diff --git a/node/core/executor.go b/node/core/executor.go
index 0d8895658..a55c8c1bd 100644
--- a/node/core/executor.go
+++ b/node/core/executor.go
@@ -418,3 +418,202 @@ func (e *Executor) getParamsAndValsAtHeight(height int64) (*tmproto.BatchParams,
 func (e *Executor) L2Client() *types.RetryableClient {
 	return e.l2Client
 }
+
+// ============================================================================
+// L2NodeV2 interface implementation for sequencer mode
+// ============================================================================
+
+// RequestBlockDataV2 requests block data based on parent hash.
+// This differs from RequestBlockData which uses height.
+// Using parent hash allows for proper fork chain handling in the future.
+func (e *Executor) RequestBlockDataV2(parentHashBytes []byte) (*l2node.BlockV2, bool, error) {
+	if e.l1MsgReader == nil {
+		return nil, false, fmt.Errorf("RequestBlockDataV2 is not allowed to be called")
+	}
+	parentHash := common.BytesToHash(parentHashBytes)
+
+	// Read L1 messages
+	fromIndex := e.nextL1MsgIndex
+	l1Messages := e.l1MsgReader.ReadL1MessagesInRange(fromIndex, fromIndex+e.maxL1MsgNumPerBlock-1)
+	transactions := make(eth.Transactions, len(l1Messages))
+
+	collectedL1Msgs := false
+	if len(l1Messages) > 0 {
+		queueIndex := fromIndex
+		for i, l1Message := range l1Messages {
+			transaction := eth.NewTx(&l1Message.L1MessageTx)
+			transactions[i] = transaction
+			if queueIndex != l1Message.QueueIndex {
+				e.logger.Error("unexpected l1message queue index", "expected", queueIndex, "actual", l1Message.QueueIndex)
+				return nil, false, types.ErrInvalidL1MessageOrder
+			}
+			queueIndex++
+		}
+		collectedL1Msgs = true
+	}
+
+	// Call geth to assemble block based on parent hash
+	l2Block, err := e.l2Client.AssembleL2BlockV2(context.Background(), parentHash, transactions)
+	if err != nil {
+		e.logger.Error("failed to assemble block v2", "parentHash", parentHash.Hex(), "error", err)
+		return nil, false, err
+	}
+
+	e.logger.Info("AssembleL2BlockV2 success ",
+		"number", l2Block.Number,
+		"hash", l2Block.Hash.Hex(),
+		"parentHash", l2Block.ParentHash.Hex(),
+		"tx length", len(l2Block.Transactions),
+		"collectedL1Msgs", collectedL1Msgs,
+	)
+
+	return executableL2DataToBlockV2(l2Block), collectedL1Msgs, nil
+}
+
+// ApplyBlockV2 applies a block to the L2 execution layer.
+// This is used in sequencer mode after block validation.
+func (e *Executor) ApplyBlockV2(block *l2node.BlockV2) error {
+	// Convert BlockV2 to ExecutableL2Data for geth
+	execBlock := blockV2ToExecutableL2Data(block)
+
+	// Check if block is already applied
+	height, err := e.l2Client.BlockNumber(context.Background())
+	if err != nil {
+		return err
+	}
+
+	if execBlock.Number <= height {
+		e.logger.Info("ignore it, the block was already applied", "block number", execBlock.Number)
+		return nil
+	}
+
+	// We only accept continuous blocks
+	if execBlock.Number > height+1 {
+		return types.ErrWrongBlockNumber
+	}
+
+	// Apply the block (no batch hash in sequencer mode for now)
+	err = e.l2Client.NewL2Block(context.Background(), execBlock, nil)
+	if err != nil {
+		e.logger.Error("failed to apply block v2", "error", err)
+		return err
+	}
+
+	// Update L1 message index
+	e.updateNextL1MessageIndex(execBlock)
+
+	e.metrics.Height.Set(float64(execBlock.Number))
+	e.logger.Info("ApplyBlockV2 success", "number", execBlock.Number, "hash", execBlock.Hash.Hex())
+
+	return nil
+}
+
+// GetBlockByNumber retrieves a block by its number from the L2 execution layer.
+// Uses standard eth_getBlockByNumber JSON-RPC.
+func (e *Executor) GetBlockByNumber(height uint64) (*l2node.BlockV2, error) {
+	block, err := e.l2Client.BlockByNumber(context.Background(), big.NewInt(int64(height)))
+	if err != nil {
+		e.logger.Error("failed to get block by number", "height", height, "error", err)
+		return nil, err
+	}
+	return ethBlockToBlockV2(block)
+}
+
+// GetLatestBlockV2 returns the latest block from the L2 execution layer.
+// Uses standard eth_getBlockByNumber JSON-RPC with nil (latest).
