diff --git a/.github/workflows/build.yml b/.github/workflows/build.yml
index 4fdd5c2149..fc58eb6c56 100644
--- a/.github/workflows/build.yml
+++ b/.github/workflows/build.yml
@@ -152,8 +152,7 @@ jobs:
       - name: Full Log Dump On Failure
         if: failure()
         run: |
-          cd contrib/localnet
-          docker compose logs
+          make stop-localnet
 
       - name: Notify Slack on Failure
         if: failure() && github.event_name == 'push' && github.ref == 'refs/heads/develop'
@@ -167,8 +166,7 @@ jobs:
       - name: Stop Private Network
         if: always()
         run: |
-          cd contrib/localnet/
-          docker compose down
+          make stop-localnet
 
       - name: Clean Up Workspace
         if: always()
diff --git a/.github/workflows/execute_advanced_tests.yaml b/.github/workflows/execute_advanced_tests.yaml
index e42d08e9d6..0af6d13a48 100644
--- a/.github/workflows/execute_advanced_tests.yaml
+++ b/.github/workflows/execute_advanced_tests.yaml
@@ -50,8 +50,7 @@ jobs:
       - name: Full Log Dump On Failure
         if: failure()
         run: |
-          cd contrib/localnet
-          docker compose logs
+          make stop-localnet
 
       - name: Notify Slack on Failure
         if: failure() && github.event_name == 'schedule'
@@ -82,8 +81,7 @@ jobs:
       - name: Full Log Dump On Failure
         if: failure()
         run: |
-          cd contrib/localnet
-          docker compose logs
+          make stop-localnet
 
       - name: Notify Slack on Failure
         if: failure() && github.event_name == 'schedule'
@@ -114,8 +112,7 @@ jobs:
       - name: Full Log Dump On Failure
         if: failure()
         run: |
-          cd contrib/localnet
-          docker compose logs
+          make stop-localnet
 
   e2e-performance-test:
     if: ${{ github.event.inputs.e2e-performance-test == 'true' }}
@@ -137,5 +134,4 @@ jobs:
       - name: Full Log Dump On Failure
         if: failure()
         run: |
-          cd contrib/localnet
-          docker compose logs
\ No newline at end of file
+          make stop-localnet
diff --git a/.github/workflows/publish-release.yml b/.github/workflows/publish-release.yml
index e96bb39e46..89a4b1f688 100644
--- a/.github/workflows/publish-release.yml
+++ b/.github/workflows/publish-release.yml
@@ -339,8 +339,7 @@ jobs:
       - name: Stop Private Network
         if: ${{ always() && github.event.inputs.skip_checks != 'true' }}
         run: |
-          cd contrib/localnet/
-          docker compose down
+          make stop-localnet
 
       - name: Clean Up Workspace
         if: always()
diff --git a/Makefile b/Makefile
index 360e071485..75834d690d 100644
--- a/Makefile
+++ b/Makefile
@@ -26,6 +26,14 @@ HSM_BUILD_FLAGS := -tags pebbledb,ledger,hsm_test
 
 export DOCKER_BUILDKIT := 1
 
+# parameters for localnet docker compose files
+# set defaults to empty to prevent docker warning
+export LOCALNET_MODE
+export E2E_ARGS := $(E2E_ARGS)
+export UPGRADE_HEIGHT
+export ZETACORED_IMPORT_GENESIS_DATA
+export ZETACORED_START_PERIOD := 30s
+
 clean: clean-binaries clean-dir clean-test-dir clean-coverage
 
 clean-binaries:
@@ -217,15 +225,17 @@ start-e2e-test: zetanode
 
 start-e2e-admin-test: zetanode
 	@echo "--> Starting e2e admin test"
-	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-admin.yml up -d
+	export E2E_ARGS="--skip-regular --test-admin" && \
+	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-additionalevm.yml up -d
 
 start-e2e-performance-test: zetanode
 	@echo "--> Starting e2e performance test"
-	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-performance.yml up -d
+	export E2E_ARGS="--test-performance" && \
+	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml up -d
 
 start-stress-test: zetanode
 	@echo "--> Starting stress test"
-	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-stresstest.yml up -d
+	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-stress.yml up -d
 
