and_check.sh
diff --git a/cmd/cheqd-noded/cmd/debug_extensions.go b/cmd/cheqd-noded/cmd/debug_extensions.go
index 7e1a85abd..3e93ce23a 100644
--- a/cmd/cheqd-noded/cmd/debug_extensions.go
+++ b/cmd/cheqd-noded/cmd/debug_extensions.go
@@ -42,7 +42,6 @@ func ed25519RandomCmd() *cobra.Command {
 
 			keyInfo := struct {
 				PubKeyBase64    	string `json:"pub_key_base_64"`
-				PubKeyMultibase58   string `json:"pub_key_multibase_58"`
 				PrivKeyBase64   	string `json:"priv_key_base_64"`
 			}{
 				PubKeyBase64: base64.StdEncoding.EncodeToString(pubKey),
diff --git a/docker/Dockerfile b/docker/Dockerfile
index 900de76c2..54ad0680f 100644
--- a/docker/Dockerfile
+++ b/docker/Dockerfile
@@ -85,7 +85,7 @@ ENTRYPOINT [ "cheqd-noded" ]
 FROM base AS node
 
 # Set runner script
-COPY --chown=cheqd:cheqd docker/persistent-chains/entrypoint.sh /bin/node-start
+COPY --chown=cheqd:cheqd docker/entrypoint.sh /bin/node-start
 RUN chmod +x /bin/node-start
 
