diff --git a/Makefile b/Makefile
index 39440f534..39eb36b52 100644
--- a/Makefile
+++ b/Makefile
@@ -94,10 +94,10 @@ TEST_PATTERN ?= /
 # The endpoints tested may be limited by supplying a test pattern in the form "/endpoint_1|enpoint_2|..|enpoint_n"
 # For example, to run the rpc-compat suites for eth_chainId & eth_blockNumber you should run:
 # `make run-hive SIMULATION=ethereum/rpc-compat TEST_PATTERN="/eth_chainId|eth_blockNumber"`
-run-hive: build-image setup-hive ## 🧪 Run Hive testing suite
+run-hive: build-image ## 🧪 Run Hive testing suite
 	cd hive && ./hive --sim $(SIMULATION) --client ethereumrust --sim.limit "$(TEST_PATTERN)"
 
-run-hive-debug: build-image setup-hive ## 🐞 Run Hive testing suite in debug mode
+run-hive-debug: build-image ## 🐞 Run Hive testing suite in debug mode
 	cd hive && ./hive --sim $(SIMULATION) --client ethereumrust --sim.limit "$(TEST_PATTERN)" --docker.output
 
 clean-hive-logs: ## 🧹 Clean Hive logs
diff --git a/crates/l2/Makefile b/crates/l2/Makefile
index 3fe872317..23914ec55 100644
--- a/crates/l2/Makefile
+++ b/crates/l2/Makefile
@@ -13,7 +13,7 @@ down: down-local-l1 down-l2 ## 🛑 Shuts down the localnet
 
 clean: clean-contract-deps ## 🧹 Cleans the localnet
 
-restart: restart-local-l1 restart-contract-deps deploy-l1 restart-l2 ## 🔄 Restarts the localnet
+restart: restart-local-l1 deploy-l1 restart-l2 ## 🔄 Restarts the localnet
 
 cli: ## 🛠️ Installs the L2 Lambda Ethereum Rust CLI
 	cargo install --path ${ETHEREUM_RUST_PATH}/cmd/ethereum_rust_l2/ --force
diff --git a/crates/vm/levm/.gitignore b/crates/vm/levm/.gitignore
index 335ec9573..adb63666b 100644
--- a/crates/vm/levm/.gitignore
+++ b/crates/vm/levm/.gitignore
@@ -1 +1,3 @@
 *.tar.gz
+
+tests/ef_testcases
diff --git a/crates/vm/levm/src/constants.rs b/crates/vm/levm/src/constants.rs
index c2f8ae1b7..c38f3f429 100644
--- a/crates/vm/levm/src/constants.rs
+++ b/crates/vm/levm/src/constants.rs
@@ -115,6 +115,8 @@ pub const TX_BASE_COST: U256 = U256([21000, 0, 0, 0]);
 pub const MAX_CODE_SIZE: usize = 0x6000;
 pub const MAX_CREATE_CODE_SIZE: usize = 2 * MAX_CODE_SIZE;
 
+pub const INVALID_CONTRACT_PREFIX: u8 = 0xef;
+
 // Costs in gas for init word and init code (in wei)
 pub const INIT_WORD_COST: i64 = 2;
 
diff --git a/crates/vm/levm/src/errors.rs b/crates/vm/levm/src/errors.rs
index 12c107da1..c3f372276 100644
--- a/crates/vm/levm/src/errors.rs
+++ b/crates/vm/levm/src/errors.rs
@@ -22,10 +22,14 @@ pub enum VMError {
     MissingBlobHashes,
     BlobHashIndexOutOfBounds,
     RevertOpcode,
-    SenderAccountDoesNotExist,
+    AddressDoesNotMatchAnAccount,
     SenderAccountShouldNotHaveBytecode,
     SenderBalanceShouldContainTransferValue,
     GasPriceIsLowerThanBaseFee,
+    AddressAlreadyOccupied,
+    ContractOutputTooBig,
+    InvalidInitialByte,
+    NonceOverflow,
 }
 
 pub enum OpcodeSuccess {
diff --git a/crates/vm/levm/src/utils.rs b/crates/vm/levm/src/utils.rs
index 599b3efea..c80aa682a 100644
--- a/crates/vm/levm/src/utils.rs
+++ b/crates/vm/levm/src/utils.rs
@@ -46,7 +46,7 @@ pub fn new_vm_with_ops_addr_bal(bytecode: Bytes, address: Address, balance: U256
         ),
     ];
 