 #TODO: replace OLD_VERSION with v16 tag once its available
 zetanode-upgrade: zetanode
@@ -236,24 +246,30 @@ zetanode-upgrade: zetanode
 
 start-upgrade-test: zetanode-upgrade
 	@echo "--> Starting upgrade test"
+	export LOCALNET_MODE=upgrade && \
+	export UPGRADE_HEIGHT=225 && \
 	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-upgrade.yml up -d
 
 start-upgrade-test-light: zetanode-upgrade
 	@echo "--> Starting light upgrade test (no ZetaChain state populating before upgrade)"
-	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-upgrade.yml -f docker-compose-upgrade-light.yml up -d
+	export LOCALNET_MODE=upgrade && \
+	export UPGRADE_HEIGHT=90 && \
+	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-upgrade.yml up -d
 
 start-localnet: zetanode start-localnet-skip-build
 
 start-localnet-skip-build:
 	@echo "--> Starting localnet"
-	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml -f docker-compose-setup-only.yml up -d
+	export LOCALNET_MODE=setup-only && \
+	cd contrib/localnet/ && $(DOCKER) compose -f docker-compose.yml up -d
 
-stop-localnet:
 start-e2e-import-mainnet-test: zetanode
 	@echo "--> Starting e2e import-data test"
-	cd contrib/localnet/ && ./scripts/import-data.sh mainnet && $(DOCKER) compose -f docker-compose.yml -f docker-compose-import-data.yml up -d
+	export ZETACORED_IMPORT_GENESIS_DATA=true && \
+	export ZETACORED_START_PERIOD=10m && \
+	cd contrib/localnet/ && ./scripts/import-data.sh mainnet && $(DOCKER) compose -f docker-compose.yml up -d
 
-stop-test:
+stop-localnet:
 	cd contrib/localnet/ && $(DOCKER) compose down --remove-orphans
 
 ###############################################################################
diff --git a/contrib/localnet/docker-compose-admin.yml b/contrib/localnet/docker-compose-additionalevm.yml
similarity index 66%
rename from contrib/localnet/docker-compose-admin.yml
rename to contrib/localnet/docker-compose-additionalevm.yml
index 19a478100e..208a8e30e9 100644
--- a/contrib/localnet/docker-compose-admin.yml
+++ b/contrib/localnet/docker-compose-additionalevm.yml
@@ -1,13 +1,8 @@
-version: "3"
-
 # This docker-compose file overrides the orchestrator service to specify the flag to test the admin functions
 # and skip the regular tests
 # it also adds another local Ethereum network to test EVM chain migration and use the additional-evm flag
 
 services:
-  orchestrator:
-    entrypoint: ["/work/start-zetae2e.sh", "local --skip-regular --test-admin"]
-
   eth2:
     build:
       context: ./anvil
@@ -21,7 +16,9 @@ services:
         ipv4_address: 172.20.0.102
 
   zetaclient0:
-    entrypoint: [ "/root/start-zetaclientd.sh", "additional-evm" ]
+    environment:
+      - ADDITIONAL_EVM=true
 
