diff --git a/Makefile b/Makefile
index a97bde5c3a..b71c66dfb6 100644
--- a/Makefile
+++ b/Makefile
@@ -25,6 +25,10 @@ TEST_BUILD_FLAGS := -tags pebbledb,ledger
 HSM_BUILD_FLAGS := -tags pebbledb,ledger,hsm_test
 
 export DOCKER_BUILDKIT := 1
+# set defaults to empty to prevent docker warning
+export LOCALNET_MODE := ""
+export E2E_ARGS := ""
+export UPGRADE_HEIGHT := ""
 
 clean: clean-binaries clean-dir clean-test-dir clean-coverage
 
@@ -223,15 +227,17 @@ 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
@@ -242,17 +248,21 @@ zetanode-upgrade: zetanode
 
 start-upgrade-test: zetanode-upgrade
 	@echo "--> Starting upgrade test"
+	export LOCALNET_MODE=upgrade && \
 	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:
 	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-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..4f32b151ba 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
\ No newline at end of file
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..1febbbab59 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
diff --git a/contrib/localnet/docker-compose.yml b/contrib/localnet/docker-compose.yml
index f176c30f00..ceea25ba7f 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)
@@ -51,10 +49,11 @@ services:
     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
     volumes:
       - ssh:/root/.ssh
 
@@ -65,10 +64,11 @@ 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 +146,10 @@ 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 a297be595b..098eebd7ff 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=""
@@ -72,12 +69,12 @@ 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 "$ZETAE2E_CMD" --setup-only --config-out deployed.yml --skip-header-proof
@@ -94,7 +91,7 @@ if [ "$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 $E2E_ARGS --skip-setup --config deployed.yml --light --skip-header-proof
     if [ $? -ne 0 ]; then
       echo "first e2e failed"
       exit 1
@@ -136,9 +133,9 @@ if [ "$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=$?
@@ -156,7 +153,7 @@ 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
@@ -165,9 +162,13 @@ 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/start-zetaclientd.sh b/contrib/localnet/scripts/start-zetaclientd.sh
index 01667df450..c29649b25c 100755
--- a/contrib/localnet/scripts/start-zetaclientd.sh
+++ b/contrib/localnet/scripts/start-zetaclientd.sh
@@ -54,7 +54,7 @@ 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 $ADDITIONAL_EVM ]]; then
      set_sepolia_endpoint
     fi
 fi
@@ -73,7 +73,7 @@ then
   # check if the option is additional-evm
   # in this case, the additional evm is represented with the sepolia chain, we set manually the eth2 endpoint to the sepolia chain (11155111 -> http://eth2:8545)
   # in /root/.zetacored/config/zetaclient_config.json
-  if [ "$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 8e16ffbc4a..0512c420d2 100755
--- a/contrib/localnet/scripts/start-zetacored.sh
+++ b/contrib/localnet/scripts/start-zetacored.sh
@@ -65,13 +65,6 @@ 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=$1
-
 # create keys
 CHAINID="athens_101-1"
 KEYRING="test"
@@ -93,7 +86,7 @@ export UNSAFE_SKIP_BACKUP=true
 # generate node list
 START=1
 # shellcheck disable=SC2100
-END=$((NUMOFNODES - 1))
+END=$((ZETACORED_REPLICAS - 1))
 NODELIST=()
 for i in $(eval echo "{$START..$END}")
 do