+func (e *Executor) GetLatestBlockV2() (*l2node.BlockV2, error) {
+	block, err := e.l2Client.BlockByNumber(context.Background(), nil)
+	if err != nil {
+		e.logger.Error("failed to get latest block", "error", err)
+		return nil, err
+	}
+	return ethBlockToBlockV2(block)
+}
+
+// ==================== Type Conversion Functions ====================
+
+// ethBlockToBlockV2 converts eth.Block to BlockV2
+func ethBlockToBlockV2(block *eth.Block) (*l2node.BlockV2, error) {
+	if block == nil {
+		return nil, fmt.Errorf("block is nil")
+	}
+	header := block.Header()
+
+	// Encode transactions using MarshalBinary (handles EIP-2718 typed transactions correctly)
+	// Initialize as empty slice (not nil) to ensure JSON serialization produces [] instead of null
+	txs := make([][]byte, 0, len(block.Transactions()))
+	for _, tx := range block.Transactions() {
+		bz, err := tx.MarshalBinary()
+		if err != nil {
+			return nil, fmt.Errorf("failed to marshal tx, error: %v", err)
+		}
+		txs = append(txs, bz)
+	}
+
+	return &l2node.BlockV2{
+		ParentHash:         header.ParentHash,
+		Miner:              header.Coinbase,
+		Number:             header.Number.Uint64(),
+		GasLimit:           header.GasLimit,
+		BaseFee:            header.BaseFee,
+		Timestamp:          header.Time,
+		Transactions:       txs,
+		StateRoot:          header.Root,
+		GasUsed:            header.GasUsed,
+		ReceiptRoot:        header.ReceiptHash,
+		LogsBloom:          header.Bloom.Bytes(),
+		NextL1MessageIndex: header.NextL1MsgIndex,
+		Hash:               block.Hash(),
+	}, nil
+}
+
+// blockV2ToExecutableL2Data converts BlockV2 to ExecutableL2Data
+func blockV2ToExecutableL2Data(block *l2node.BlockV2) *catalyst.ExecutableL2Data {
+	if block == nil {
+		return nil
+	}
+	// Ensure Transactions is not nil (JSON requires [] not null)
+	txs := block.Transactions
+	if txs == nil {
+		txs = make([][]byte, 0)
+	}
+	return &catalyst.ExecutableL2Data{
+		ParentHash:         block.ParentHash,
+		Miner:              block.Miner,
+		Number:             block.Number,
+		GasLimit:           block.GasLimit,
+		BaseFee:            block.BaseFee,
+		Timestamp:          block.Timestamp,
+		Transactions:       txs,
+		StateRoot:          block.StateRoot,
+		GasUsed:            block.GasUsed,
+		ReceiptRoot:        block.ReceiptRoot,
+		LogsBloom:          block.LogsBloom,
+		WithdrawTrieRoot:   block.WithdrawTrieRoot,
+		NextL1MessageIndex: block.NextL1MessageIndex,
+		Hash:               block.Hash,
+	}
+}
+
+// executableL2DataToBlockV2 converts ExecutableL2Data to BlockV2
+func executableL2DataToBlockV2(data *catalyst.ExecutableL2Data) *l2node.BlockV2 {
+	if data == nil {
+		return nil
+	}
+	return &l2node.BlockV2{
+		ParentHash:         data.ParentHash,
+		Miner:              data.Miner,
+		Number:             data.Number,
+		GasLimit:           data.GasLimit,
+		BaseFee:            data.BaseFee,
+		Timestamp:          data.Timestamp,
+		Transactions:       data.Transactions,
+		StateRoot:          data.StateRoot,
+		GasUsed:            data.GasUsed,
+		ReceiptRoot:        data.ReceiptRoot,
+		LogsBloom:          data.LogsBloom,
+		WithdrawTrieRoot:   data.WithdrawTrieRoot,
+		NextL1MessageIndex: data.NextL1MessageIndex,
+		Hash:               data.Hash,
+	}
+}
diff --git a/node/types/retryable_client.go b/node/types/retryable_client.go
index 3d3ad949d..74328e71d 100644
--- a/node/types/retryable_client.go
+++ b/node/types/retryable_client.go
@@ -172,7 +172,25 @@ func (rc *RetryableClient) HeaderByNumber(ctx context.Context, blockNumber *big.
 	if retryErr := backoff.Retry(func() error {
 		resp, respErr := rc.ethClient.HeaderByNumber(ctx, blockNumber)
 		if respErr != nil {
-			rc.logger.Info("failed to call BlockNumber", "error", respErr)
+			rc.logger.Info("failed to call HeaderByNumber", "error", respErr)
+			if retryableError(respErr) {
+				return respErr
+			}
+			err = respErr
+		}
+		ret = resp
+		return nil
+	}, rc.b); retryErr != nil {
+		return nil, retryErr
+	}
+	return
+}
+
+func (rc *RetryableClient) BlockByNumber(ctx context.Context, blockNumber *big.Int) (ret *eth.Block, err error) {
+	if retryErr := backoff.Retry(func() error {
+		resp, respErr := rc.ethClient.BlockByNumber(ctx, blockNumber)
+		if respErr != nil {
+			rc.logger.Info("failed to call BlockByNumber", "error", respErr)
 			if retryableError(respErr) {
 				return respErr
 			}
@@ -233,3 +251,26 @@ func retryableError(err error) bool {
 	// 	strings.Contains(err.Error(), Timeout)
 	return !strings.Contains(err.Error(), DiscontinuousBlockError)
 }
+
+// ============================================================================
+// L2NodeV2 methods for sequencer mode
+// ============================================================================
+
+// AssembleL2BlockV2 assembles a L2 block based on parent hash.