 # Default entrypoint for cheqd-noded CLI usage
diff --git a/docker/entrypoint.sh b/docker/entrypoint.sh
new file mode 100644
index 000000000..ce5915173
--- /dev/null
+++ b/docker/entrypoint.sh
@@ -0,0 +1,58 @@
+#!/bin/bash
+
+# Inits node configuration and runs the node.
+# e -> exit immediately, u -> treat unset variables as errors and immediately, o -> sets the exit code to the rightmost command 
+set -euo pipefail
+
+# within the container, $HOME=/home/cheqd
+CHEQD_ROOT_DIR="$HOME/.cheqdnode"
+
+# Init node config directory
+if [ ! -d "${CHEQD_ROOT_DIR}/config" ]
+then
+    echo "Node config not found. Initializing."
+    cheqd-noded init "moniker-placeholder"
+else
+    echo "Node config exists. Skipping initialization."
+fi
+
+# Check if a genesis file has been passed in config
+if [ -f "/genesis" ]
+then
+    echo "Genesis file passed. Adding/replacing current genesis file."
+    cp /genesis "${CHEQD_ROOT_DIR}/config/genesis.json"
+else
+    echo "No genesis file passed. Skipping and retaining existing genesis."
+fi
+
+# Check if a seeds file has been passed in config
+if [ -f "/seeds" ]
+then
+    echo "Seeds file passed. Overriding current seeds."
+    cp /seeds "${CHEQD_ROOT_DIR}/config/seeds.txt"
+    CHEQD_NODED_P2P_SEEDS="$(cat "${CHEQD_ROOT_DIR}/config/seeds.txt")"
+    export CHEQD_NODED_P2P_SEEDS
+else
+    echo "No seeds file passed. Skipping and retaining existing seeds."
+fi
+
+# Check if a node_key file has been passed in config
+if [ -f "/node_key" ]
+then
+    echo "Node key file passed. Overriding current key."
+    cp /node_key "${CHEQD_ROOT_DIR}/config/node_key.json"
+else
+    echo "No node key file passed. Skipping and retaining existing node key."
+fi
+
+# Check if a priv_validator_key file has been passed in config
+if [ -f "/priv_validator_key" ]
+then
+    echo "Private validator key file passed. Replacing current key."
+    cp /priv_validator_key "${CHEQD_ROOT_DIR}/config/priv_validator_key.json"
+else
+    echo "No private validator key file passed. Skipping and retaining existing key."
+fi
+
+# Run node
+cheqd-noded start
diff --git a/docker/localnet/container-env/observer-0.env b/docker/localnet/container-env/observer-0.env
new file mode 100644
index 000000000..2851f7d7b
--- /dev/null
+++ b/docker/localnet/container-env/observer-0.env
@@ -0,0 +1,13 @@
+# Environment variables used by the container
+
+# General
+CHEQD_NODED_MONIKER="observer-0"
+CHEQD_NODED_RPC_LADDR="tcp://0.0.0.0:26657"
+CHEQD_NODED_API_ENABLE="true"
+CHEQD_NODED_MINIMUM_GAS_PRICES="25ncheq" 
+# Consensus
+CHEQD_NODED_CONSENSUS_TIMEOUT_PROPOSE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PREVOTE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PRECOMMIT="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_COMMIT="500ms"
+CHEQD_NODED_CREATE_EMPTY_BLOCKS="false"
diff --git a/docker/localnet/container-env/seed-0.env b/docker/localnet/container-env/seed-0.env
new file mode 100644
index 000000000..856a997a9
--- /dev/null
+++ b/docker/localnet/container-env/seed-0.env
@@ -0,0 +1,17 @@
+# Environment variables used by the container
+
+# General
+CHEQD_NODED_MONIKER="seed-0"
+CHEQD_NODED_RPC_LADDR="tcp://0.0.0.0:26657"
+CHEQD_NODED_API_ENABLE="true"
+CHEQD_NODED_MINIMUM_GAS_PRICES="25ncheq" 
+
+# Seed specific
+CHEQD_NODED_P2P_SEED_MODE
+
+# Consensus
+CHEQD_NODED_CONSENSUS_TIMEOUT_PROPOSE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PREVOTE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PRECOMMIT="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_COMMIT="500ms"
+CHEQD_NODED_CREATE_EMPTY_BLOCKS="false"
diff --git a/docker/localnet/container-env/validator-0.env b/docker/localnet/container-env/validator-0.env
new file mode 100644
index 000000000..841c2f8c6
--- /dev/null
+++ b/docker/localnet/container-env/validator-0.env
@@ -0,0 +1,13 @@
+# Environment variables used by the container
+
+# General
+CHEQD_NODED_MONIKER="validator-0"
+CHEQD_NODED_RPC_LADDR="tcp://0.0.0.0:26657"
+CHEQD_NODED_API_ENABLE="true"
+CHEQD_NODED_MINIMUM_GAS_PRICES="25ncheq" 
+# Consensus
+CHEQD_NODED_CONSENSUS_TIMEOUT_PROPOSE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PREVOTE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PRECOMMIT="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_COMMIT="500ms"
+CHEQD_NODED_CREATE_EMPTY_BLOCKS="false"
diff --git a/docker/localnet/container-env/validator-1.env b/docker/localnet/container-env/validator-1.env
new file mode 100644
index 000000000..6ddd7b148
--- /dev/null
+++ b/docker/localnet/container-env/validator-1.env
@@ -0,0 +1,13 @@
+# Environment variables used by the container
+
+# General
+CHEQD_NODED_MONIKER="validator-1"
+CHEQD_NODED_RPC_LADDR="tcp://0.0.0.0:26657"
+CHEQD_NODED_API_ENABLE="true"
+CHEQD_NODED_MINIMUM_GAS_PRICES="25ncheq" 
+# Consensus
+CHEQD_NODED_CONSENSUS_TIMEOUT_PROPOSE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PREVOTE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PRECOMMIT="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_COMMIT="500ms"
+CHEQD_NODED_CREATE_EMPTY_BLOCKS="false"
diff --git a/docker/localnet/container-env/validator-2.env b/docker/localnet/container-env/validator-2.env
new file mode 100644
index 000000000..392af9f58
--- /dev/null
+++ b/docker/localnet/container-env/validator-2.env
@@ -0,0 +1,13 @@
+# Environment variables used by the container
+
+# General
+CHEQD_NODED_MONIKER="validator-2"
+CHEQD_NODED_RPC_LADDR="tcp://0.0.0.0:26657"
+CHEQD_NODED_API_ENABLE="true"
+CHEQD_NODED_MINIMUM_GAS_PRICES="25ncheq" 
+# Consensus
+CHEQD_NODED_CONSENSUS_TIMEOUT_PROPOSE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PREVOTE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PRECOMMIT="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_COMMIT="500ms"
+CHEQD_NODED_CREATE_EMPTY_BLOCKS="false"
diff --git a/docker/localnet/container-env/validator-3.env b/docker/localnet/container-env/validator-3.env
new file mode 100644
index 000000000..5a9d44be5
--- /dev/null
+++ b/docker/localnet/container-env/validator-3.env
@@ -0,0 +1,13 @@
+# Environment variables used by the container
+
+# General
+CHEQD_NODED_MONIKER="validator-3"
+CHEQD_NODED_RPC_LADDR="tcp://0.0.0.0:26657"
+CHEQD_NODED_API_ENABLE="true"
+CHEQD_NODED_MINIMUM_GAS_PRICES="25ncheq" 
+# Consensus
+CHEQD_NODED_CONSENSUS_TIMEOUT_PROPOSE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PREVOTE="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_PRECOMMIT="500ms"
+CHEQD_NODED_CONSENSUS_TIMEOUT_COMMIT="500ms"
+CHEQD_NODED_CREATE_EMPTY_BLOCKS="false"
diff --git a/docker/localnet/docker-compose.env b/docker/localnet/docker-compose.env
new file mode 100644
index 000000000..921c9c241
--- /dev/null
+++ b/docker/localnet/docker-compose.env
@@ -0,0 +1,12 @@
+# Environment variables used by Docker Compose
+
+###############################################################
+###             REQUIRED: Node/network selection           ###
+###############################################################
+# Define cheqd-noded image source. Change if using your own build.
+CHEQD_NODE_IMAGE="ghcr.io/cheqd/cheqd-node"
+
+# Define cheqd-noded software release version
+# Current MAINNET recommended version: v0.3.1
+# Current TESTNET recommended version: v0.3.1
+CHEQD_NODE_VERSION="0.3.1"
diff --git a/docker/localnet/docker-compose.yml b/docker/localnet/docker-compose.yml
new file mode 100644
index 000000000..bdedbfa4b
--- /dev/null
+++ b/docker/localnet/docker-compose.yml
@@ -0,0 +1,239 @@
+version: '3.7'
+
+services:
+  validator-0:
+    image: ${CHEQD_NODE_IMAGE}:${CHEQD_NODE_VERSION}
+    ports:
+      - target: 26656
+        published: 26656    # Tendermint peer-to-peer (P2P) port
+      - target: 26657
+        published: 26657    # Tendermint RPC port
+      - target: 1317
+        published: 1317     # Cosmos REST API port
+      - target: 9090
+        published: 9090     # gRPC port
+      - target: 9091
+        published: 9091     # gRPC-Gateway port
+      - target: 26660
+        published: 26660    # Prometheus metrics port
+    volumes:
+      - type: volume
+        source: validator-0-data
+        target: /home/cheqd
+    env_file:
+      - container-env/validator-0.env
+    configs:
+      - source: genesis
+        target: /genesis
+      - source: seeds
+        target: /seeds
+      - source: validator-0-node-key
+        target: /node_key
+      - source: validator-0-priv-val-key
+        target: /priv_validator_key
+
+  validator-1:
+    image: ${CHEQD_NODE_IMAGE}:${CHEQD_NODE_VERSION}
+    ports:
+      - target: 26656
+        published: 26756    # Tendermint peer-to-peer (P2P) port
+      - target: 26657
+        published: 26757    # Tendermint RPC port
+      - target: 1317
+        published: 1417     # Cosmos REST API port
+      - target: 9090
+        published: 9190     # gRPC port
+      - target: 9091
+        published: 9191     # gRPC-Gateway port
+      - target: 26660
+        published: 26760    # Prometheus metrics port
+    volumes:
+      - type: volume
+        source: validator-1-data
+        target: /home/cheqd
+    env_file:
+      - container-env/validator-1.env
+    configs:
+      - source: genesis
+        target: /genesis
+      - source: seeds
+        target: /seeds
+      - source: validator-1-node-key
+        target: /node_key
+      - source: validator-1-priv-val-key
+        target: /priv_validator_key
+
+  validator-2:
+    image: ${CHEQD_NODE_IMAGE}:${CHEQD_NODE_VERSION}
+    ports:
+      - target: 26656
+        published: 26856    # Tendermint peer-to-peer (P2P) port
+      - target: 26657
+        published: 26857    # Tendermint RPC port
+      - target: 1317
+        published: 1517     # Cosmos REST API port
+      - target: 9090
+        published: 9290     # gRPC port
+      - target: 9091
+        published: 9291     # gRPC-Gateway port
+      - target: 26660
+        published: 26860    # Prometheus metrics port
+    volumes:
+      - type: volume
+        source: validator-2-data
+        target: /home/cheqd
+    env_file:
+      - container-env/validator-2.env
+    configs:
+      - source: genesis
+        target: /genesis
+      - source: seeds
+        target: /seeds
+      - source: validator-2-node-key
+        target: /node_key
+      - source: validator-2-priv-val-key
+        target: /priv_validator_key
+
+  validator-3:
+    image: ${CHEQD_NODE_IMAGE}:${CHEQD_NODE_VERSION}
+    ports:
+      - target: 26656
+        published: 26956    # Tendermint peer-to-peer (P2P) port
+      - target: 26657
+        published: 26957    # Tendermint RPC port
+      - target: 1317
+        published: 1617     # Cosmos REST API port
+      - target: 9090
+        published: 9390     # gRPC port
+      - target: 9091
+        published: 9391     # gRPC-Gateway port
+      - target: 26660
+        published: 26960    # Prometheus metrics port
+    volumes:
+      - type: volume
+        source: validator-3-data
+        target: /home/cheqd
+    env_file:
+      - container-env/validator-3.env
+    configs:
+      - source: genesis
+        target: /genesis
+      - source: seeds
+        target: /seeds
+      - source: validator-3-node-key
+        target: /node_key
+      - source: validator-3-priv-val-key
+        target: /priv_validator_key
+
+  seed-0:
+    image: ${CHEQD_NODE_IMAGE}:${CHEQD_NODE_VERSION}
+    ports:
+      - target: 26656
+        published: 27056    # Tendermint peer-to-peer (P2P) port
+      - target: 26657
+        published: 27057    # Tendermint RPC port
+      - target: 1317
+        published: 1717     # Cosmos REST API port
+      - target: 9090
+        published: 9490     # gRPC port
+      - target: 9091
+        published: 9491     # gRPC-Gateway port
+      - target: 26660
+        published: 27060    # Prometheus metrics port
+    volumes:
+      - type: volume
+        source: seed-0-data
+        target: /home/cheqd
+    env_file:
+      - container-env/seed-0.env
+    configs:
+      - source: genesis
+        target: /genesis
+      - source: seeds
+        target: /seeds
+      - source: seed-0-node-key
+        target: /node_key
+      - source: seed-0-priv-val-key
+        target: /priv_validator_key
+
+  observer-0:
+    image: ${CHEQD_NODE_IMAGE}:${CHEQD_NODE_VERSION}
+    ports:
+      - target: 26656
+        published: 27156    # Tendermint peer-to-peer (P2P) port
+      - target: 26657
+        published: 27157    # Tendermint RPC port
+      - target: 1317
+        published: 1817     # Cosmos REST API port
+      - target: 9090
+        published: 9590     # gRPC port
+      - target: 9091
+        published: 9591     # gRPC-Gateway port
+      - target: 26660
+        published: 27160    # Prometheus metrics port
+    volumes:
+      - type: volume
+        source: observer-0-data
+        target: /home/cheqd
+    env_file:
+      - container-env/observer-0.env
+    configs:
+      - source: genesis
+        target: /genesis
+      - source: seeds
+        target: /seeds
+      - source: observer-0-node-key
+        target: /node_key
+      - source: observer-0-priv-val-key
+        target: /priv_validator_key
+
+configs:
+  # Genesis and seeds
+  genesis:
+    file: network-config/genesis.json
+  seeds:
+    file: network-config/seeds.txt
+
+  # Validator 0
+  validator-0-node-key:
+    file: network-config/validator-0/config/node_key.json
+  validator-0-priv-val-key:
+    file: network-config/validator-0/config/priv_validator_key.json
+
+  # Validator 1
+  validator-1-node-key:
+    file: network-config/validator-1/config/node_key.json
+  validator-1-priv-val-key:
+    file: network-config/validator-1/config/priv_validator_key.json
+
+  # Validator 2
+  validator-2-node-key:
+    file: network-config/validator-2/config/node_key.json
+  validator-2-priv-val-key:
+    file: network-config/validator-2/config/priv_validator_key.json
+
+  # Validator 3
+  validator-3-node-key:
+    file: network-config/validator-3/config/node_key.json
+  validator-3-priv-val-key:
+    file: network-config/validator-3/config/priv_validator_key.json
+
+  # Seed 0
+  seed-0-node-key:
+    file: network-config/seed-0/config/node_key.json
+  seed-0-priv-val-key:
+    file: network-config/seed-0/config/priv_validator_key.json
+
+  # Observer 0
+  observer-0-node-key:
+    file: network-config/observer-0/config/node_key.json
+  observer-0-priv-val-key:
+    file: network-config/observer-0/config/priv_validator_key.json
+
+volumes:
+  validator-0-data:
+  validator-1-data:
+  validator-2-data:
+  validator-3-data:
+  seed-0-data:
+  observer-0-data:
diff --git a/tests/networks/tools/gen-network-config-base.sh b/docker/localnet/gen-network-config.sh
similarity index 94%
rename from tests/networks/tools/gen-network-config-base.sh
rename to docker/localnet/gen-network-config.sh
index af1876a55..700ebfb81 100644
--- a/tests/networks/tools/gen-network-config-base.sh
+++ b/docker/localnet/gen-network-config.sh
@@ -202,5 +202,27 @@ do
   cp "${TMP_NODE_HOME}/config/genesis.json" "${NODE_HOME}/config/genesis.json"
 done
 
