diff --git a/.dockerignore b/.dockerignore
new file mode 100644
index 00000000..dacc6297
--- /dev/null
+++ b/.dockerignore
@@ -0,0 +1,5 @@
+# localnet-setup
+localnet-setup
+
+# build
+build
\ No newline at end of file
diff --git a/.gitignore b/.gitignore
index c9d37799..0949de2f 100644
--- a/.gitignore
+++ b/.gitignore
@@ -36,6 +36,9 @@ keyring_test_cosmos
 secret.yml
 # vue/
 
+# Local docker volume mappings
+localnet-setup
+
 # Testing
 coverage.txt
 *.out
diff --git a/Dockerfile b/Dockerfile
index 3ef5f575..543769c8 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -21,7 +21,7 @@ FROM alpine
 
 # Install ca-certificates
 RUN apk add --update ca-certificates jq
-WORKDIR /root
+WORKDIR /
 
 # Copy over binaries from the build-env
 COPY --from=build-env /go/src/github.com/tharsis/ethermint/build/ethermintd /usr/bin/ethermintd
diff --git a/Makefile b/Makefile
index 539592e8..d44d9393 100755
--- a/Makefile
+++ b/Makefile
@@ -131,9 +131,6 @@ docker-build:
 	mkdir -p ./build/
 	docker cp ethermint:/usr/bin/ethermintd ./build/
 
-docker-localnet:
-	docker build -f ./networks/local/ethermintnode/Dockerfile . -t ethermintd/node
-
 $(MOCKS_DIR):
 	mkdir -p $(MOCKS_DIR)
 
@@ -477,49 +474,54 @@ proto-update-deps:
 ###                                Localnet                                 ###
 ###############################################################################
 
-# Run a 4-node testnet locally
-build-docker-local-ethermint:
+# Build image for a local testnet
+localnet-build:
 	@$(MAKE) -C networks/local
 
-# Run a 4-node testnet locally
+# Start a 4-node testnet locally
 localnet-start: localnet-stop
 ifeq ($(OS),Windows_NT)
-	mkdir build &
-	@$(MAKE) docker-localnet
+	mkdir localnet-setup &
+	@$(MAKE) localnet-build
 
-	IF not exist "build/node0/$(ETHERMINT_BINARY)/config/genesis.json" docker run --rm -v $(CURDIR)/build\ethermint\Z ethermintd/node "ethermintd testnet --v 4 -o /ethermint --keyring-backend=test"
+	IF not exist "build/node0/$(ETHERMINT_BINARY)/config/genesis.json" docker run --rm -v $(CURDIR)/build\ethermint\Z ethermintd/node "./ethermintd testnet --v 4 -o /ethermint --keyring-backend=test --ip-addresses ethermintdnode0,ethermintdnode1,ethermintdnode2,ethermintdnode3"
 	docker-compose up -d
 else
-	mkdir -p ./build/
-	@$(MAKE) docker-localnet
+	mkdir -p localnet-setup
+	@$(MAKE) localnet-build
 
-	if ! [ -f build/node0/$(ETHERMINT_BINARY)/config/genesis.json ]; then docker run --rm -v $(CURDIR)/build:/ethermint:Z ethermintd/node "ethermintd testnet --v 4 -o /ethermint --keyring-backend=test"; fi
+	if ! [ -f localnet-setup/node0/$(ETHERMINT_BINARY)/config/genesis.json ]; then docker run --rm -v $(CURDIR)/localnet-setup:/ethermint:Z ethermintd/node "./ethermintd testnet --v 4 -o /ethermint --keyring-backend=test --ip-addresses ethermintdnode0,ethermintdnode1,ethermintdnode2,ethermintdnode3"; fi
 	docker-compose up -d
 endif
 
+# Stop testnet
 localnet-stop:
 	docker-compose down
 
-# clean testnet
+# Clean testnet
 localnet-clean:
 	docker-compose down
-	sudo rm -rf build/*
+	sudo rm -rf localnet-setup
 
- # reset testnet
+ # Reset testnet
 localnet-unsafe-reset:
 	docker-compose down
 ifeq ($(OS),Windows_NT)
-	@docker run --rm -v $(CURDIR)/build\ethermint\Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node0/ethermintd"
-	@docker run --rm -v $(CURDIR)/build\ethermint\Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node1/ethermintd"
-	@docker run --rm -v $(CURDIR)/build\ethermint\Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node2/ethermintd"
-	@docker run --rm -v $(CURDIR)/build\ethermint\Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node3/ethermintd"
+	@docker run --rm -v $(CURDIR)\localnet-setup\node0\ethermitd:ethermint\Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
+	@docker run --rm -v $(CURDIR)\localnet-setup\node1\ethermitd:ethermint\Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
+	@docker run --rm -v $(CURDIR)\localnet-setup\node2\ethermitd:ethermint\Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
+	@docker run --rm -v $(CURDIR)\localnet-setup\node3\ethermitd:ethermint\Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
 else
-	@docker run --rm -v $(CURDIR)/build:/ethermint:Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node0/ethermintd"
-	@docker run --rm -v $(CURDIR)/build:/ethermint:Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node1/ethermintd"
-	@docker run --rm -v $(CURDIR)/build:/ethermint:Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node2/ethermintd"
-	@docker run --rm -v $(CURDIR)/build:/ethermint:Z ethermintd/node "ethermintd unsafe-reset-all --home=/ethermint/node3/ethermintd"
+	@docker run --rm -v $(CURDIR)/localnet-setup/node0/ethermitd:/ethermint:Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
+	@docker run --rm -v $(CURDIR)/localnet-setup/node1/ethermitd:/ethermint:Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
+	@docker run --rm -v $(CURDIR)/localnet-setup/node2/ethermitd:/ethermint:Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
+	@docker run --rm -v $(CURDIR)/localnet-setup/node3/ethermitd:/ethermint:Z ethermintd/node "./ethermintd unsafe-reset-all --home=/ethermint"
 endif
 