+func (rc *RetryableClient) AssembleL2BlockV2(ctx context.Context, parentHash common.Hash, transactions eth.Transactions) (ret *catalyst.ExecutableL2Data, err error) {
+	if retryErr := backoff.Retry(func() error {
+		resp, respErr := rc.authClient.AssembleL2BlockV2(ctx, parentHash, transactions)
+		if respErr != nil {
+			rc.logger.Info("failed to AssembleL2BlockV2", "error", respErr)
+			if retryableError(respErr) {
+				return respErr
+			}
+			err = respErr
+		}
+		ret = resp
+		return nil
+	}, rc.b); retryErr != nil {
+		return nil, retryErr
+	}
+	return
+}
diff --git a/ops/docker-sequencer-test/Dockerfile.l2-geth-test b/ops/docker-sequencer-test/Dockerfile.l2-geth-test
new file mode 100644
index 000000000..1c053f44b
--- /dev/null
+++ b/ops/docker-sequencer-test/Dockerfile.l2-geth-test
@@ -0,0 +1,26 @@
+# Build Geth for Sequencer Test
+# Build context should be bitget/ (parent of morph)
+FROM ghcr.io/morph-l2/go-ubuntu-builder:go-1.24-ubuntu AS builder
+
+# Copy local go-ethereum (not submodule)
+COPY ./go-ethereum /go-ethereum
+WORKDIR /go-ethereum
+
+# Build geth
+RUN go run build/ci.go install ./cmd/geth
+
+# Runtime stage
+FROM ghcr.io/morph-l2/go-ubuntu-builder:go-1.24-ubuntu
+
+RUN apt-get -qq update && apt-get -qq install -y --no-install-recommends \
+    ca-certificates bash curl \
+    && rm -rf /var/lib/apt/lists/*
+
+COPY --from=builder /go-ethereum/build/bin/geth /usr/local/bin/
+COPY ./morph/ops/docker-sequencer-test/entrypoint-l2.sh /entrypoint.sh
+
+VOLUME ["/db"]
+
+ENTRYPOINT ["/bin/bash", "/entrypoint.sh"]
+
+EXPOSE 8545 8546 8551 30303 30303/udp
diff --git a/ops/docker-sequencer-test/Dockerfile.l2-node-test b/ops/docker-sequencer-test/Dockerfile.l2-node-test
new file mode 100644
index 000000000..1ece1eb81
--- /dev/null
+++ b/ops/docker-sequencer-test/Dockerfile.l2-node-test
@@ -0,0 +1,47 @@
+# Build Stage
+FROM ghcr.io/morph-l2/go-ubuntu-builder:go-1.24-ubuntu AS builder
+
+# First: Copy only go.mod/go.sum files to cache dependencies
+# Order matters for cache efficiency
+
+# Copy go-ethereum dependency files
+COPY ./go-ethereum/go.mod ./go-ethereum/go.sum /bitget/go-ethereum/
+
+# Copy tendermint dependency files
+COPY ./tendermint/go.mod ./tendermint/go.sum /bitget/tendermint/
+
+# Copy morph go.work and all module dependency files
+COPY ./morph/go.work ./morph/go.work.sum /bitget/morph/
+COPY ./morph/node/go.mod ./morph/node/go.sum /bitget/morph/node/
+COPY ./morph/bindings/go.mod ./morph/bindings/go.sum /bitget/morph/bindings/
+COPY ./morph/contracts/go.mod ./morph/contracts/go.sum /bitget/morph/contracts/
+COPY ./morph/oracle/go.mod ./morph/oracle/go.sum /bitget/morph/oracle/
+COPY ./morph/tx-submitter/go.mod ./morph/tx-submitter/go.sum /bitget/morph/tx-submitter/
+COPY ./morph/ops/l2-genesis/go.mod ./morph/ops/l2-genesis/go.sum /bitget/morph/ops/l2-genesis/
+COPY ./morph/ops/tools/go.mod ./morph/ops/tools/go.sum /bitget/morph/ops/tools/
+COPY ./morph/token-price-oracle/go.mod ./morph/token-price-oracle/go.sum /bitget/morph/token-price-oracle/
+
+# Download dependencies (this layer is cached if go.mod/go.sum don't change)
+WORKDIR /bitget/morph/node
+RUN go mod download -x
+
+# Now copy all source code
+COPY ./go-ethereum /bitget/go-ethereum
+COPY ./tendermint /bitget/tendermint
+COPY ./morph /bitget/morph
+
+# Build (no need to download again, just compile)
+WORKDIR /bitget/morph/node
+RUN make build
+
+# Final Stage
+FROM ghcr.io/morph-l2/go-ubuntu-builder:go-1.24-ubuntu
+
+RUN apt-get -qq update \
+    && apt-get -qq install -y --no-install-recommends ca-certificates \
+    && rm -rf /var/lib/apt/lists/*
+
+COPY --from=builder /bitget/morph/node/build/bin/tendermint /usr/local/bin/
+COPY --from=builder /bitget/morph/node/build/bin/morphnode /usr/local/bin/
+
+CMD ["morphnode", "--home", "/data"]
diff --git a/ops/docker-sequencer-test/README.md b/ops/docker-sequencer-test/README.md
new file mode 100644
index 000000000..156f2d64a
--- /dev/null
+++ b/ops/docker-sequencer-test/README.md
@@ -0,0 +1 @@
+This directory is intended for Docker testing purposes only and may be removed in the future.
\ No newline at end of file
diff --git a/ops/docker-sequencer-test/docker-compose.override.yml b/ops/docker-sequencer-test/docker-compose.override.yml
new file mode 100644
index 000000000..50d960e27
--- /dev/null
+++ b/ops/docker-sequencer-test/docker-compose.override.yml
@@ -0,0 +1,43 @@
+# Override file to use test images
+# Copy this to ops/docker/docker-compose.override.yml before running test
+version: '3.8'
+
+services:
+  morph-geth-0:
+    image: morph-geth-test:latest
+    build:
+      context: ../..
+      dockerfile: ops/docker-sequencer-test/Dockerfile.l2-geth-test
+
+  morph-geth-1:
+    image: morph-geth-test:latest
+
+  morph-geth-2:
+    image: morph-geth-test:latest
+
+  # morph-geth-3:
+  #   image: morph-geth-test:latest
+
+  node-0:
+    image: morph-node-test:latest
+    build:
+      context: ../..