-# We don't need tmp node anymore
+# Leave one copy of genesis in the root of network-config
+cp "${TMP_NODE_HOME}/config/genesis.json" "${NETWORK_CONFIG_DIR}/genesis.json"
+
+# Generate seeds.txt
+SEEDS_STR=""
+
+for ((i=0 ; i<SEEDS_COUNT ; i++))
+do
+  NODE_MONIKER="seed-$i"
+  NODE_P2P_PORT="26656"
+  NODE_HOME="${NETWORK_CONFIG_DIR}/${NODE_MONIKER}"
+
+  if ((i != 0))
+  then
+  SEEDS_STR="${SEEDS_STR},"
+  fi
+
+  SEEDS_STR="${SEEDS_STR}$(cat "${NODE_HOME}/node_id.txt")@${NODE_MONIKER}:${NODE_P2P_PORT}"
+done
+
+echo "${SEEDS_STR}" > "${NETWORK_CONFIG_DIR}/seeds.txt"
+
+# We don't need the tmp node anymore
 rm -rf "${TMP_NODE_HOME}"
diff --git a/tests/cli/import_keys.sh b/docker/localnet/import_keys.sh
similarity index 100%
rename from tests/cli/import_keys.sh
rename to docker/localnet/import_keys.sh
diff --git a/docker/persistent-chains/container.env b/docker/persistent-chains/container.env
index db5fd3921..f95bf08c7 100644
--- a/docker/persistent-chains/container.env
+++ b/docker/persistent-chains/container.env
@@ -7,10 +7,10 @@
 
 # Externally-reachable address for the node
 # Syntax is <externally-reachable-ip-address>:26656 or <dns-address>:26656
-P2P_EXTERNAL_ADDRESS=":26656"
+CHEQD_NODED_P2P_EXTERNAL_ADDRESS=":26656"
 
 # A custom human-readable name for this node
-NODE_MONIKER=""
+CHEQD_NODED_MONIKER=""
 
 ###############################################################
 ###             OPTIONAL: Per-node safe defaults            ###
@@ -19,19 +19,19 @@ NODE_MONIKER=""
 # These can be changed WITHOUT major network-wide consequences.
 
 # Default gas price. Higher gas prices can impact inclusion in mempool.
-MIN_GAS_PRICES="25ncheq" 
+CHEQD_NODED_MINIMUM_GAS_PRICES="25ncheq" 
 
 # Comma-separated list of persistent peers to maintain connections to.
 # Syntax is <persistent-peer-node-id>@<ip-address-or-dns-name>:<p2p-port>
-P2P_PERSISTENT_PEERS=""
+CHEQD_NODED_P2P_PERSISTENT_PEERS=""
 
 # Max. send/receive rate throttle. Values below compute to ~20 MB/s.
 # Can be increased if your node can handle higher network throughput.
-P2P_SEND_RATE=20000000
-P2P_RECV_RATE=20000000 
+CHEQD_NODED_P2P_SEND_RATE=20000000
+CHEQD_NODED_P2P_RECV_RATE=20000000 
 
 # Flip whether the node is a seed. For most users, the answer is false.
-P2P_SEED_MODE=false
+CHEQD_NODED_P2P_SEED_MODE=false
 
 
 ###############################################################
@@ -41,15 +41,13 @@ P2P_SEED_MODE=false
 # Changing these CAN cause connectivity issues for your node.
 # Only change if you understand the consequences.
 
