diff --git a/protocol/cmd/dydxprotocold/cmd/root.go b/protocol/cmd/dydxprotocold/cmd/root.go
index 82a5adfe9f7..801ccbc813b 100644
--- a/protocol/cmd/dydxprotocold/cmd/root.go
+++ b/protocol/cmd/dydxprotocold/cmd/root.go
@@ -61,11 +61,9 @@ const (
 // TODO(DEC-1097): improve `cmd/` by adding tests, custom app configs, custom init cmd, and etc.
 func NewRootCmd(
 	option *RootCmdOption,
-	homeDir string,
 ) *cobra.Command {
 	return NewRootCmdWithInterceptors(
 		option,
-		homeDir,
 		func(serverCtxPtr *server.Context) {
 
 		},
@@ -80,7 +78,6 @@ func NewRootCmd(
 
 func NewRootCmdWithInterceptors(
 	option *RootCmdOption,
-	homeDir string,
 	serverCtxInterceptor func(serverCtxPtr *server.Context),
 	appConfigInterceptor func(string, *DydxAppConfig) (string, *DydxAppConfig),
 	appInterceptor func(app *dydxapp.App) *dydxapp.App,
@@ -106,7 +103,7 @@ func NewRootCmdWithInterceptors(
 		WithInput(os.Stdin).
 		WithAccountRetriever(types.AccountRetriever{}).
 		WithBroadcastMode(flags.BroadcastSync).
-		WithHomeDir(homeDir).
+		WithHomeDir(tempDir()).
 		WithViper(EnvPrefix)
 
 	rootCmd := &cobra.Command{
@@ -164,6 +161,7 @@ func NewRootCmdWithInterceptors(
 	if err != nil {
 		panic(err)
 	}
+	initClientCtx.HomeDir = ""
 	if err := autoCliOpts(tempApp, initClientCtx).EnhanceRootCommand(rootCmd); err != nil {
 		panic(err)
 	}
@@ -423,3 +421,13 @@ func appExport(
 
 	return dydxApp.ExportAppStateAndValidators(forZeroHeight, jailAllowedAddrs, modulesToExport)
 }
+
+var tempDir = func() string {
+	dir, err := os.MkdirTemp("", "dydxprotocol")
+	if err != nil {
+		dir = dydxapp.DefaultNodeHome
+	}
+	defer os.RemoveAll(dir)
+
+	return dir
+}
diff --git a/protocol/cmd/dydxprotocold/main.go b/protocol/cmd/dydxprotocold/main.go
index a17b70d60dc..76cc794aa34 100644
--- a/protocol/cmd/dydxprotocold/main.go
+++ b/protocol/cmd/dydxprotocold/main.go
@@ -14,7 +14,7 @@ func main() {
 	config.SetupConfig()
 
 	option := cmd.GetOptionWithCustomStartCmd()
-	rootCmd := cmd.NewRootCmd(option, app.DefaultNodeHome)
+	rootCmd := cmd.NewRootCmd(option)
 
 	cmd.AddTendermintSubcommands(rootCmd)
 	cmd.AddInitCmdPostRunE(rootCmd)