+      dockerfile: ops/docker-sequencer-test/Dockerfile.l2-node-test
+    environment:
+      - SEQUENCER_PRIVATE_KEY=${SEQUENCER_PRIVATE_KEY:-0xac0974bec39a17e36ba4a6b4d238ff944bacb478cbed5efcae784d7bf4f2ff80}
+
+  node-1:
+    image: morph-node-test:latest
+
+  node-2:
+    image: morph-node-test:latest
+
+  # node-3:
+  #   image: morph-node-test:latest
+
+  sentry-geth-0:
+    image: morph-geth-test:latest
+
+  sentry-node-0:
+    image: morph-node-test:latest
+
diff --git a/ops/docker-sequencer-test/entrypoint-l2.sh b/ops/docker-sequencer-test/entrypoint-l2.sh
new file mode 100644
index 000000000..04dfed476
--- /dev/null
+++ b/ops/docker-sequencer-test/entrypoint-l2.sh
@@ -0,0 +1,42 @@
+#!/bin/bash
+set -e
+
+GETH_DATA_DIR=${GETH_DATA_DIR:-/db}
+GENESIS_FILE_PATH=${GENESIS_FILE_PATH:-/genesis.json}
+JWT_SECRET_PATH=${JWT_SECRET_PATH:-/jwt-secret.txt}
+
+# Initialize geth if not already done
+if [ ! -d "$GETH_DATA_DIR/geth/chaindata" ]; then
+    echo "Initializing geth with genesis file..."
+    geth init --datadir "$GETH_DATA_DIR" "$GENESIS_FILE_PATH"
+fi
+
+echo "Starting geth..."
+exec geth \
+    --datadir "$GETH_DATA_DIR" \
+    --http \
+    --http.addr "0.0.0.0" \
+    --http.port 8545 \
+    --http.api "eth,net,web3,debug,txpool,engine" \
+    --http.corsdomain "*" \
+    --http.vhosts "*" \
+    --ws \
+    --ws.addr "0.0.0.0" \
+    --ws.port 8546 \
+    --ws.api "eth,net,web3,debug,txpool,engine" \
+    --ws.origins "*" \
+    --authrpc.addr "0.0.0.0" \
+    --authrpc.port 8551 \
+    --authrpc.vhosts "*" \
+    --authrpc.jwtsecret "$JWT_SECRET_PATH" \
+    --networkid 53077 \
+    --nodiscover \
+    --syncmode full \
+    --gcmode archive \
+    --metrics \
+    --metrics.addr "0.0.0.0" \
+    --pprof \
+    --pprof.addr "0.0.0.0" \
+    --verbosity 3 \
+    "$@"
+
diff --git a/ops/docker-sequencer-test/run-test.sh b/ops/docker-sequencer-test/run-test.sh
new file mode 100755
index 000000000..823ba5273
--- /dev/null
+++ b/ops/docker-sequencer-test/run-test.sh
@@ -0,0 +1,553 @@
+#!/bin/bash
+# Sequencer Upgrade Test Runner
+# Reuses devnet-morph logic but with test-specific docker images
+
+set -e
+
+SCRIPT_DIR="$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)"
+MORPH_ROOT="$(cd "$SCRIPT_DIR/../.." && pwd)"
+BITGET_ROOT="$(cd "$MORPH_ROOT/.." && pwd)"
+OPS_DIR="$MORPH_ROOT/ops"
+DOCKER_DIR="$OPS_DIR/docker"
+DEVNET_DIR="$OPS_DIR/devnet-morph"
+
+# Colors for output
+RED='\033[0;31m'
+GREEN='\033[0;32m'
+YELLOW='\033[1;33m'
+BLUE='\033[0;34m'
+NC='\033[0m'
+
+log_info() { echo -e "${BLUE}[INFO]${NC} $1"; }
+log_success() { echo -e "${GREEN}[SUCCESS]${NC} $1"; }
+log_warn() { echo -e "${YELLOW}[WARN]${NC} $1"; }
+log_error() { echo -e "${RED}[ERROR]${NC} $1"; }
+
+# Configuration
+UPGRADE_HEIGHT=${UPGRADE_HEIGHT:-50}
+L2_RPC="http://127.0.0.1:8545"
+L2_RPC_NODE1="http://127.0.0.1:8645"
+
+# ========== Helper Functions ==========
+
+wait_for_rpc() {
+    local rpc_url="$1"
+    local max_retries=${2:-60}
+    local retry=0
+    
+    log_info "Waiting for RPC at $rpc_url..."
+    while [ $retry -lt $max_retries ]; do
+        if curl -s -X POST -H "Content-Type: application/json" \
+            --data '{"jsonrpc":"2.0","method":"eth_blockNumber","params":[],"id":1}' \
+            "$rpc_url" 2>/dev/null | grep -q "result"; then
+            log_success "RPC is ready!"
+            return 0
+        fi
+        retry=$((retry + 1))
+        sleep 2
+    done
+    log_error "Timeout waiting for RPC"
+    return 1
+}
+
+get_block_number() {
+    local rpc_url="${1:-$L2_RPC}"
+    local result
+    result=$(curl -s -X POST -H "Content-Type: application/json" \
+        --data '{"jsonrpc":"2.0","method":"eth_blockNumber","params":[],"id":1}' \
+        "$rpc_url" 2>/dev/null)
+    echo "$result" | grep -o '"result":"[^"]*"' | cut -d'"' -f4 | xargs printf "%d" 2>/dev/null || echo "0"
+}
+
+wait_for_block() {
+    local target_height=$1
+    local rpc_url="${2:-$L2_RPC}"
+    
+    log_info "Waiting for block $target_height..."
+    while true; do
+        local current=$(get_block_number "$rpc_url")
+        if [ "$current" -ge "$target_height" ]; then
+            log_success "Reached block $current"
+            return 0
+        fi
+        echo -ne "\r  Current block: $current / $target_height"
+        sleep 2
+    done
+}
+
+# ========== Setup Functions ==========
+
+# Update upgrade height in tendermint code
+set_upgrade_height() {
+    local height=$1
+    log_info "Setting upgrade height to $height..."