- # Fetches correct genesis.json and seeds.txt from GitHub
-NETWORK=testnet
 # TODO: Replace with block-sync on TM upgrade
-FASTSYNC_VERSION="v0"
+CHEQD_NODED_FASTSYNC_VERSION="v0"
 # TODO: Check if empty block creation is actually turned off
-CREATE_EMPTY_BLOCKS=false
+CHEQD_NODED_CONSENSUS_CREATE_EMPTY_BLOCKS=false
 # Max. message payload size. Default is ~10 KB
-P2P_MAX_PACKET_MSG_PAYLOAD_SIZE=10240
+CHEQD_NODED_P2P_MAX_PACKET_MSG_PAYLOAD_SIZE=10240
 # Tendermint P2P port. Port exposed on host is more relevant to control access.
-P2P_LADDR="tcp://0.0.0.0:26656"
+CHEQD_NODED_P2P_LADDR="tcp://0.0.0.0:26656"
 # Tendermint RPC port. Port exposed on host is more relevant to control access.
-RPC_LADDR="tcp://0.0.0.0:26657"
+CHEQD_NODED_RPC_LADDR="tcp://0.0.0.0:26657"
diff --git a/docker/persistent-chains/docker-compose.yml b/docker/persistent-chains/docker-compose.yml
index a60bda95c..03db267a1 100644
--- a/docker/persistent-chains/docker-compose.yml
+++ b/docker/persistent-chains/docker-compose.yml
@@ -2,19 +2,20 @@ version: '3.7'
 
 services:
   cheqd_node:
-    # CAUTION: Change CHEQD_NODE_VERSION to local in docker-compose.env if building your own image in section below
-    image: ghcr.io/cheqd/cheqd-node:${CHEQD_NODE_VERSION}
     # OPTIONAL: Rebuild cheq-node Docker image, if you want build your own
     # Default is to pull in the pre-published image on GitHub Container Registry
     # SYNTAX: docker compose --env-file docker/persistent-chains/docker-compose.env -f docker/persistent-chains/docker-compose.yml build --no-cache
-    build:
-      context: ../..
-      dockerfile: docker/Dockerfile
-      target: node
-      args:
-        CHEQD_HOME_DIR: ${CHEQD_HOME_DIR}
-        UID: ${UID}
-        GID: ${GID}
+    # build:
+    #  context: ../..
+    #  dockerfile: docker/Dockerfile
+    #  target: node
+    #  args:
+    #    CHEQD_HOME_DIR: ${CHEQD_HOME_DIR}
+    #    UID: ${UID}
+    #    GID: ${GID}
+    # CAUTION: Change CHEQD_NODE_VERSION to local in docker-compose.env if building your own image in section below
+    # image: cheqd-node-custom-build:${CHEQD_NODE_VERSION}
+    image: ghcr.io/cheqd/cheqd-node:${CHEQD_NODE_VERSION}
     user: cheqd
     configs:
       - source: genesis
@@ -79,3 +80,9 @@ volumes:
     name: cheqd_volume_${CHEQD_NETWORK}
     driver: ${CHEQD_DOCKER_VOLUME_DRIVER}
     external: ${CHEQD_DOCKER_VOLUME_IS_EXTERNAL}
+
+# secrets:
+#  node-key:
+#    file:
+#  validator-key:
+#    file:
diff --git a/docker/persistent-chains/entrypoint.sh b/docker/persistent-chains/entrypoint.sh
deleted file mode 100644
index ba91d3e21..000000000
--- a/docker/persistent-chains/entrypoint.sh
+++ /dev/null
@@ -1,54 +0,0 @@
-#!/bin/bash
-
-# Inits node configuration and runs the node.
-# e -> exit immediately, u -> treat unset variables as errors and immediately, o -> sets the exit code to the rightmost command 
-set -euo pipefail
-
-# within the container, $HOME=/home/cheqd
-CHEQD_ROOT_DIR="$HOME/.cheqdnode"
-
-# Init node config directory
-if [ ! -d "${CHEQD_ROOT_DIR}/config" ]
-then
-    echo "Node config not found. Initializing."
-    cheqd-noded init "$NODE_MONIKER" --home "${CHEQD_ROOT_DIR}"
-else
-    echo "Node config exists. Skipping initialization."
-fi
-
-# Check if a genesis file has been passed in config
-if [ -f "/genesis" ]
-then
-    echo "Genesis file passed. Adding/replacing current genesis file."
-    cp /genesis "${CHEQD_ROOT_DIR}/config/genesis.json"
-else
-    echo "No genesis file passed. Skipping and retaining existing genesis."
-fi
-
-# Check if a genesis file has been passed in config
-if [ -f "/seeds" ]
-then
-    echo "Seeds file passed. Replacing current seeds."
-    cp /seeds "${CHEQD_ROOT_DIR}/config/seeds.txt"
-    cheqd-noded configure p2p seeds "$(cat "${CHEQD_ROOT_DIR}/config/seeds.txt")"
-else
-    echo "No seeds file passed. Skipping and retaining existing seeds."
-fi
-
-# Run configure
-# `! -z` is used instead of `-n` to distinguish null and empty values
-if [[ -n ${CREATE_EMPTY_BLOCKS+x} ]]; then cheqd-noded configure create-empty-blocks "${CREATE_EMPTY_BLOCKS}"; fi
-if [[ -n ${FASTSYNC_VERSION+x} ]]; then cheqd-noded configure fastsync-version "${FASTSYNC_VERSION}"; fi
-if [[ -n ${MIN_GAS_PRICES+x} ]]; then cheqd-noded configure min-gas-prices "${MIN_GAS_PRICES}"; fi
-if [[ -n ${RPC_LADDR+x} ]]; then cheqd-noded configure rpc-laddr "${RPC_LADDR}"; fi
-if [[ -n ${P2P_EXTERNAL_ADDRESS+x} ]]; then cheqd-noded configure p2p external-address "${P2P_EXTERNAL_ADDRESS}"; fi
-if [[ -n ${P2P_LADDR+x} ]]; then cheqd-noded configure p2p laddr "${P2P_LADDR}"; fi
-if [[ -n ${P2P_MAX_PACKET_MSG_PAYLOAD_SIZE+x} ]]; then cheqd-noded configure p2p max-packet-msg-payload-size "${P2P_MAX_PACKET_MSG_PAYLOAD_SIZE}"; fi
-if [[ -n ${P2P_SEEDS+x} ]]; then cheqd-noded configure p2p seeds "${P2P_SEEDS}"; fi
-if [[ -n ${P2P_PERSISTENT_PEERS+x} ]]; then cheqd-noded configure p2p persistent-peers "${P2P_PERSISTENT_PEERS}"; fi
-if [[ -n ${P2P_SEED_MODE+x} ]]; then cheqd-noded configure p2p seed-mode "${P2P_SEED_MODE}"; fi
-if [[ -n ${P2P_RECV_RATE+x} ]]; then cheqd-noded configure p2p recv-rate "${P2P_RECV_RATE}"; fi
-if [[ -n ${P2P_SEND_RATE+x} ]]; then cheqd-noded configure p2p send-rate "${P2P_SEND_RATE}"; fi
-
-# Run node
-cheqd-noded start
diff --git a/docs/setup-and-configure/docker-install.md b/docs/setup-and-configure/docker-install.md
index bb92af832..0ecdfaf67 100644
--- a/docs/setup-and-configure/docker-install.md
+++ b/docs/setup-and-configure/docker-install.md
@@ -21,7 +21,7 @@ docker pull ghcr.io/cheqd/cheqd-node:latest
 To build the image:
 
 * Go to the repository root;
-* Run `docker build -f docker/Dockerfile -t cheqd-node .`.
+* Run `docker build --target node -t cheqd-node -f docker/Dockerfile .`.
 