   zetaclient1:
-    entrypoint: [ "/root/start-zetaclientd.sh", "additional-evm" ]
+    environment:
+      - ADDITIONAL_EVM=true
diff --git a/contrib/localnet/docker-compose-import-data.yml b/contrib/localnet/docker-compose-import-data.yml
deleted file mode 100644
index 19f4068ad5..0000000000
--- a/contrib/localnet/docker-compose-import-data.yml
+++ /dev/null
@@ -1,30 +0,0 @@
-version: "3"
-
-# This docker-compose file configures the localnet environment
-# it contains the following services:
-# - ZetaChain with 2 nodes (zetacore0, zetacore1)
-# - A observer set with 2 clients (zetaclient0, zetaclient1)
-# - An Ethereum node (eth)
-# - A Bitcoin node (bitcoin)
-# - A Rosetta API (rosetta)
-# - An orchestrator to manage interaction with the localnet (orchestrator)
-services:
-  rosetta:
-    entrypoint: ["/root/start-rosetta.sh"]
-
-  zetacore0:
-    entrypoint: ["/root/start-zetacored.sh", "2","import-data"]
-    volumes:
-      - ~/genesis_export/:/root/genesis_data
-
-  zetacore1:
-    entrypoint: ["/root/start-zetacored.sh", "2","import-data"]
-
-  zetaclient0:
-    entrypoint: ["/root/start-zetaclientd.sh"]
-
-  zetaclient1:
-    entrypoint: ["/root/start-zetaclientd.sh"]
-
-  orchestrator:
-    entrypoint: ["/work/start-zetae2e.sh", "local"]
\ No newline at end of file
diff --git a/contrib/localnet/docker-compose-monitoring.yml b/contrib/localnet/docker-compose-monitoring.yml
index ad66f828ec..9f11bd5575 100644
--- a/contrib/localnet/docker-compose-monitoring.yml
+++ b/contrib/localnet/docker-compose-monitoring.yml
@@ -1,5 +1,3 @@
-version: '3'
-
 services:
   grafana:
     image: grafana/grafana:latest
diff --git a/contrib/localnet/docker-compose-performance.yml b/contrib/localnet/docker-compose-performance.yml
deleted file mode 100644
index 0374d42030..0000000000
--- a/contrib/localnet/docker-compose-performance.yml
+++ /dev/null
@@ -1,9 +0,0 @@
-version: "3"
-
-# This docker-compose file overrides the orchestrator service to specify the flag to test performance of cctxs
-# and skip the regular tests
-
-services:
-  orchestrator:
-    entrypoint: ["/work/start-zetae2e.sh", "local --test-performance"]
-
diff --git a/contrib/localnet/docker-compose-setup-only.yml b/contrib/localnet/docker-compose-setup-only.yml
deleted file mode 100644
index 11761ad817..0000000000
--- a/contrib/localnet/docker-compose-setup-only.yml
+++ /dev/null
@@ -1,9 +0,0 @@
-version: "3"
-
-# This docker-compose file overrides the orcherstrator service to use the setup only option
-# It is used to setup the localnet environment without running tests
-
-services:
-  orchestrator:
-    entrypoint: ["/work/start-zetae2e.sh", "local --setup-only"]
-
diff --git a/contrib/localnet/docker-compose-stresstest.yml b/contrib/localnet/docker-compose-stress.yml
similarity index 70%
rename from contrib/localnet/docker-compose-stresstest.yml
rename to contrib/localnet/docker-compose-stress.yml
index 38df1133f3..fb11f01b5c 100644
--- a/contrib/localnet/docker-compose-stresstest.yml
+++ b/contrib/localnet/docker-compose-stress.yml
@@ -1,23 +1,19 @@
-version: "3"
-
 # This docker-compose redefine the services:
 # - ZetaChain with 4 nodes to test performance
 # - ZetaChain observer set with 4 clients to test performance
-# - Orchestrator call stress commands
 
 services:
   zetacore0:
-    entrypoint: ["/root/start-zetacored.sh", "4"]
+    environment:
+      - ZETACORED_REPLICAS=4
 
   zetacore1:
-    entrypoint: ["/root/start-zetacored.sh", "4"]
+    environment:
+      - ZETACORED_REPLICAS=4
 
   zetacore2:
     image: zetanode:latest
     container_name: zetacore2
-    build:
-      context: ../../.
-      dockerfile: Dockerfile-localnet
     hostname: zetacore2
     networks:
       mynetwork:
@@ -26,6 +22,7 @@ services:
     environment:
       - HOTKEY_BACKEND=file
       - HOTKEY_PASSWORD=password # test purposes only
+      - ZETACORED_REPLICAS=4
 
   zetacore3:
     image: zetanode:latest
@@ -41,21 +38,11 @@ services:
     environment:
       - HOTKEY_BACKEND=file
       - HOTKEY_PASSWORD=password # test purposes only
-
-  zetaclient0:
-    ports:
-      - "8123:8123"
-    entrypoint: /root/start-zetaclientd.sh
-
-  zetaclient1:
-    entrypoint: /root/start-zetaclientd.sh
+      - ZETACORED_REPLICAS=4
 