+    
+    local upgrade_file="$MORPH_ROOT/../tendermint/upgrade/upgrade.go"
+    if [ -f "$upgrade_file" ]; then
+        sed -i '' "s/UpgradeBlockHeight int64 = [0-9]*/UpgradeBlockHeight int64 = $height/" "$upgrade_file"
+        log_success "Updated upgrade height in $upgrade_file"
+    else
+        log_warn "upgrade.go not found at $upgrade_file"
+    fi
+}
+
+# Build test images (with -test suffix)
+# Uses bitget/ as build context to access local go-ethereum and tendermint
+build_test_images() {
+    log_info "Building test Docker images..."
+    log_info "Using build context: $BITGET_ROOT"
+    
+    # Build go-ubuntu-builder if needed
+    cd "$MORPH_ROOT"
+    make go-ubuntu-builder
+    
+    # Build from bitget/ directory to access all repos
+    cd "$BITGET_ROOT"
+    
+    # # Copy go module cache to avoid network downloads
+    # if [ -d "$HOME/go/pkg/mod" ]; then
+    #     log_info "Copying go module cache to build context..."
+    #     rm -rf .gomodcache
+    #     cp -r "$HOME/go/pkg/mod" .gomodcache
+    # else
+    #     log_warn "Go module cache not found at $HOME/go/pkg/mod"
+    #     log_warn "Build may fail due to network issues"
+    # fi
+    
+    # Build test geth image
+    log_info "Building morph-geth-test (using local go-ethereum)..."
+    docker build -t morph-geth-test:latest \
+        -f morph/ops/docker-sequencer-test/Dockerfile.l2-geth-test .
+    
+    # Build test node image
+    log_info "Building morph-node-test (using local go-ethereum + tendermint)..."
+    docker build -t morph-node-test:latest \
+        -f morph/ops/docker-sequencer-test/Dockerfile.l2-node-test .
+    
+    # # Cleanup go module cache copy
+    # rm -rf .gomodcache
+    
+    log_success "Test images built!"
+}
+
+# Run full devnet setup (reusing existing logic, but skip L2 startup)
+setup_devnet() {
+    log_info "Running devnet setup..."
+    cd "$MORPH_ROOT"
+    
+    # Note: upgrade height should already be set before build_test_images
+    
+    # Step 1: Start L1 and setup tendermint nodes
+    # Note: main.py calls setup_devnet_nodes() before devnet.main()
+    log_info "Step 1: Starting L1 and setting up tendermint nodes..."
+    python3 "$DEVNET_DIR/main.py" --polyrepo-dir="$MORPH_ROOT" --only-l1
+    
+    # Step 2: Deploy contracts and generate L2 genesis (without starting L2)
+    log_info "Step 2: Deploying contracts and generating L2 genesis..."
+    python3 -c "
+import sys
+import os
+import time
+import re
+import fileinput
+sys.path.insert(0, '$DEVNET_DIR')
+import devnet
+from devnet import run_command, read_json, write_json, test_port, log
+
+pjoin = os.path.join
+polyrepo_dir = '$MORPH_ROOT'
+L2_dir = pjoin(polyrepo_dir, 'ops', 'l2-genesis')
+devnet_dir = pjoin(polyrepo_dir, 'ops', 'l2-genesis', '.devnet')
+ops_dir = pjoin(polyrepo_dir, 'ops', 'docker')
+contracts_dir = pjoin(polyrepo_dir, 'contracts')
+
+os.makedirs(devnet_dir, exist_ok=True)
+
+# Generate network config
+devnet_cfg_orig = pjoin(L2_dir, 'deploy-config', 'devnet-deploy-config.json')
+deploy_config = read_json(devnet_cfg_orig)
+deploy_config['l1GenesisBlockTimestamp'] = '0x{:x}'.format(int(time.time()))
+deploy_config['l1StartingBlockTag'] = 'earliest'
+temp_deploy_config = pjoin(devnet_dir, 'deploy-config.json')
+write_json(temp_deploy_config, deploy_config)
+
+# Deploy L1 contracts
+deployment_dir = pjoin(devnet_dir, 'devnetL1.json')
+run_command(['rm', '-f', deployment_dir], env={}, cwd=contracts_dir)
+log.info('Deploying L1 Proxy contracts...')
+run_command(['yarn', 'build'], env={}, cwd=contracts_dir)
+run_command(['npx', 'hardhat', 'deploy', '--network', 'l1', '--storagepath', deployment_dir, '--concurrent', 'true'], env={}, cwd=contracts_dir)
+
+# Generate L2 genesis
+log.info('Generating L2 genesis and rollup configs...')
+run_command([
+    'env', 'CGO_ENABLED=1', 'CGO_LDFLAGS=\"-ldl\"',
+    'go', 'run', 'cmd/main.go', 'genesis', 'l2',
+    '--l1-rpc', 'http://localhost:9545',
+    '--deploy-config', temp_deploy_config,
+    '--deployment-dir', deployment_dir,
+    '--outfile.l2', pjoin(devnet_dir, 'genesis-l2.json'),
+    '--outfile.genbatchheader', pjoin(devnet_dir, 'genesis-batch-header.json'),
+    '--outfile.rollup', pjoin(devnet_dir, 'rollup.json')
+], cwd=L2_dir)
+
+# Initialize contracts
+log.info('Deploying L1 Impl contracts and initialize...')
