diff --git a/cmd/gossamer/config.go b/cmd/gossamer/config.go
index 0784c515da..f055a1db44 100644
--- a/cmd/gossamer/config.go
+++ b/cmd/gossamer/config.go
@@ -21,7 +21,6 @@ import (
 	"strconv"
 	"strings"
 
-	"github.com/ChainSafe/chaindb"
 	"github.com/ChainSafe/gossamer/chain/gssmr"
 	"github.com/ChainSafe/gossamer/dot"
 	ctoml "github.com/ChainSafe/gossamer/dot/config/toml"
@@ -788,9 +787,7 @@ func updateDotConfigFromGenesisJSONRaw(tomlCfg ctoml.Config, cfg *dot.Config) {
 // updateDotConfigFromGenesisData updates the configuration from genesis data of an initialised node
 func updateDotConfigFromGenesisData(ctx *cli.Context, cfg *dot.Config) error {
 	// initialise database using data directory
-	db, err := chaindb.NewBadgerDB(&chaindb.Config{
-		DataDir: cfg.Global.BasePath,
-	})
+	db, err := utils.SetupDatabase(cfg.Global.BasePath, false)
 	if err != nil {
 		return fmt.Errorf("failed to create database: %s", err)
 	}
diff --git a/cmd/gossamer/config_test.go b/cmd/gossamer/config_test.go
index 43726b84b8..2f2a3368de 100644
--- a/cmd/gossamer/config_test.go
+++ b/cmd/gossamer/config_test.go
@@ -27,7 +27,6 @@ import (
 	"github.com/ChainSafe/gossamer/lib/genesis"
 	"github.com/ChainSafe/gossamer/lib/utils"
 
-	"github.com/ChainSafe/chaindb"
 	log "github.com/ChainSafe/log15"
 	"github.com/stretchr/testify/require"
 	"github.com/urfave/cli"
@@ -816,9 +815,7 @@ func TestUpdateConfigFromGenesisData(t *testing.T) {
 
 	cfg.Init.Genesis = genFile.Name()
 
-	db, err := chaindb.NewBadgerDB(&chaindb.Config{
-		DataDir: cfg.Global.BasePath,
-	})
+	db, err := utils.SetupDatabase(cfg.Global.BasePath, false)
 	require.Nil(t, err)
 
 	gen, err := genesis.NewGenesisFromJSONRaw(genFile.Name())
diff --git a/dot/node.go b/dot/node.go
index 53e11a5c9a..59444d47e5 100644
--- a/dot/node.go
+++ b/dot/node.go
@@ -28,7 +28,6 @@ import (
 	"syscall"
 	"time"
 
-	"github.com/ChainSafe/chaindb"
 	gssmrmetrics "github.com/ChainSafe/gossamer/dot/metrics"
 	"github.com/ChainSafe/gossamer/dot/network"
 	"github.com/ChainSafe/gossamer/dot/state"
@@ -37,6 +36,7 @@ import (
 	"github.com/ChainSafe/gossamer/lib/genesis"
 	"github.com/ChainSafe/gossamer/lib/keystore"
 	"github.com/ChainSafe/gossamer/lib/services"
+	"github.com/ChainSafe/gossamer/lib/utils"
 	log "github.com/ChainSafe/log15"
 	"github.com/ethereum/go-ethereum/metrics"
 	"github.com/ethereum/go-ethereum/metrics/prometheus"
@@ -121,7 +121,7 @@ func InitNode(cfg *Config) error {
 // node, the state database has been created and the genesis data has been loaded
 func NodeInitialized(basepath string, expected bool) bool {
 	// check if key registry exists
-	registry := path.Join(basepath, "KEYREGISTRY")
+	registry := path.Join(basepath, utils.DefaultDatabaseDir, "KEYREGISTRY")
 
 	_, err := os.Stat(registry)
 	if os.IsNotExist(err) {
@@ -136,9 +136,7 @@ func NodeInitialized(basepath string, expected bool) bool {
 	}
 