   zetaclient2:
     image: zetanode:latest
     container_name: zetaclient2
-    build:
-      context: ../../.
-      dockerfile: Dockerfile-localnet
     hostname: zetaclient2
     networks:
       mynetwork:
@@ -65,13 +52,13 @@ services:
       - ETHDEV_ENDPOINT=http://eth:8545
       - HOTKEY_BACKEND=file
       - HOTKEY_PASSWORD=password # test purposes only
+    volumes:
+      - ssh:/root/.ssh
+      - preparams:/root/preparams
 
   zetaclient3:
     image: zetanode:latest
     container_name: zetaclient3
-    build:
-      context: ../../.
-      dockerfile: Dockerfile-localnet
     hostname: zetaclient3
     networks:
       mynetwork:
@@ -81,8 +68,6 @@ services:
       - ETHDEV_ENDPOINT=http://eth:8545
       - HOTKEY_BACKEND=file
       - HOTKEY_PASSWORD=password # test purposes only
-
-  orchestrator:
-    build:
-      dockerfile: contrib/localnet/orchestrator/Dockerfile.fastbuild
-    entrypoint: ["/work/start-zetae2e.sh", "stress"]
\ No newline at end of file
+    volumes:
+      - ssh:/root/.ssh
+      - preparams:/root/preparams
diff --git a/contrib/localnet/docker-compose-upgrade-light.yml b/contrib/localnet/docker-compose-upgrade-light.yml
deleted file mode 100644
index 8e3cb098c1..0000000000
--- a/contrib/localnet/docker-compose-upgrade-light.yml
+++ /dev/null
@@ -1,11 +0,0 @@
-version: "3"
-
-# This docker-compose is similar to the docker-compose-upgrade.yml, but it uses a smaller height option for the upgrade (90)
-# By using 90, the orchestrator will automatically run setup only for the first e2e test execution.
-
-services:
-  orchestrator:
-    entrypoint: ["/work/start-zetae2e.sh", "local", "upgrade", "90"]
-
-  upgrade-orchestrator:
-    entrypoint: ["/root/start-upgrade-orchestrator.sh", "90"]
\ No newline at end of file
diff --git a/contrib/localnet/docker-compose-upgrade.yml b/contrib/localnet/docker-compose-upgrade.yml
index a7497db980..c6ae72941a 100644
--- a/contrib/localnet/docker-compose-upgrade.yml
+++ b/contrib/localnet/docker-compose-upgrade.yml
@@ -1,5 +1,3 @@
-version: "3"
-
 # This docker-compose redefine the services:
 # - ZetaChain with 2 nodes (zetacore0, zetacore1) using the upgrade option for cosmovisor
 # - ZetaChain observer set with 2 clients (zetaclient0, zetaclient1) using the background option
@@ -13,17 +11,11 @@ services:
     image: zetanode:old
 
   zetaclient0:
-    entrypoint: ["/root/start-zetaclientd.sh"]
     image: zetanode:old
 
   zetaclient1:
-    entrypoint: ["/root/start-zetaclientd.sh"]
     image: zetanode:old
 
-  orchestrator:
-    entrypoint: ["/work/start-zetae2e.sh", "local", "upgrade"]
-    image: orchestrator
-
   upgrade-host:
     image: zetanode:latest
     container_name: upgrade-host
@@ -40,12 +32,14 @@ services:
     image: zetanode:old
     container_name: upgrade-orchestrator
     hostname: upgrade-orchestrator
-    entrypoint: ["/root/start-upgrade-orchestrator.sh", "225"]
+    entrypoint: ["/root/start-upgrade-orchestrator.sh"]
     networks:
       mynetwork:
         ipv4_address: 172.20.0.251
     depends_on:
       - zetacore0
       - upgrade-host
+    environment:
+      - UPGRADE_HEIGHT=${UPGRADE_HEIGHT}
     volumes:
-      - ssh:/root/.ssh
\ No newline at end of file
+      - ssh:/root/.ssh
diff --git a/contrib/localnet/docker-compose.yml b/contrib/localnet/docker-compose.yml
index f176c30f00..1a59202d0d 100644
--- a/contrib/localnet/docker-compose.yml
+++ b/contrib/localnet/docker-compose.yml
@@ -1,5 +1,3 @@
-version: "3"
-
 # This docker-compose file configures the localnet environment
 # it contains the following services:
 # - ZetaChain with 2 nodes (zetacore0, zetacore1)
@@ -46,17 +44,20 @@ services:
       interval: 30s
       timeout: 10s
       retries: 3
-      start_period: 30s
+      start_period: ${ZETACORED_START_PERIOD}
       start_interval: 1s
     networks:
       mynetwork:
         ipv4_address: 172.20.0.11
-    entrypoint: ["/root/start-zetacored.sh", "2"]
+    entrypoint: ["/root/start-zetacored.sh"]
     environment:
       - HOTKEY_BACKEND=file
       - HOTKEY_PASSWORD=password # test purposes only
+      - ZETACORED_REPLICAS=2
+      - ZETACORED_IMPORT_GENESIS_DATA=${ZETACORED_IMPORT_GENESIS_DATA}
     volumes:
       - ssh:/root/.ssh
+      - ~/.zetacored/genesis_data:/root/genesis_data
 