+# Clean testnet
+localnet-show-logstream:
+	docker-compose logs --tail=1000 -f
+
 .PHONY: build-docker-local-ethermint localnet-start localnet-stop
 
 # release
diff --git a/docker-compose.yml b/docker-compose.yml
index 8622de39..81968f56 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -13,10 +13,9 @@ services:
       - ID=0
       - LOG=${LOG:-ethermintd.log}
     volumes:
-      - ./build:/ethermint:Z
+      - ./localnet-setup/node0/ethermintd:/ethermint:Z
     networks:
-      localnet:
-        ipv4_address: 192.168.10.2
+      - localnet
     entrypoint: "bash start-docker.sh"
 
   ethermintdnode1:
@@ -31,10 +30,9 @@ services:
       - ID=1
       - LOG=${LOG:-ethermintd.log}
     volumes:
-      - ./build:/ethermint:Z
+      - ./localnet-setup/node1/ethermintd:/ethermint:Z
     networks:
-      localnet:
-        ipv4_address: 192.168.10.3
+      - localnet
     entrypoint: "bash start-docker.sh"
 
   ethermintdnode2:
@@ -49,10 +47,9 @@ services:
       - "8566:8546"
       - "8127:8125"
     volumes:
-      - ./build:/ethermint:Z
+      - ./localnet-setup/node2/ethermintd:/ethermint:Z
     networks:
-      localnet:
-        ipv4_address: 192.168.10.4
+      - localnet
     entrypoint: "bash start-docker.sh"
 
   ethermintdnode3:
@@ -67,16 +64,10 @@ services:
       - "8576:8546"
       - "8128:8125"
     volumes:
-      - ./build:/ethermint:Z
+      - ./localnet-setup/node3/ethermintd:/ethermint:Z
     networks:
-      localnet:
-        ipv4_address: 192.168.10.5
+      - localnet
     entrypoint: "bash start-docker.sh"
 
 networks:
   localnet:
-    driver: bridge
-    ipam:
-      driver: default
-      config:
-        - subnet: 192.168.10.0/16
diff --git a/networks/local/Makefile b/networks/local/Makefile
index 0b117de9..1ddf1fdc 100644
--- a/networks/local/Makefile
+++ b/networks/local/Makefile
@@ -1,4 +1,4 @@
 all:
-	docker build --tag ethermintd/node ethermintnode
+	docker build --no-cache --tag ethermintd/node ../.. -f ethermintnode/Dockerfile
 
 .PHONY: all
diff --git a/networks/local/ethermintnode/Dockerfile b/networks/local/ethermintnode/Dockerfile
index ced16b97..69d9d89b 100644
--- a/networks/local/ethermintnode/Dockerfile
+++ b/networks/local/ethermintnode/Dockerfile
@@ -12,7 +12,7 @@ WORKDIR /go/src/github.com/tharsis/ethermint
 COPY . .
 
 # build Ethermint
-RUN make build-ethermint-linux
+RUN make build-linux
 
 # Final image
 FROM golang:1.14 as final
diff --git a/scripts/start-docker.sh b/scripts/start-docker.sh
index d66d4feb..6ffa7484 100755
--- a/scripts/start-docker.sh
+++ b/scripts/start-docker.sh
@@ -1,29 +1,12 @@
 #!/bin/bash
 
-KEY="mykey"
-CHAINID="ethermint-123"
-MONIKER="mymoniker"
-DATA_DIR=$(mktemp -d -t ethermint-datadir.XXXXX)
-
-echo "create and add new keys"
-./ethermintd keys add $KEY --home $DATA_DIR --no-backup --chain-id $CHAINID --algo "eth_secp256k1" --keyring-backend test
-echo "init Ethermint with moniker=$MONIKER and chain-id=$CHAINID"
-./ethermintd init $MONIKER --chain-id $CHAINID --home $DATA_DIR
-echo "prepare genesis: Allocate genesis accounts"
-./ethermintd add-genesis-account \
-"$(./ethermintd keys show $KEY -a --home $DATA_DIR --keyring-backend test)" 1000000000000000000aphoton,1000000000000000000stake \
---home $DATA_DIR --keyring-backend test
-echo "prepare genesis: Sign genesis transaction"
-./ethermintd gentx $KEY 1000000000000000000stake --keyring-backend test --home $DATA_DIR --keyring-backend test --chain-id $CHAINID
-echo "prepare genesis: Collect genesis tx"
-./ethermintd collect-gentxs --home $DATA_DIR
 echo "prepare genesis: Run validate-genesis to ensure everything worked and that the genesis file is setup correctly"
-./ethermintd validate-genesis --home $DATA_DIR
+./ethermintd validate-genesis --home /ethermint
 
-echo "starting ethermint node $i in background ..."
-./ethermintd start --pruning=nothing --rpc.unsafe \
---keyring-backend test --home $DATA_DIR \
->$DATA_DIR/node.log 2>&1 & disown
+echo "starting ethermint node $ID in background ..."
+./ethermintd start \
+--home /ethermint \
+--keyring-backend test
 
 echo "started ethermint node"
 tail -f /dev/null
\ No newline at end of file