+rollup_cfg = read_json(pjoin(devnet_dir, 'rollup.json'))
+genesis_batch_header = rollup_cfg['genesis_batch_header']
+contracts_config = pjoin(contracts_dir, 'src', 'deploy-config', 'l1.ts')
+pattern3 = re.compile(\"batchHeader: '.*'\")
+for line in fileinput.input(contracts_config, inplace=True):
+    modified_line = re.sub(pattern3, f\"batchHeader: '{genesis_batch_header}'\", line)
+    print(modified_line, end='')
+run_command(['npx', 'hardhat', 'initialize', '--network', 'l1', '--storagepath', deployment_dir, '--concurrent', 'true'], env={}, cwd=contracts_dir)
+
+# Staking
+log.info('Staking sequencers...')
+addresses = {}
+deployment = read_json(deployment_dir)
+for d in deployment:
+    addresses[d['name']] = d['address']
+for i in range(4):
+    run_command(['cast', 'send', addresses['Proxy__L1Staking'],
+                 'register(bytes32,bytes memory)',
+                 deploy_config['l2StakingTmKeys'][i],
+                 deploy_config['l2StakingBlsKeys'][i],
+                 '--rpc-url', 'http://127.0.0.1:9545',
+                 '--value', '1ether',
+                 '--private-key', deploy_config['l2StakingPks'][i]
+                 ])
+
+# Update .env file
+log.info('Updating .env file...')
+env_file = pjoin(ops_dir, '.env')
+env_data = {}
+with open(env_file, 'r+') as envfile:
+    env_content = envfile.readlines()
+    for line in env_content:
+        line = line.strip()
+        if line and not line.startswith('#'):
+            parts = line.split('=', 1)
+            if len(parts) == 2:
+                env_data[parts[0].strip()] = parts[1].strip()
+    env_data['L1_CROSS_DOMAIN_MESSENGER'] = addresses['Proxy__L1CrossDomainMessenger']
+    env_data['MORPH_PORTAL'] = addresses['Proxy__L1MessageQueueWithGasPriceOracle']
+    env_data['MORPH_ROLLUP'] = addresses['Proxy__Rollup']
+    env_data['MORPH_L1STAKING'] = addresses['Proxy__L1Staking']
+    envfile.seek(0)
+    for key, value in env_data.items():
+        envfile.write(f'{key}={value}\n')
+    envfile.truncate()
+
+log.info('Contract deployment and genesis generation complete!')
+log.info('Skipping L2 startup - will be done with test images.')
+"
+    
+    log_success "Devnet setup complete (L2 not started yet)"
+}
+
+# Docker compose command with override file
+# Note: -f must explicitly include override file when using non-default compose file name
+COMPOSE_CMD="docker compose -f docker-compose-4nodes.yml -f docker-compose.override.yml"
+COMPOSE_CMD_NO_OVERRIDE="docker compose -f docker-compose-4nodes.yml"
+
+# Copy override file to use test images
+setup_override() {
+    log_info "Setting up docker-compose override for test images..."
+    cp "$SCRIPT_DIR/docker-compose.override.yml" "$DOCKER_DIR/docker-compose.override.yml"
+    log_success "Override file copied to $DOCKER_DIR/"
+}
+
+# Remove override file
+remove_override() {
+    rm -f "$DOCKER_DIR/docker-compose.override.yml"
+}
+
+# Start L2 with test images
+start_l2_test() {
+    log_info "Starting L2 with test images..."
+    cd "$DOCKER_DIR"
+    
+    # Setup override file
+    setup_override
+    
+    # Read the .env file to get contract addresses
+    source .env 2>/dev/null || true
+    
+    # Set sequencer private key
+    export SEQUENCER_PRIVATE_KEY="0xac0974bec39a17e36ba4a6b4d238ff944bacb478cbed5efcae784d7bf4f2ff80"
+    
+    # Stop any existing L2 containers
+    $COMPOSE_CMD stop \
+        morph-geth-0 morph-geth-1 morph-geth-2 morph-geth-3 \
+        node-0 node-1 node-2 node-3 2>/dev/null || true
+    
+    # Note: Test images should already be built by build_test_images()
+    # Uncomment below if you need to rebuild during start
+    # log_info "Building L2 containers with test images..."
+    # $COMPOSE_CMD build morph-geth-0 node-0
+    
+    # Start L2 geth nodes
+    log_info "Starting L2 geth nodes..."
+    $COMPOSE_CMD up -d morph-geth-0 morph-geth-1 morph-geth-2 morph-geth-3
+    
+    sleep 5
+    
+    # Start L2 tendermint nodes
+    log_info "Starting L2 tendermint nodes..."
+    $COMPOSE_CMD up -d node-0 node-1 node-2 node-3
+    
+    wait_for_rpc "$L2_RPC"
+    log_success "L2 is running with test images!"
+}
+
+# ========== Test Functions ==========
+
+test_pbft_mode() {
+    log_info "========== Phase 1: Testing PBFT Mode =========="
+    
+    local start_block=$(get_block_number)
+    log_info "Starting block: $start_block"
+    
+    # Wait for some blocks
+    local target=$((start_block + 10))
+    wait_for_block $target
+    
+    # Verify nodes in sync
+    local block0=$(get_block_number "$L2_RPC")
+    local block1=$(get_block_number "$L2_RPC_NODE1")
+    
+    local diff=$((block0 - block1))
+    if [ ${diff#-} -le 2 ]; then
+        log_success "Nodes in sync (node0: $block0, node1: $block1)"
+    else
+        log_error "Nodes out of sync!"
+        return 1
+    fi
+}
+
+test_upgrade() {
+    log_info "========== Phase 2: Waiting for Upgrade =========="
+    log_info "Upgrade height: $UPGRADE_HEIGHT"
+    
+    wait_for_block $UPGRADE_HEIGHT
+    sleep 10
+    
+    # Verify network continues
+    local post_upgrade=$(get_block_number)
+    wait_for_block $((post_upgrade + 5))
+    
+    log_success "Upgrade completed! Network continues producing blocks."
