diff --git a/protocol/cmd/dydxprotocold/cmd/root.go b/protocol/cmd/dydxprotocold/cmd/root.go
index 53eea3c6a5..368ac90b9b 100644
--- a/protocol/cmd/dydxprotocold/cmd/root.go
+++ b/protocol/cmd/dydxprotocold/cmd/root.go
@@ -165,6 +165,10 @@ func NewRootCmdWithInterceptors(
 	if err != nil {
 		panic(err)
 	}
+	// [ Home Dir Temp Fix ] (also see protocol/cmd/dydxprotocold/main.go)
+	// Unset the temp home dir. This must be done after `ReadFromClientConfig`, otherwise it will
+	// create a temp dir in cwd.
+	initClientCtx.HomeDir = ""
 	if err := autoCliOpts(tempApp, initClientCtx).EnhanceRootCommand(rootCmd); err != nil {
 		panic(err)
 	}
diff --git a/protocol/cmd/dydxprotocold/main.go b/protocol/cmd/dydxprotocold/main.go
index a17b70d60d..2ccb4cd382 100644
--- a/protocol/cmd/dydxprotocold/main.go
+++ b/protocol/cmd/dydxprotocold/main.go
@@ -14,7 +14,12 @@ func main() {
 	config.SetupConfig()
 
 	option := cmd.GetOptionWithCustomStartCmd()
-	rootCmd := cmd.NewRootCmd(option, app.DefaultNodeHome)
+	// [ Home Dir Temp Fix ] (also see protocol/cmd/dydxprotocold/cmd/root.go)
+	// We pass in a tempdir as a temporary hack until fixed in cosmos.
+	// If not, and we pass in a custom home dir, it will try read or create the default home dir
+	// before using the custom home dir.
+	// See https://github.com/cosmos/cosmos-sdk/issues/18868.
+	rootCmd := cmd.NewRootCmd(option, tempDir())
 
 	cmd.AddTendermintSubcommands(rootCmd)
 	cmd.AddInitCmdPostRunE(rootCmd)
@@ -23,3 +28,13 @@ func main() {
 		os.Exit(1)
 	}
 }
+
+var tempDir = func() string {
+	dir, err := os.MkdirTemp("", "dydxprotocol")
+	if err != nil {
+		dir = app.DefaultNodeHome
+	}
+	defer os.RemoveAll(dir)
+
+	return dir
+}
diff --git a/protocol/testing/containertest/node.go b/protocol/testing/containertest/node.go
index 7c5a07aecb..cf901e07a9 100644
--- a/protocol/testing/containertest/node.go
+++ b/protocol/testing/containertest/node.go
@@ -3,9 +3,10 @@ package containertest
 import (
 	"context"
 	"fmt"
-	"github.com/dydxprotocol/v4-chain/protocol/app"
 	"time"
 
+	"github.com/dydxprotocol/v4-chain/protocol/app"
+
 	comethttp "github.com/cometbft/cometbft/rpc/client/http"
 	"github.com/cosmos/cosmos-sdk/client"
 	"github.com/cosmos/cosmos-sdk/client/config"