-    let state = Db {
+    let mut state = Db {
         accounts: accounts.into(),
         block_hashes: Default::default(),
     };
@@ -56,7 +56,7 @@ pub fn new_vm_with_ops_addr_bal(bytecode: Bytes, address: Address, balance: U256
     // add the account passed by parameter
 
     VM::new(
-        Address::from_low_u64_be(42),
+        Some(Address::from_low_u64_be(42)),
         address,
         Default::default(),
         Default::default(),
@@ -68,9 +68,12 @@ pub fn new_vm_with_ops_addr_bal(bytecode: Bytes, address: Address, balance: U256
         U256::one(),
         Default::default(),
         Default::default(),
-        state,
+        &mut state,
         Default::default(),
         Default::default(),
         Default::default(),
+        Default::default(),
+        None,
     )
+    .unwrap()
 }
diff --git a/crates/vm/levm/src/vm.rs b/crates/vm/levm/src/vm.rs
index ae305f6d9..952e1ba5a 100644
--- a/crates/vm/levm/src/vm.rs
+++ b/crates/vm/levm/src/vm.rs
@@ -201,9 +201,8 @@ pub fn word_to_address(word: U256) -> Address {
 }
 
 impl VM {
-    // TODO: Refactor this.
     #[allow(clippy::too_many_arguments)]
-    pub fn new(
+    fn call_type_transaction(
         to: Address,
         msg_sender: Address,
         value: U256,
@@ -220,23 +219,13 @@ impl VM {
         block_blob_gas_used: Option<U256>,
         block_excess_blob_gas: Option<U256>,
         tx_blob_hashes: Option<Vec<H256>>,
-    ) -> Self {
-        // TODO: This handles only CALL transactions.
+    ) -> Result<VM, VMError> {
         let bytecode = db.get_account_bytecode(&to);
 
-        // TODO: This handles only CALL transactions.
-        // TODO: Remove this allow when CREATE is implemented.
-        #[allow(clippy::redundant_locals)]
-        let to = to;
-
-        // TODO: In CALL this is the `to`, in CREATE it is not.
-        let code_addr = to;
-
-        // TODO: this is mostly placeholder
         let initial_call_frame = CallFrame::new(
             msg_sender,
             to,
-            code_addr,
+            to,
             None,
             bytecode,
             value,
@@ -264,11 +253,204 @@ impl VM {
             tx_blob_hashes,
         };
 