+}
+
+test_sequencer_mode() {
+    log_info "========== Phase 3: Testing Sequencer Mode =========="
+    
+    local start_block=$(get_block_number)
+    wait_for_block $((start_block + 20))
+    
+    local block0=$(get_block_number "$L2_RPC")
+    local block1=$(get_block_number "$L2_RPC_NODE1")
+    
+    local diff=$((block0 - block1))
+    if [ ${diff#-} -le 2 ]; then
+        log_success "Nodes in sync after upgrade (node0: $block0, node1: $block1)"
+    else
+        log_error "Nodes out of sync after upgrade!"
+        return 1
+    fi
+}
+
+test_fullnode_sync() {
+    log_info "========== Phase 4: Testing Fullnode Sync =========="
+    
+    local current_height=$(get_block_number)
+    log_info "Current height: $current_height"
+    
+    cd "$DOCKER_DIR"
+    
+    # Start sentry node (fullnode)
+    log_info "Starting fullnode (sentry-node-0)..."
+    $COMPOSE_CMD up -d sentry-geth-0 sentry-node-0
+    
+    sleep 10
+    wait_for_rpc "http://127.0.0.1:8945"
+    
+    # Wait for sync
+    local target_sync=$((current_height - 5))
+    local max_wait=300
+    local waited=0
+    
+    while [ $waited -lt $max_wait ]; do
+        local fn_block=$(get_block_number "http://127.0.0.1:8945")
+        if [ "$fn_block" -ge "$target_sync" ]; then
+            log_success "Fullnode synced to block $fn_block"
+            return 0
+        fi
+        echo -ne "\r  Fullnode: $fn_block / $target_sync"
+        sleep 5
+        waited=$((waited + 5))
+    done
+    
+    log_error "Fullnode sync timeout"
+    return 1
+}
+
+# ========== Transaction Generator ==========
+
+start_tx_generator() {
+    log_info "Starting transaction generator..."
+    
+    # Simple tx generator using cast
+    (
+        while true; do
+            RANDOM_ADDR="0x$(openssl rand -hex 20)"
+            cast send --private-key 0xac0974bec39a17e36ba4a6b4d238ff944bacb478cbed5efcae784d7bf4f2ff80 \
+                --rpc-url "$L2_RPC" \
+                --value 1wei \
+                "$RANDOM_ADDR" 2>/dev/null || true
+            sleep ${TX_INTERVAL:-5}
+        done
+    ) &
+    TX_GEN_PID=$!
+    log_info "TX generator started (PID: $TX_GEN_PID)"
+}
+
+stop_tx_generator() {
+    if [ -n "$TX_GEN_PID" ]; then
+        kill $TX_GEN_PID 2>/dev/null || true
+        log_info "TX generator stopped"
+    fi
+}
+
+# ========== Cleanup ==========
+
+cleanup() {
+    log_info "Cleaning up..."
+    stop_tx_generator
+    cd "$DOCKER_DIR"
+    $COMPOSE_CMD_NO_OVERRIDE down -v 2>/dev/null || true
+    remove_override
+}
+
+# ========== Main Commands ==========
+
+run_full_test() {
+    log_info "=========================================="
+    log_info "  Sequencer Upgrade Test"
+    log_info "  Upgrade Height: $UPGRADE_HEIGHT"
+    log_info "=========================================="
+    
+    trap cleanup EXIT
+    
+    # Set upgrade height BEFORE building (so it's compiled into the binary)
+    set_upgrade_height "$UPGRADE_HEIGHT"
+    
+    # Build test images (now with correct upgrade height)
+    build_test_images
+    
+    # Setup devnet (L1 + contracts + L2 genesis)
+    setup_devnet
+    
+    # Start L2 with test images
+    start_l2_test
+    
+    # Start tx generator
+    start_tx_generator
+    
+    # Run tests
+    test_pbft_mode
+    test_upgrade
+    test_sequencer_mode
+    test_fullnode_sync
+    
+    stop_tx_generator
+    
+    log_success "=========================================="
+    log_success "  ALL TESTS PASSED!"