 	// initialise database using data directory
-	db, err := chaindb.NewBadgerDB(&chaindb.Config{
-		DataDir: basepath,
-	})
+	db, err := utils.SetupDatabase(basepath, false)
 	if err != nil {
 		logger.Error(
 			"failed to create database",
@@ -173,7 +171,7 @@ func NodeInitialized(basepath string, expected bool) bool {
 // LoadGlobalNodeName returns the stored global node name from database
 func LoadGlobalNodeName(basepath string) (nodename string, err error) {
 	// initialise database using data directory
-	db, err := state.SetupDatabase(basepath)
+	db, err := utils.SetupDatabase(basepath, false)
 	if err != nil {
 		return "", err
 	}
@@ -390,7 +388,7 @@ func setupMetricsServer(address string) {
 
 // stores the global node name to reuse
 func storeGlobalNodeName(name, basepath string) (err error) {
-	db, err := state.SetupDatabase(basepath)
+	db, err := utils.SetupDatabase(basepath, false)
 	if err != nil {
 		return err
 	}
diff --git a/dot/services.go b/dot/services.go
index e74e073e81..8f8092720c 100644
--- a/dot/services.go
+++ b/dot/services.go
@@ -41,13 +41,11 @@ import (
 	"github.com/ChainSafe/gossamer/lib/runtime/life"
 	"github.com/ChainSafe/gossamer/lib/runtime/wasmer"
 	"github.com/ChainSafe/gossamer/lib/runtime/wasmtime"
+	"github.com/ChainSafe/gossamer/lib/utils"
 )
 
 func newInMemoryDB(path string) (chaindb.Database, error) {
-	return chaindb.NewBadgerDB(&chaindb.Config{
-		DataDir:  filepath.Join(path, "local_storage"),
-		InMemory: true,
-	})
+	return utils.SetupDatabase(filepath.Join(path, "local_storage"), true)
 }
 
 // State Service
diff --git a/dot/state/base.go b/dot/state/base.go
index 0d0ff47e81..f66d462096 100644
--- a/dot/state/base.go
+++ b/dot/state/base.go
@@ -27,13 +27,6 @@ import (
 	"github.com/ChainSafe/chaindb"
 )
 
-// SetupDatabase will return an instance of database based on basepath
-func SetupDatabase(basepath string) (chaindb.Database, error) {
-	return chaindb.NewBadgerDB(&chaindb.Config{
-		DataDir: basepath,
-	})
-}
-
 // BaseState is a wrapper for the chaindb.Database, without any prefixes
 type BaseState struct {
 	db chaindb.Database
diff --git a/dot/state/initialize.go b/dot/state/initialize.go
index c1e73cedc1..11185a7862 100644
--- a/dot/state/initialize.go
+++ b/dot/state/initialize.go
@@ -28,6 +28,7 @@ import (
 	rtstorage "github.com/ChainSafe/gossamer/lib/runtime/storage"
 	"github.com/ChainSafe/gossamer/lib/runtime/wasmer"
 	"github.com/ChainSafe/gossamer/lib/trie"
+	"github.com/ChainSafe/gossamer/lib/utils"
 
 	"github.com/ChainSafe/chaindb"
 )
@@ -35,27 +36,18 @@ import (
 // Initialise initialises the genesis state of the DB using the given storage trie. The trie should be loaded with the genesis storage state.
 // This only needs to be called during genesis initialisation of the node; it is not called during normal startup.
 func (s *Service) Initialise(gen *genesis.Genesis, header *types.Header, t *trie.Trie) error {
-	var db chaindb.Database
-	cfg := &chaindb.Config{}
-
-	// check database type
-	if s.isMemDB {
-		cfg.InMemory = true
-	}
-
 	// get data directory from service
 	basepath, err := filepath.Abs(s.dbPath)
 	if err != nil {
 		return fmt.Errorf("failed to read basepath: %s", err)
 	}
 