 Default home directory for `cheqd` user is `/cheqd`. It can be overridden via `CHEQD_HOME_DIR` build argument. Example: `--build-arg CHEQD_HOME_DIR=/home/cheqd`.
 
diff --git a/tests/cli/run_all.sh b/tests/e2e-bash/run_all.sh
similarity index 100%
rename from tests/cli/run_all.sh
rename to tests/e2e-bash/run_all.sh
diff --git a/tests/cli/tests/common.sh b/tests/e2e-bash/tests/common.sh
similarity index 92%
rename from tests/cli/tests/common.sh
rename to tests/e2e-bash/tests/common.sh
index 0b6286daf..b40674da4 100644
--- a/tests/cli/tests/common.sh
+++ b/tests/e2e-bash/tests/common.sh
@@ -50,3 +50,9 @@ function assert_tx_successful() {
     OUTPUT=$1
     assert_eq "$(echo "${OUTPUT}" | jq -r ".code")" "0"
 }
+
+function assert_tx_code() {
+    OUTPUT=$1
+    CODE=$2
+    assert_eq "$(echo "${OUTPUT}" | jq -r ".code")" "$CODE"
+}
diff --git a/tests/cli/tests/test_create_did.sh b/tests/e2e-bash/tests/test_create_did.sh
similarity index 100%
rename from tests/cli/tests/test_create_did.sh
rename to tests/e2e-bash/tests/test_create_did.sh
diff --git a/tests/e2e-bash/tests/test_create_did_with_invalid_pubkey.sh b/tests/e2e-bash/tests/test_create_did_with_invalid_pubkey.sh
new file mode 100644
index 000000000..75596ca70
--- /dev/null
+++ b/tests/e2e-bash/tests/test_create_did_with_invalid_pubkey.sh
@@ -0,0 +1,36 @@
+#!/bin/bash
+
+set -euox pipefail
+
+SCRIPT_DIR="$( cd -- "$( dirname -- "${BASH_SOURCE[0]}" )" &> /dev/null && pwd )"
+# shellcheck source=/dev/null
+source "$SCRIPT_DIR/common.sh"
+
+
+# Generate Alice identity key
+ALICE_VER_KEY="$(cheqd-noded debug ed25519 random)"
+ALICE_VER_PRIV_BASE_64=$(echo "${ALICE_VER_KEY}" | jq -r ".priv_key_base_64")
+
+# Build CreateDid message
+DID="did:cheqd:testnet:$(random_string)"
+KEY_ID="${DID}#key1"
+
+MSG_CREATE_DID='{
+  "id": "'${DID}'",
+  "verification_method": [{
+    "id": "'${KEY_ID}'",
+    "type": "Ed25519VerificationKey2020",
+    "controller": "'${DID}'",
+    "public_key_multibase": "z6qdb7tjBeqaaWHU9W8nLHoxtZzro4ka"
+  }],
+  "authentication": [
+    "'${KEY_ID}'"
+  ]
+}';
+
+# Post the message
+# shellcheck disable=SC2086
+RESULT=$(cheqd-noded tx cheqd create-did "${MSG_CREATE_DID}" "${KEY_ID}" --ver-key "${ALICE_VER_PRIV_BASE_64}" \
+  --from "${BASE_ACCOUNT_1}" ${TX_PARAMS})
+
+assert_tx_code "$RESULT" "1100"
diff --git a/tests/cli/tests/test_query_did.sh b/tests/e2e-bash/tests/test_query_did.sh
similarity index 100%
rename from tests/cli/tests/test_query_did.sh
rename to tests/e2e-bash/tests/test_query_did.sh
diff --git a/tests/cli/tests/test_query_did_via_rest.sh b/tests/e2e-bash/tests/test_query_did_via_rest.sh
similarity index 100%
rename from tests/cli/tests/test_query_did_via_rest.sh
rename to tests/e2e-bash/tests/test_query_did_via_rest.sh
diff --git a/tests/cli/tests/test_rotate_key.sh b/tests/e2e-bash/tests/test_rotate_key.sh
similarity index 100%
rename from tests/cli/tests/test_rotate_key.sh
rename to tests/e2e-bash/tests/test_rotate_key.sh
diff --git a/tests/cli/tests/test_update_did.sh b/tests/e2e-bash/tests/test_update_did.sh
similarity index 100%
rename from tests/cli/tests/test_update_did.sh
rename to tests/e2e-bash/tests/test_update_did.sh
diff --git a/tests/e2e-complex/deb-install/add-observer.sh b/tests/e2e-complex/deb-install/add-observer.sh
new file mode 100755
index 000000000..345009d69
--- /dev/null
+++ b/tests/e2e-complex/deb-install/add-observer.sh
@@ -0,0 +1,29 @@
+#!/bin/bash
+
+set -euox pipefail
+sudo chown -R cheqd:cheqd "/home/runner/cheqd/"
+
+sudo -u cheqd cheqd-noded init node5
+
+VALIDATOR_0_ID=$(cat "${NODE_CONFIGS_BASE}/validator-0/node_id.txt")
+PERSISTENT_PEERS="${VALIDATOR_0_ID}@127.0.0.1:26656"
+sudo -u cheqd cheqd-noded configure p2p persistent-peers "${PERSISTENT_PEERS}"
+
+sudo cp "${NODE_CONFIGS_BASE}/validator-0/config/genesis.json" "/home/runner/cheqd/.cheqdnode/config"
+
+sudo chmod -R 777 "/home/runner/cheqd/.cheqdnode"
+
+# Configure ports because they conflict with localnet
+sudo -u cheqd cheqd-noded configure p2p laddr "tcp://0.0.0.0:26676"
+sudo -u cheqd cheqd-noded configure rpc-laddr "tcp://0.0.0.0:26677"
+
+# TODO: Use environment variables
+sudo -u cheqd sed -i.bak 's|pprof_laddr = "localhost:6060"|pprof_laddr = "localhost:6070"|g' /home/runner/cheqd/.cheqdnode/config/config.toml
+sudo -u cheqd sed -i.bak 's|address = "0.0.0.0:9090"|address = "0.0.0.0:9100"|g' /home/runner/cheqd/.cheqdnode/config/app.toml
+sudo -u cheqd sed -i.bak 's|address = "0.0.0.0:9091"|address = "0.0.0.0:9101"|g' /home/runner/cheqd/.cheqdnode/config/app.toml
+sudo -u cheqd sed -i.bak 's|address = "tcp://0.0.0.0:1317"|address = "tcp://0.0.0.0:1327"|g' /home/runner/cheqd/.cheqdnode/config/app.toml
+sudo -u cheqd sed -i.bak 's|address = ":8080"|address = ":8090"|g' /home/runner/cheqd/.cheqdnode/config/app.toml
+
+sudo systemctl start cheqd-noded
+sleep 10
+systemctl status cheqd-noded
diff --git a/tests/networks/docker-compose-localnet/promote-validator.sh b/tests/e2e-complex/deb-install/promote-validator.sh
similarity index 100%
rename from tests/networks/docker-compose-localnet/promote-validator.sh
rename to tests/e2e-complex/deb-install/promote-validator.sh
diff --git a/tests/networks/docker-compose-localnet/wait.sh b/tests/e2e-complex/deb-install/wait.sh
similarity index 84%
rename from tests/networks/docker-compose-localnet/wait.sh
rename to tests/e2e-complex/deb-install/wait.sh
index 5db8422cd..6d8fe54c8 100755
--- a/tests/networks/docker-compose-localnet/wait.sh
+++ b/tests/e2e-complex/deb-install/wait.sh
@@ -6,8 +6,8 @@ set -euox pipefail
 
 cmd="$1"
 