   zetacore1:
     image: zetanode:latest
@@ -65,10 +66,11 @@ services:
     networks:
       mynetwork:
         ipv4_address: 172.20.0.12
-    entrypoint: ["/root/start-zetacored.sh", "2"]
+    entrypoint: ["/root/start-zetacored.sh"]
     environment:
       - HOTKEY_BACKEND=file
       - HOTKEY_PASSWORD=password # test purposes only
+      - ZETACORED_REPLICAS=2
     volumes:
       - ssh:/root/.ssh
 
@@ -146,6 +148,10 @@ services:
       mynetwork:
         ipv4_address: 172.20.0.2
     entrypoint: ["/work/start-zetae2e.sh", "local"]
+    environment:
+      - LOCALNET_MODE=${LOCALNET_MODE}
+      - E2E_ARGS=${E2E_ARGS}
+      - UPGRADE_HEIGHT=${UPGRADE_HEIGHT}
     volumes:
       - ssh:/root/.ssh
 volumes:
diff --git a/contrib/localnet/orchestrator/start-zetae2e.sh b/contrib/localnet/orchestrator/start-zetae2e.sh
index 8dcb4ea271..791f0a6074 100644
--- a/contrib/localnet/orchestrator/start-zetae2e.sh
+++ b/contrib/localnet/orchestrator/start-zetae2e.sh
@@ -5,9 +5,6 @@
 # A second optional argument can be passed and can have the following value:
 # upgrade: run the local e2e once, then restart zetaclientd at upgrade height and run the local e2e again
 
-ZETAE2E_CMD=$1
-OPTION=$2
-
 get_zetacored_version() {
   retries=10
   node_info=""
@@ -78,15 +75,15 @@ geth --exec 'eth.sendTransaction({from: eth.coinbase, to: "0xF421292cb0d3c97b90E
 
 ### Run zetae2e command depending on the option passed
 
-if [ "$OPTION" == "upgrade" ]; then
+if [ "$LOCALNET_MODE" == "upgrade" ]; then
 
   # Run the e2e tests, then restart zetaclientd at upgrade height and run the e2e tests again
 
-  # Fetch the height of the upgrade, default is 225, if arg3 is passed, use that value
-  UPGRADE_HEIGHT=${3:-225}
+  # set upgrade height to 225 by default
+  UPGRADE_HEIGHT=${UPGRADE_HEIGHT:=225}
 
   if [[ ! -f deployed.yml ]]; then
-    zetae2e "$ZETAE2E_CMD" --setup-only --config-out deployed.yml --skip-header-proof
+    zetae2e local $E2E_ARGS --setup-only --config-out deployed.yml --skip-header-proof
     if [ $? -ne 0 ]; then
       echo "e2e setup failed"
       exit 1
@@ -100,7 +97,7 @@ if [ "$OPTION" == "upgrade" ]; then
     echo "running E2E command to setup the networks and populate the state..."
 