-	cfg.DataDir = basepath
-
 	// initialise database using data directory
-	db, err = chaindb.NewBadgerDB(cfg)
+	db, err := utils.SetupDatabase(basepath, s.isMemDB)
 	if err != nil {
 		return fmt.Errorf("failed to create database: %s", err)
 	}
+
 	s.db = db
 
 	if err = db.ClearAll(); err != nil {
@@ -119,9 +111,6 @@ func (s *Service) Initialise(gen *genesis.Genesis, header *types.Header, t *trie
 
 	// check database type
 	if s.isMemDB {
-		// append memory database to state service
-		s.db = db
-
 		// append storage state and block state to state service
 		s.Storage = storageState
 		s.Block = blockState
diff --git a/dot/state/service.go b/dot/state/service.go
index 1c378c879e..dc3788d9bd 100644
--- a/dot/state/service.go
+++ b/dot/state/service.go
@@ -26,6 +26,7 @@ import (
 	"github.com/ChainSafe/gossamer/dot/types"
 	"github.com/ChainSafe/gossamer/lib/blocktree"
 	"github.com/ChainSafe/gossamer/lib/trie"
+	"github.com/ChainSafe/gossamer/lib/utils"
 
 	"github.com/ChainSafe/chaindb"
 	log "github.com/ChainSafe/log15"
@@ -88,18 +89,15 @@ func (s *Service) Start() error {
 	}
 
 	db := s.db
+
 	if !s.isMemDB {
 		basepath, err := filepath.Abs(s.dbPath)
 		if err != nil {
 			return err
 		}
 
-		cfg := &chaindb.Config{
-			DataDir: basepath,
-		}
-
 		// initialise database
-		db, err = chaindb.NewBadgerDB(cfg)
+		db, err = utils.SetupDatabase(basepath, false)
 		if err != nil {
 			return err
 		}
@@ -297,17 +295,9 @@ func (s *Service) Stop() error {
 // Import imports the given state corresponding to the given header and sets the head of the chain
 // to it. Additionally, it uses the first slot to correctly set the epoch number of the block.
 func (s *Service) Import(header *types.Header, t *trie.Trie, firstSlot uint64) error {
-	cfg := &chaindb.Config{
-		DataDir: s.dbPath,
-	}
-
-	if s.isMemDB {
-		cfg.InMemory = true
-	}
-
 	var err error
 	// initialise database using data directory
-	s.db, err = chaindb.NewBadgerDB(cfg)
+	s.db, err = utils.SetupDatabase(s.dbPath, s.isMemDB)
 	if err != nil {
 		return fmt.Errorf("failed to create database: %s", err)
 	}
diff --git a/dot/state/test_helpers.go b/dot/state/test_helpers.go
index cbb2e5c4af..f75faa3e0a 100644
--- a/dot/state/test_helpers.go
+++ b/dot/state/test_helpers.go
@@ -29,6 +29,7 @@ import (
 	"github.com/ChainSafe/gossamer/lib/common"
 	runtime "github.com/ChainSafe/gossamer/lib/runtime/storage"
 	"github.com/ChainSafe/gossamer/lib/trie"
+	"github.com/ChainSafe/gossamer/lib/utils"
 
 	"github.com/stretchr/testify/require"
 )
@@ -40,10 +41,7 @@ func NewInMemoryDB(t *testing.T) chaindb.Database {
 	testDatadirPath, err := ioutil.TempDir("/tmp", "test-datadir-*")
 	require.NoError(t, err)
 
-	db, err := chaindb.NewBadgerDB(&chaindb.Config{
-		DataDir:  testDatadirPath,
-		InMemory: true,
-	})
+	db, err := utils.SetupDatabase(testDatadirPath, true)
 	require.NoError(t, err)
 	t.Cleanup(func() {
 		_ = db.Close()
diff --git a/lib/blocktree/database_test.go b/lib/blocktree/database_test.go
index efeee2ae9f..0f7804e14f 100644
--- a/lib/blocktree/database_test.go
+++ b/lib/blocktree/database_test.go
@@ -92,10 +92,7 @@ func newInMemoryDB(t *testing.T) chaindb.Database {
 	testDatadirPath, err := ioutil.TempDir("/tmp", "test-datadir-*")
 	require.NoError(t, err)
 