-for _ in 1 2 3; do
-    sleep 60
+for _ in 1 2 3 4 5 6 7 8 9; do
+    sleep 20
     if eval "$cmd"; then
         echo "Waiter returned success!"
         exit 0
diff --git a/tests/ibc-defi/README.md b/tests/e2e-complex/ibc-defi/README.md
similarity index 100%
rename from tests/ibc-defi/README.md
rename to tests/e2e-complex/ibc-defi/README.md
diff --git a/tests/ibc-defi/cheqd/cheqd.Dockerfile b/tests/e2e-complex/ibc-defi/cheqd/cheqd.Dockerfile
similarity index 100%
rename from tests/ibc-defi/cheqd/cheqd.Dockerfile
rename to tests/e2e-complex/ibc-defi/cheqd/cheqd.Dockerfile
diff --git a/tests/ibc-defi/cheqd/cheqd_init.sh b/tests/e2e-complex/ibc-defi/cheqd/cheqd_init.sh
similarity index 100%
rename from tests/ibc-defi/cheqd/cheqd_init.sh
rename to tests/e2e-complex/ibc-defi/cheqd/cheqd_init.sh
diff --git a/tests/ibc-defi/docker-compose.yaml b/tests/e2e-complex/ibc-defi/docker-compose.yaml
similarity index 100%
rename from tests/ibc-defi/docker-compose.yaml
rename to tests/e2e-complex/ibc-defi/docker-compose.yaml
diff --git a/tests/ibc-defi/gravity/gravity.Dockerfile b/tests/e2e-complex/ibc-defi/gravity/gravity.Dockerfile
similarity index 100%
rename from tests/ibc-defi/gravity/gravity.Dockerfile
rename to tests/e2e-complex/ibc-defi/gravity/gravity.Dockerfile
diff --git a/tests/ibc-defi/gravity/gravity_init.sh b/tests/e2e-complex/ibc-defi/gravity/gravity_init.sh
similarity index 100%
rename from tests/ibc-defi/gravity/gravity_init.sh
rename to tests/e2e-complex/ibc-defi/gravity/gravity_init.sh
diff --git a/tests/ibc-defi/hermes/config.toml b/tests/e2e-complex/ibc-defi/hermes/config.toml
similarity index 100%
rename from tests/ibc-defi/hermes/config.toml
rename to tests/e2e-complex/ibc-defi/hermes/config.toml
diff --git a/tests/ibc-defi/hermes/hermes.Dockerfile b/tests/e2e-complex/ibc-defi/hermes/hermes.Dockerfile
similarity index 100%
rename from tests/ibc-defi/hermes/hermes.Dockerfile
rename to tests/e2e-complex/ibc-defi/hermes/hermes.Dockerfile
diff --git a/tests/ibc-defi/hermes/hermes_init.sh b/tests/e2e-complex/ibc-defi/hermes/hermes_init.sh
similarity index 100%
rename from tests/ibc-defi/hermes/hermes_init.sh
rename to tests/e2e-complex/ibc-defi/hermes/hermes_init.sh
diff --git a/tests/ibc-defi/ibc-transfer-test.sh b/tests/e2e-complex/ibc-defi/ibc-transfer-test.sh
similarity index 100%
rename from tests/ibc-defi/ibc-transfer-test.sh
rename to tests/e2e-complex/ibc-defi/ibc-transfer-test.sh
diff --git a/tests/ibc-defi/osmosis/osmosis.Dockerfile b/tests/e2e-complex/ibc-defi/osmosis/osmosis.Dockerfile
similarity index 100%
rename from tests/ibc-defi/osmosis/osmosis.Dockerfile
rename to tests/e2e-complex/ibc-defi/osmosis/osmosis.Dockerfile
diff --git a/tests/ibc-defi/osmosis/osmosis_init.sh b/tests/e2e-complex/ibc-defi/osmosis/osmosis_init.sh
similarity index 100%
rename from tests/ibc-defi/osmosis/osmosis_init.sh
rename to tests/e2e-complex/ibc-defi/osmosis/osmosis_init.sh
diff --git a/tests/networks/docker-compose-localnet/.env b/tests/e2e-complex/upgrade/.env
similarity index 100%
rename from tests/networks/docker-compose-localnet/.env
rename to tests/e2e-complex/upgrade/.env
diff --git a/tests/upgrade/common.sh b/tests/e2e-complex/upgrade/common.sh
similarity index 100%
rename from tests/upgrade/common.sh
rename to tests/e2e-complex/upgrade/common.sh
diff --git a/tests/upgrade/docker-compose.yml b/tests/e2e-complex/upgrade/docker-compose.yml
similarity index 100%
rename from tests/upgrade/docker-compose.yml
rename to tests/e2e-complex/upgrade/docker-compose.yml
diff --git a/tests/upgrade/gen_node_configs.sh b/tests/e2e-complex/upgrade/gen_node_configs.sh
similarity index 100%
rename from tests/upgrade/gen_node_configs.sh
rename to tests/e2e-complex/upgrade/gen_node_configs.sh
diff --git a/tests/upgrade/initiate_upgrade.sh b/tests/e2e-complex/upgrade/initiate_upgrade.sh
similarity index 100%
rename from tests/upgrade/initiate_upgrade.sh
rename to tests/e2e-complex/upgrade/initiate_upgrade.sh
diff --git a/tests/upgrade/prepare.sh b/tests/e2e-complex/upgrade/prepare.sh
similarity index 94%
rename from tests/upgrade/prepare.sh
rename to tests/e2e-complex/upgrade/prepare.sh
index 025372e70..dae6f82af 100755
--- a/tests/upgrade/prepare.sh
+++ b/tests/e2e-complex/upgrade/prepare.sh
@@ -18,7 +18,7 @@ bash gen_node_configs.sh
 docker_compose_up "${CHEQD_IMAGE_FROM}" "$(pwd)"
 
 # Wait for start ordering, till height 1
-bash ../networks/tools/wait-for-chain.sh 1
+bash ../../tools/wait-for-chain.sh 1
 
 # Get address of operator which will be used for sending tokens before upgrade
 get_addresses
diff --git a/tests/upgrade/upgrade_and_check.sh b/tests/e2e-complex/upgrade/upgrade_and_check.sh
similarity index 90%
rename from tests/upgrade/upgrade_and_check.sh
rename to tests/e2e-complex/upgrade/upgrade_and_check.sh
index 107f9467f..bd543978e 100755
--- a/tests/upgrade/upgrade_and_check.sh
+++ b/tests/e2e-complex/upgrade/upgrade_and_check.sh
@@ -6,7 +6,7 @@ set -euox pipefail
 . common.sh
 