+    log_success "=========================================="
+}
+
+show_status() {
+    echo "Node 1:         Block $(get_block_number http://127.0.0.1:8645)"
+    echo "Node 2:         Block $(get_block_number http://127.0.0.1:8745)"
+    echo "Node 3:         Block $(get_block_number http://127.0.0.1:8845)"
+     echo "Node 0 (seq-0): Block $(get_block_number http://127.0.0.1:8545)"
+    echo "Sentry:         Block $(get_block_number http://127.0.0.1:8945 2>/dev/null || echo 'N/A')"
+}
+
+show_logs() {
+    cd "$DOCKER_DIR"
+    $COMPOSE_CMD_NO_OVERRIDE logs -f "$@"
+}
+
+# ========== Command Parsing ==========
+
+case "${1:-}" in
+    build)
+        build_test_images
+        ;;
+    setup)
+        setup_devnet
+        ;;
+    start)
+        start_l2_test
+        ;;
+    stop)
+        cd "$DOCKER_DIR"
+        $COMPOSE_CMD_NO_OVERRIDE down
+        ;;
+    clean)
+        cleanup
+        # Also clean L2 genesis
+        rm -rf "$OPS_DIR/l2-genesis/.devnet"
+        rm -rf "$DOCKER_DIR/.devnet"
+        ;;
+    logs)
+        shift
+        show_logs "$@"
+        ;;
+    test)
+        run_full_test
+        ;;
+    tx)
+        start_tx_generator
+        wait
+        ;;
+    status)
+        show_status
+        ;;
+    upgrade-height)
+        set_upgrade_height "${2:-50}"
+        ;;
+    *)
+        echo "Sequencer Upgrade Test Runner"
+        echo ""
+        echo "Usage: $0 {build|setup|start|stop|clean|logs|test|tx|status|upgrade-height}"
+        echo ""
+        echo "Commands:"
+        echo "  build           - Build test Docker images (morph-geth-test, morph-node-test)"
+        echo "  setup           - Run full devnet setup (L1 + contracts + L2 genesis)"
+        echo "  start           - Start L2 nodes with test images"
+        echo "  stop            - Stop all containers"
+        echo "  clean           - Stop and remove all containers and data"
+        echo "  logs [service]  - Show container logs"
+        echo "  test            - Run full upgrade test"
+        echo "  tx              - Start transaction generator"
+        echo "  status          - Show current block numbers"
+        echo "  upgrade-height N - Set upgrade height to N"
+        echo ""
+        echo "Environment Variables:"
+        echo "  UPGRADE_HEIGHT  - Block height for upgrade (default: 50)"
+        echo "  TX_INTERVAL     - Seconds between txs (default: 5)"
+        echo ""
+        echo "Test Flow:"
+        echo "  1. build        - Build test images"
+        echo "  2. setup        - Deploy L1, contracts, generate L2 genesis"
+        echo "  3. start        - Start L2 with test images"
+        echo "  4. test         - Run PBFT -> Upgrade -> Sequencer -> Fullnode tests"
+        echo ""
+        echo "Quick Start:"
+        echo "  UPGRADE_HEIGHT=50 $0 test"
+        ;;
+esac
diff --git a/ops/docker-sequencer-test/scripts/tx-generator.sh b/ops/docker-sequencer-test/scripts/tx-generator.sh
new file mode 100644
index 000000000..2311a64d5
--- /dev/null
+++ b/ops/docker-sequencer-test/scripts/tx-generator.sh
@@ -0,0 +1,74 @@
+#!/bin/sh
+# Transaction Generator for Sequencer Test
+# Sends random transactions to keep the network active
+
+set -e
+
+L2_RPC="${L2_RPC:-http://morph-geth-0:8545}"
+INTERVAL="${TX_INTERVAL:-5}"  # seconds between txs
+PRIVATE_KEY="${PRIVATE_KEY:-0xac0974bec39a17e36ba4a6b4d238ff944bacb478cbed5efcae784d7bf4f2ff80}"
+
+# Wait for L2 to be ready
+echo "Waiting for L2 RPC to be ready..."
+while true; do
+    if curl -s -X POST -H "Content-Type: application/json" \
+        --data '{"jsonrpc":"2.0","method":"eth_blockNumber","params":[],"id":1}' \
+        "$L2_RPC" | grep -q "result"; then
+        echo "L2 RPC is ready!"
+        break
+    fi
+    echo "Waiting..."
+    sleep 2
+done
+
+# Get initial nonce
+get_nonce() {
+    curl -s -X POST -H "Content-Type: application/json" \
+        --data "{\"jsonrpc\":\"2.0\",\"method\":\"eth_getTransactionCount\",\"params\":[\"0xf39Fd6e51aad88F6F4ce6aB8827279cffFb92266\",\"latest\"],\"id\":1}" \
+        "$L2_RPC" | grep -o '"result":"[^"]*"' | cut -d'"' -f4
+}
+
+# Get current block number
+get_block_number() {
+    curl -s -X POST -H "Content-Type: application/json" \
+        --data '{"jsonrpc":"2.0","method":"eth_blockNumber","params":[],"id":1}' \
+        "$L2_RPC" | grep -o '"result":"[^"]*"' | cut -d'"' -f4
+}
+
+echo "Starting transaction generator..."
+echo "L2 RPC: $L2_RPC"
+echo "Interval: ${INTERVAL}s"
+
+NONCE_HEX=$(get_nonce)
+NONCE=$((NONCE_HEX))
+TX_COUNT=0
+
+while true; do
+    BLOCK=$(get_block_number)
+    BLOCK_DEC=$((BLOCK))
+    
+    # Generate random recipient address
+    RANDOM_SUFFIX=$(od -An -N4 -tx1 /dev/urandom | tr -d ' ')
+    TO_ADDR="0x000000000000000000000000000000${RANDOM_SUFFIX}"
+    
+    # Create and send transaction
+    NONCE_HEX=$(printf "0x%x" $NONCE)
+    TX_DATA="{\"jsonrpc\":\"2.0\",\"method\":\"eth_sendTransaction\",\"params\":[{\"from\":\"0xf39Fd6e51aad88F6F4ce6aB8827279cffFb92266\",\"to\":\"${TO_ADDR}\",\"value\":\"0x1\",\"nonce\":\"${NONCE_HEX}\"}],\"id\":1}"
+    
+    RESULT=$(curl -s -X POST -H "Content-Type: application/json" --data "$TX_DATA" "$L2_RPC")
+    
+    if echo "$RESULT" | grep -q "result"; then
+        TX_HASH=$(echo "$RESULT" | grep -o '"result":"[^"]*"' | cut -d'"' -f4)
+        echo "[Block $BLOCK_DEC] TX #$TX_COUNT sent: $TX_HASH"
+        NONCE=$((NONCE + 1))
+        TX_COUNT=$((TX_COUNT + 1))
+    else
+        echo "[Block $BLOCK_DEC] TX failed: $RESULT"
+        # Refresh nonce in case of error
+        NONCE_HEX=$(get_nonce)
+        NONCE=$((NONCE_HEX))
+    fi
+    
+    sleep "$INTERVAL"
+done
+