     # Use light flag to ensure tests can complete before the upgrade height
-    zetae2e "$ZETAE2E_CMD" --skip-setup --config deployed.yml --light --skip-header-proof
+    zetae2e local $E2E_ARGS --skip-setup --config deployed.yml --light --skip-header-proof
     if [ $? -ne 0 ]; then
       echo "first e2e failed"
       exit 1
@@ -142,9 +139,9 @@ if [ "$OPTION" == "upgrade" ]; then
   # When the upgrade height is greater than 100 for upgrade test, the Bitcoin tests have been run once, therefore the Bitcoin wallet is already set up
   # Use light flag to skip advanced tests
   if [ "$UPGRADE_HEIGHT" -lt 100 ]; then
-    zetae2e $ZETAE2E_CMD --skip-setup --config deployed.yml --light --skip-header-proof
+    zetae2e local $E2E_ARGS --skip-setup --config deployed.yml --light --skip-header-proof
   else
-    zetae2e $ZETAE2E_CMD --skip-setup --config deployed.yml --skip-bitcoin-setup --light --skip-header-proof
+    zetae2e local $E2E_ARGS --skip-setup --config deployed.yml --skip-bitcoin-setup --light --skip-header-proof
   fi
 
   ZETAE2E_EXIT_CODE=$?
@@ -162,7 +159,7 @@ else
   echo "running e2e setup..."
 
   if [[ ! -f deployed.yml ]]; then
-    zetae2e $ZETAE2E_CMD --setup-only --config-out deployed.yml
+    zetae2e local $E2E_ARGS --setup-only --config-out deployed.yml
     if [ $? -ne 0 ]; then
       echo "e2e setup failed"
       exit 1
@@ -171,9 +168,13 @@ else
     echo "skipping e2e setup because it has already been completed"
   fi
 
+  if [ "$LOCALNET_MODE" == "setup-only" ]; then
+    exit 0
+  fi
+
   echo "running e2e tests..."
 
-  zetae2e $ZETAE2E_CMD --skip-setup --config deployed.yml
+  zetae2e local $E2E_ARGS --skip-setup --config deployed.yml
   ZETAE2E_EXIT_CODE=$?
 
   # if e2e passed, exit with 0, otherwise exit with 1
diff --git a/contrib/localnet/scripts/import-data.sh b/contrib/localnet/scripts/import-data.sh
index d71d5c3656..5236bfe166 100644
--- a/contrib/localnet/scripts/import-data.sh
+++ b/contrib/localnet/scripts/import-data.sh
@@ -7,9 +7,9 @@ fi
 
 NETWORK=$1
 echo "NETWORK: ${NETWORK}"
-rm -rf ~/genesis_export/
-mkdir ~/genesis_export/
+rm -rf ~/.zetacored/genesis_data
+mkdir ~/.zetacored/genesis_data
 echo "Download Latest State Export"
 LATEST_EXPORT_URL=$(curl https://snapshots.zetachain.com/latest-state-export | jq -r ."${NETWORK}")
 echo "LATEST EXPORT URL: ${LATEST_EXPORT_URL}"
-wget -q ${LATEST_EXPORT_URL} -O ~/genesis_export/exported-genesis.json
\ No newline at end of file
+wget -q ${LATEST_EXPORT_URL} -O ~/.zetacored/genesis_data/exported-genesis.json
diff --git a/contrib/localnet/scripts/start-upgrade-orchestrator.sh b/contrib/localnet/scripts/start-upgrade-orchestrator.sh
index a2e8ec68fd..f68009db9a 100755
--- a/contrib/localnet/scripts/start-upgrade-orchestrator.sh
+++ b/contrib/localnet/scripts/start-upgrade-orchestrator.sh
@@ -1,7 +1,5 @@
 #!/bin/bash
 
-UPGRADE_HEIGHT=$1
-
 CHAINID="athens_101-1"
 UPGRADE_AUTHORITY_ACCOUNT="zeta10d07y265gmmuvt4z0w9aw880jnsr700jvxasvr"
 