 # Wait for upgrade height
-bash ../networks/tools/wait-for-chain.sh "$UPGRADE_HEIGHT" $((2 * VOTING_PERIOD))
+bash ../../tools/wait-for-chain.sh "$UPGRADE_HEIGHT" $((2 * VOTING_PERIOD))
 
 # Stop docker-compose service
 docker_compose_down
@@ -20,7 +20,7 @@ docker_compose_up "$CHEQD_IMAGE_TO" "$(pwd)"
 # Check that upgrade was successful
 
 # Wait for upgrade height
-bash ../networks/tools/wait-for-chain.sh $((UPGRADE_HEIGHT + 2))
+bash ../../tools/wait-for-chain.sh $((UPGRADE_HEIGHT + 2))
 
 CURRENT_VERSION=$(docker run --entrypoint cheqd-noded "$CHEQD_IMAGE_TO" version 2>&1)
 
diff --git a/tests/e2e/conftest.py b/tests/e2e-pytest/conftest.py
similarity index 100%
rename from tests/e2e/conftest.py
rename to tests/e2e-pytest/conftest.py
diff --git a/tests/e2e/helpers.py b/tests/e2e-pytest/helpers.py
similarity index 100%
rename from tests/e2e/helpers.py
rename to tests/e2e-pytest/helpers.py
diff --git a/tests/e2e/requirements.txt b/tests/e2e-pytest/requirements.txt
similarity index 100%
rename from tests/e2e/requirements.txt
rename to tests/e2e-pytest/requirements.txt
diff --git a/tests/e2e/test_cosmos.py b/tests/e2e-pytest/test_cosmos.py
similarity index 100%
rename from tests/e2e/test_cosmos.py
rename to tests/e2e-pytest/test_cosmos.py
diff --git a/tests/e2e/test_identity.py b/tests/e2e-pytest/test_identity.py
similarity index 100%
rename from tests/e2e/test_identity.py
rename to tests/e2e-pytest/test_identity.py
diff --git a/tests/e2e/libindy.so b/tests/e2e/libindy.so
deleted file mode 100644
index 178936024..000000000
Binary files a/tests/e2e/libindy.so and /dev/null differ
diff --git a/tests/networks/docker-compose-localnet/add-observer.sh b/tests/networks/docker-compose-localnet/add-observer.sh
deleted file mode 100755
index 68193b69e..000000000
--- a/tests/networks/docker-compose-localnet/add-observer.sh
+++ /dev/null
@@ -1,24 +0,0 @@
-#!/bin/bash
-
-set -euox pipefail
-sudo chown -R cheqd:cheqd "/home/runner/cheqd/"
-
-NODE_CONFIGS_BASE="/home/runner/work/cheqd-node/cheqd-node/tests/networks/docker-compose-localnet/network-config"
-sudo -u cheqd cheqd-noded init node5
-
-VALIDATOR_0_ID=$(cat "${NODE_CONFIGS_BASE}/validator-0/node_id.txt")
-PERSISTENT_PEERS="${VALIDATOR_0_ID}@127.0.0.1:26656"
-sudo -u cheqd cheqd-noded configure p2p persistent-peers "${PERSISTENT_PEERS}"
-
-sudo cp "${NODE_CONFIGS_BASE}/validator-0/config/genesis.json" "/home/runner/cheqd/.cheqdnode/config"
-
-sudo chmod -R 777 "/home/runner/cheqd/.cheqdnode"
-
-sudo -u cheqd cheqd-noded configure p2p laddr "tcp://0.0.0.0:26676"
-sudo -u cheqd cheqd-noded configure rpc-laddr "tcp://0.0.0.0:26677"
-
-
-sudo systemctl start cheqd-noded
-sleep 10
-systemctl status cheqd-noded
-
diff --git a/tests/networks/docker-compose-localnet/docker-compose.yml b/tests/networks/docker-compose-localnet/docker-compose.yml
deleted file mode 100644
index 6a1b9c94f..000000000
--- a/tests/networks/docker-compose-localnet/docker-compose.yml
+++ /dev/null
@@ -1,56 +0,0 @@
-version: '3.2'
-
-services:
-  validator-0:
-    image: "${CHEQD_IMAGE_NAME}"
-    ports:
-      - "26656:26656" # p2p
-      - "26657:26657" # rpc
-    volumes:
-      - "${MOUNT_POINT}/network-config/validator-0:/home/cheqd/.cheqdnode"
-    command: start
-
-  validator-1:
-    image: "${CHEQD_IMAGE_NAME}"
-    ports:
-      - "26659:26656" # p2p
-      - "26660:26657" # rpc
-    volumes:
-      - "${MOUNT_POINT}/network-config/validator-1:/home/cheqd/.cheqdnode"
-    command: start
-
-  validator-2:
-    image: "${CHEQD_IMAGE_NAME}"
-    ports:
-      - "26662:26656" # p2p
-      - "26663:26657" # rpc
-    volumes:
-      - "${MOUNT_POINT}/network-config/validator-2:/home/cheqd/.cheqdnode"
-    command: start
-
-  validator-3:
-    image: "${CHEQD_IMAGE_NAME}"
-    ports:
-      - "26665:26656" # p2p
-      - "26666:26657" # rpc
-    volumes:
-      - "${MOUNT_POINT}/network-config/validator-3:/home/cheqd/.cheqdnode"
-    command: start
-
-  seed-0:
-    image: "${CHEQD_IMAGE_NAME}"
-    ports:
-      - "26668:26656" # p2p
-      - "26669:26657" # rpc
-    volumes:
-      - "${MOUNT_POINT}/network-config/seed-0:/home/cheqd/.cheqdnode"
-    command: start
-
-  observer-0:
-    image: "${CHEQD_IMAGE_NAME}"
-    ports:
-      - "26671:26656" # p2p
-      - "26672:26657" # rpc
-    volumes:
-      - "${MOUNT_POINT}/network-config/observer-0:/home/cheqd/.cheqdnode"
-    command: start
diff --git a/tests/networks/docker-compose-localnet/gen-network-config.sh b/tests/networks/docker-compose-localnet/gen-network-config.sh
deleted file mode 100644
index 5b05b2ad8..000000000
--- a/tests/networks/docker-compose-localnet/gen-network-config.sh
+++ /dev/null
@@ -1,17 +0,0 @@
-#!/bin/bash
-
-# Tweaks network configuration generated by `../tools/gen-network-config.sh` for use with docker-localnet container.
-
-set -euo pipefail
-
-# Generate base network configuration
-bash ../tools/gen-network-config-base.sh cheqd 4 1 1 # 4 validators, 1 observer and 1 seed
-
-# Set peers
-SEED_0_ID=$(cheqd-noded tendermint show-node-id --home "network-config/seed-0")
-PERSISTENT_PEERS="$SEED_0_ID@seed-0:26656"
-sed -i.bak "s/persistent_peers = \"\"/persistent_peers = \"$PERSISTENT_PEERS\"/g" network-config/validator-0/config/config.toml
-sed -i.bak "s/persistent_peers = \"\"/persistent_peers = \"$PERSISTENT_PEERS\"/g" network-config/validator-1/config/config.toml
-sed -i.bak "s/persistent_peers = \"\"/persistent_peers = \"$PERSISTENT_PEERS\"/g" network-config/validator-2/config/config.toml
-sed -i.bak "s/persistent_peers = \"\"/persistent_peers = \"$PERSISTENT_PEERS\"/g" network-config/validator-3/config/config.toml
-sed -i.bak "s/persistent_peers = \"\"/persistent_peers = \"$PERSISTENT_PEERS\"/g" network-config/observer-0/config/config.toml
diff --git a/tests/networks/docker-localnet/Dockerfile b/tests/networks/docker-localnet/Dockerfile
deleted file mode 100644
index 25db8d2f7..000000000
--- a/tests/networks/docker-localnet/Dockerfile
+++ /dev/null
@@ -1,23 +0,0 @@
-FROM cheqd-cli
-
-USER root
-
-RUN apt-get update && export DEBIAN_FRONTEND=noninteractive \
-    && apt-get -y install --no-install-recommends \
-    supervisor \
-    jq \
-    nano
-
-USER cheqd
-
-COPY --chown=cheqd:cheqd tests/networks/tools/gen-network-config-base.sh ./
-COPY --chown=cheqd:cheqd tests/networks/docker-localnet/gen-network-config.sh ./
-COPY tests/networks/docker-localnet/supervisord.conf /etc
-
-RUN chmod +x ./gen-network-config.sh; \
-    ./gen-network-config.sh
-
-EXPOSE 1317 26656 26657 9090
-
-ENTRYPOINT ["/usr/bin/supervisord", "-c", "/etc/supervisord.conf"]
-STOPSIGNAL SIGTERM
diff --git a/tests/networks/docker-localnet/gen-network-config.sh b/tests/networks/docker-localnet/gen-network-config.sh
deleted file mode 100644
index 46846d57d..000000000
--- a/tests/networks/docker-localnet/gen-network-config.sh
+++ /dev/null
@@ -1,23 +0,0 @@
-#!/bin/bash
-
-# Tweaks network configuration generated by `../tools/gen-network-config.sh` for use with docker-localnet container.
-
-set -euo pipefail
-
-# Generate base network configuration
-bash gen-network-config-base.sh cheqd 2 0 0 # 2 validators, 0 observers and 0 seeds
-
-# Change ports for validator-1
-sed -i.bak 's|laddr = "tcp://0.0.0.0:26656"|laddr = "tcp://0.0.0.0:26666"|g' network-config/validator-1/config/config.toml
-sed -i.bak 's|laddr = "tcp://0.0.0.0:26657"|laddr = "tcp://0.0.0.0:26667"|g' network-config/validator-1/config/config.toml
-sed -i.bak 's|pprof_laddr = "localhost:6060"|pprof_laddr = "localhost:6070"|g' network-config/validator-1/config/config.toml
-
-sed -i.bak 's|address = "0.0.0.0:9090"|address = "0.0.0.0:9100"|g' network-config/validator-1/config/app.toml
-sed -i.bak 's|address = "0.0.0.0:9091"|address = "0.0.0.0:9101"|g' network-config/validator-1/config/app.toml
-sed -i.bak 's|address = "tcp://0.0.0.0:1317"|address = "tcp://0.0.0.0:1327"|g' network-config/validator-1/config/app.toml
-sed -i.bak 's|address = ":8080"|address = ":8090"|g' network-config/validator-1/config/app.toml
-
-# Set peers
-VAL_0_ID=$(cheqd-noded tendermint show-node-id --home "network-config/validator-0")
-PERSISTENT_PEERS="$VAL_0_ID@127.0.0.1:26656"
-sed -i.bak "s/persistent_peers = \"\"/persistent_peers = \"$PERSISTENT_PEERS\"/g" network-config/validator-1/config/config.toml
diff --git a/tests/networks/docker-localnet/supervisord.conf b/tests/networks/docker-localnet/supervisord.conf
deleted file mode 100644
index 2de38b184..000000000
--- a/tests/networks/docker-localnet/supervisord.conf
+++ /dev/null
@@ -1,41 +0,0 @@
-[supervisord]
-logfile = /tmp/supervisord.log
-logfile_maxbytes = 50MB
-logfile_backups=10
-logLevel = error
-pidfile = /tmp/supervisord.pid
-nodaemon = true
-minfds = 1024
-minprocs = 200
-umask = 022
-user = cheqd
-identifier = supervisor
-directory = /tmp
-nocleanup = true
-childlogdir = /tmp
-strip_ansi = false
-
-
-[program:validator-0]
-command=cheqd-noded start --home "/home/cheqd/network-config/validator-0"
-directory=/home/cheqd
-stdout_logfile=/tmp/validator-0.log
-stderr_logfile=/tmp/validator-0.log
-
-[program:validator-1]
-command=cheqd-noded start --home "/home/cheqd/network-config/validator-1"
-directory=/home/cheqd
-stdout_logfile=/tmp/validator-1.log
-stderr_logfile=/tmp/validator-1.log
-
-[program:validator-0-log]
-command=tail -f /tmp/validator-0.log
-stdout_logfile=/dev/stdout
-stdout_logfile_maxbytes=0
-redirect_stderr=true
-
-[program:validator-1-log]
-command=tail -f /tmp/validator-1.log
-stdout_logfile=/dev/stdout
-stdout_logfile_maxbytes=0
-redirect_stderr=true
diff --git a/tests/networks/tools/wait-for-chain.sh b/tests/tools/wait-for-chain.sh
similarity index 100%
rename from tests/networks/tools/wait-for-chain.sh
rename to tests/tools/wait-for-chain.sh
diff --git a/tests/upgrade/.env b/tests/upgrade/.env
deleted file mode 100644
index b7a6ab404..000000000
--- a/tests/upgrade/.env
+++ /dev/null
@@ -1,2 +0,0 @@
-CHEQD_IMAGE_NAME="cheqd-cli"
-MOUNT_POINT="."
diff --git a/x/cheqd/keeper/verify.go b/x/cheqd/keeper/verify.go
index f90c3861f..0cf3535a2 100644
--- a/x/cheqd/keeper/verify.go
+++ b/x/cheqd/keeper/verify.go
@@ -86,7 +86,12 @@ func VerifyIdentitySignature(signer types.Signer, signatures []*types.SignInfo,
 				return false, err
 			}
 
-			result = result && ed25519.Verify(pubKey, signingInput, signature)
+			verRes, err := verifyNoPanic(pubKey, signingInput, signature)
+			if err != nil {
+				return false, fmt.Errorf("signature verification error. verification method: %s. error: %s", info.VerificationMethodId, err)
+			}
+
+			result = result && verRes
 			foundOne = true
 		}
 	}
@@ -97,3 +102,14 @@ func VerifyIdentitySignature(signer types.Signer, signatures []*types.SignInfo,
 
 	return result, nil
 }
+
+func verifyNoPanic(publicKey ed25519.PublicKey, message, sig []byte) (res bool, err error) {
+	defer func() {
+		if rec := recover(); rec != nil {
+			err = fmt.Errorf("%s", rec)
+		}
+	}()
+
+	internalRes := ed25519.Verify(publicKey, message, sig)
+	return internalRes, nil
+}