-	db, err := chaindb.NewBadgerDB(&chaindb.Config{
-		DataDir:  testDatadirPath,
-		InMemory: true,
-	})
+	db, err := utils.SetupDatabase(testDatadirPath, true)
 	require.NoError(t, err)
 	t.Cleanup(func() {
 		db.Close()
diff --git a/lib/grandpa/grandpa_test.go b/lib/grandpa/grandpa_test.go
index 6d79c53ce8..511515d687 100644
--- a/lib/grandpa/grandpa_test.go
+++ b/lib/grandpa/grandpa_test.go
@@ -30,8 +30,8 @@ import (
 	"github.com/ChainSafe/gossamer/lib/crypto/ed25519"
 	"github.com/ChainSafe/gossamer/lib/keystore"
 	"github.com/ChainSafe/gossamer/lib/trie"
+	"github.com/ChainSafe/gossamer/lib/utils"
 
-	"github.com/ChainSafe/chaindb"
 	"github.com/stretchr/testify/require"
 )
 
@@ -56,12 +56,7 @@ func newTestState(t *testing.T) *state.Service {
 	testDatadirPath, err := ioutil.TempDir("/tmp", "test-datadir-*")
 	require.NoError(t, err)
 
-	cfg := &chaindb.Config{
-		DataDir:  testDatadirPath,
-		InMemory: true,
-	}
-
-	db, err := chaindb.NewBadgerDB(cfg)
+	db, err := utils.SetupDatabase(testDatadirPath, true)
 	require.NoError(t, err)
 
 	block, err := state.NewBlockStateFromGenesis(db, testGenesisHeader)
diff --git a/lib/trie/database_test.go b/lib/trie/database_test.go
index 4e8fc12aed..ecda191550 100644
--- a/lib/trie/database_test.go
+++ b/lib/trie/database_test.go
@@ -23,6 +23,7 @@ import (
 	"testing"
 
 	"github.com/ChainSafe/chaindb"
+	"github.com/ChainSafe/gossamer/lib/utils"
 	"github.com/stretchr/testify/require"
 )
 
@@ -30,13 +31,8 @@ func newTestDB(t *testing.T) chaindb.Database {
 	// TODO: dynamically get os.TMPDIR
 	testDatadirPath, _ := ioutil.TempDir("/tmp", "test-datadir-*")
 
-	cfg := &chaindb.Config{
-		DataDir:  testDatadirPath,
-		InMemory: true,
-	}
-
 	// TODO: don't initialise new DB but pass it in
-	db, err := chaindb.NewBadgerDB(cfg)
+	db, err := utils.SetupDatabase(testDatadirPath, true)
 	require.NoError(t, err)
 	return chaindb.NewTable(db, "trie")
 }
diff --git a/lib/utils/utils.go b/lib/utils/utils.go
index f2e22e9f06..93127e64e4 100644
--- a/lib/utils/utils.go
+++ b/lib/utils/utils.go
@@ -30,6 +30,17 @@ import (
 	"github.com/dgraph-io/badger/v2"
 )
 
+// DefaultDatabaseDir directory inside basepath where database contents are stored
+const DefaultDatabaseDir = "db"
+
+// SetupDatabase will return an instance of database based on basepath
+func SetupDatabase(basepath string, inMemory bool) (chaindb.Database, error) {
+	return chaindb.NewBadgerDB(&chaindb.Config{
+		DataDir:  filepath.Join(basepath, DefaultDatabaseDir),
+		InMemory: inMemory,
+	})
+}
+
 // PathExists returns true if the named file or directory exists, otherwise false
 func PathExists(p string) bool {
 	if _, err := os.Stat(p); err != nil {