diff --git a/contrib/localnet/scripts/start-zetaclientd.sh b/contrib/localnet/scripts/start-zetaclientd.sh
index 1b018de4ef..a849891275 100755
--- a/contrib/localnet/scripts/start-zetaclientd.sh
+++ b/contrib/localnet/scripts/start-zetaclientd.sh
@@ -63,7 +63,7 @@ then
     # check if the option is additional-evm
     # in this case, the additional evm is represented with the sepolia chain, we set manually the eth2 endpoint to the sepolia chain (11155111 -> http://eth2:8545)
     # in /root/.zetacored/config/zetaclient_config.json
-    if [ "$OPTION" == "additional-evm" ]; then
+    if [[ -n $ADDITIONAL_EVM ]]; then
      set_sepolia_endpoint
     fi
 fi
@@ -82,7 +82,7 @@ then
   # check if the option is additional-evm
   # in this case, the additional evm is represented with the sepolia chain, we set manually the eth2 endpoint to the sepolia chain (11155111 -> http://eth2:8545)
   # in /root/.zetacored/config/zetaclient_config.json
-  if [ "$OPTION" == "additional-evm" ]; then
+  if [[ -n $ADDITIONAL_EVM ]]; then
    set_sepolia_endpoint
   fi
 fi
diff --git a/contrib/localnet/scripts/start-zetacored.sh b/contrib/localnet/scripts/start-zetacored.sh
index d390b99083..dd8509847f 100755
--- a/contrib/localnet/scripts/start-zetacored.sh
+++ b/contrib/localnet/scripts/start-zetacored.sh
@@ -67,14 +67,6 @@ add_v17_message_authorizations() {
     ' $json_file > temp.json && mv temp.json $json_file
 }
 
-if [ $# -lt 1 ]
-then
-  echo "Usage: genesis.sh <num of nodes> [option]"
-  exit 1
-fi
-NUMOFNODES=$1
-OPTION=$2
-
 # create keys
 CHAINID="athens_101-1"
 KEYRING="test"
@@ -96,7 +88,7 @@ export UNSAFE_SKIP_BACKUP=true
 # generate node list
 START=1
 # shellcheck disable=SC2100
-END=$((NUMOFNODES - 1))
+END=$((ZETACORED_REPLICAS - 1))
 NODELIST=()
 for i in $(eval echo "{$START..$END}")
 do
@@ -257,7 +249,7 @@ then
       scp $NODE:~/.zetacored/config/gentx/* ~/.zetacored/config/gentx/z2gentx/
   done
 
-  if [[ "$OPTION" == "import-data" || "$OPTION" == "import-data-upgrade" ]]; then
+  if [[ -n "$ZETACORED_IMPORT_GENESIS_DATA" ]]; then
     echo "Importing data"
     zetacored parse-genesis-file /root/genesis_data/exported-genesis.json
   fi
diff --git a/docs/development/LOCAL_TESTING.md b/docs/development/LOCAL_TESTING.md
index d28c44638e..3472daca89 100644
--- a/docs/development/LOCAL_TESTING.md
+++ b/docs/development/LOCAL_TESTING.md
@@ -27,6 +27,17 @@ Now we have built all the docker images, we can run the e2e test with make comma
 make start-e2e-test
 ```
 
+This uses `docker compose` to start the localnet and run standard e2e tests inside the orchestrator container. There are several parameters that the `Makefile` can provide to `docker compose` via environment variables:
+
+- `LOCALNET_MODE`
+	- `setup-only`: only setup the localnet, do not run the e2e tests
+	- `upgrade`: run the upgrade tests
+	- unset: run the e2e tests
+- `E2E_ARGS`: arguments to provide to the `zetae2e local` command
+- `UPGRADE_HEIGHT`: block height to upgrade at when `LOCALNET_MODE=upgrade`
+- `ZETACORED_IMPORT_GENESIS_DATA`: path to genesis data to import before starting zetacored
+- `ZETACORED_START_PERIOD`: duration to tolerate `zetacored` health check failures during startup
+
 #### Run admin functions e2e tests
 
 We define e2e tests allowing to test admin functionalities (emergency network pause for example).
@@ -42,13 +53,7 @@ make start-e2e-admin-test
 Upgrade tests run the E2E tests with an older version, upgrade the nodes to the new version, and run the E2E tests again.
 This allows testing the upgrade process with a populated state.
 
-Before running the upgrade tests, the versions must be specified in `Dockefile-upgrade`:
-
-```dockerfile
-ARG OLD_VERSION=v{old_major_version}.{old_minor_version}.{old_patch_version}
-ENV NEW_VERSION=v{new_major_version}
-```
-The new version must match the version specified in `app/setup_handlers.go`
+Before running the upgrade tests, the old version must be specified the Makefile.
 
 NOTE: We only specify the major version for `NEW_VERSION` since we use major version only for chain upgrade. Semver is needed for `OLD_VERSION` because we use this value to fetch the release tag from the GitHub repository.