-        Self {
+        Ok(VM {
             call_frames: vec![initial_call_frame],
             db,
             env,
             accrued_substate: Substate::default(),
+        })
+    }
+
+    // Functionality should be:
+    // (1) Check whether caller has enough balance to make a transfer
+    // (2) Derive the new contract’s address from the caller’s address (passing in the creator account’s nonce)
+    // (3) Create the new contract account using the derived contract address (changing the “world state” StateDB)
+    // (4) Transfer the initial Ether endowment from caller to the new contract
+    // (5) Set input data as contract’s deploy code, then execute it with EVM. The ret variable is the returned contract code
+    // (6) Check for error. Or if the contract code is too big, fail. Charge the user gas then set the contract code
+    // Source: https://medium.com/@hayeah/diving-into-the-ethereum-vm-part-5-the-smart-contract-creation-process-cb7b6133b855
+    #[allow(clippy::too_many_arguments)]
+    fn create_type_transaction(
+        sender: Address,
+        secret_key: H256,
+        db: &mut Db,
+        value: U256,
+        calldata: Bytes,
+        block_number: U256,
+        coinbase: Address,
+        timestamp: U256,
+        prev_randao: Option<H256>,
+        chain_id: U256,
+        base_fee_per_gas: U256,
+        gas_price: U256,
+        block_blob_gas_used: Option<U256>,
+        block_excess_blob_gas: Option<U256>,
+        tx_blob_hashes: Option<Vec<H256>>,
+        salt: Option<U256>,
+    ) -> Result<VM, VMError> {
+        let mut db_copy = db.clone();
+        let mut sender_account = match db_copy.accounts.get(&sender) {
+            Some(acc) => acc,
+            None => {
+                return Err(VMError::OutOfGas);
+            }
+        }
+        .clone();
+
+        // (1)
+        if sender_account.balance < value {
+            return Err(VMError::OutOfGas); // Maybe a more personalized error
+        }
+
+        sender_account.nonce = sender_account
+            .nonce
+            .checked_add(1)
+            .ok_or(VMError::NonceOverflow)?;
+
+        // (2)
+        let new_contract_address = match salt {
+            Some(salt) => VM::calculate_create2_address(sender, &calldata, salt),
+            None => VM::calculate_create_address(sender, sender_account.nonce),
+        };
+
+        // If address is already in db, there's an error
+        if db_copy.accounts.contains_key(&new_contract_address) {
+            return Err(VMError::AddressAlreadyOccupied);
+        }
+
+        // (3)
+        let mut created_contract = Account::new(
+            new_contract_address,
+            value,
+            calldata.clone(),
+            1,
+            Default::default(),
+        );
+        db_copy.add_account(new_contract_address, created_contract.clone());
+
+        // (4)
+        sender_account.balance -= value;
+        created_contract.balance += value;
+
+        // (5)
+        let code: Bytes = calldata.clone();
+
+        // Call the contract
+        let mut vm = VM::new(
+            Some(created_contract.address),
+            sender,
+            value,
+            code,
+            sender_account.balance,
+            block_number,
+            coinbase,
+            timestamp,
+            prev_randao,
+            chain_id,
+            base_fee_per_gas,
+            gas_price,
+            &mut db_copy,
+            block_blob_gas_used,
+            block_excess_blob_gas,
+            tx_blob_hashes,
+            secret_key,
+            None,
+        )?;
+
+        let res = vm.transact()?;
+        // Don't use a revert bc work with clones, so don't have to save previous state
+
+        let contract_code = res.output;
+
+        // (6)
+        if contract_code.len() > MAX_CODE_SIZE {
+            return Err(VMError::ContractOutputTooBig);
+        }
+        // Supposing contract code has contents
+        if contract_code[0] == INVALID_CONTRACT_PREFIX {
+            return Err(VMError::InvalidInitialByte);
+        }
+
+        // If the initialization code completes successfully, a final contract-creation cost is paid,
+        // the code-deposit cost, c, proportional to the size of the created contract’s code
+        let creation_cost = 200 * contract_code.len();
+
+        sender_account.balance = sender_account
+            .balance
+            .checked_sub(U256::from(creation_cost))
+            .ok_or(VMError::OutOfGas)?;
+
+        created_contract.bytecode = contract_code;
+
+        let mut acc = db_copy.accounts.get_mut(&sender).unwrap();
+        *acc = sender_account;
+        acc = db_copy.accounts.get_mut(&new_contract_address).unwrap();
+        *acc = created_contract;
+
+        *db = db_copy;
+        Ok(vm)
+    }
+
+    // TODO: Refactor this.
+    #[allow(clippy::too_many_arguments)]
+    pub fn new(
+        to: Option<Address>,
+        msg_sender: Address,
+        value: U256,
+        calldata: Bytes,
+        gas_limit: U256,
+        block_number: U256,
+        coinbase: Address,
+        timestamp: U256,
+        prev_randao: Option<H256>,
+        chain_id: U256,
+        base_fee_per_gas: U256,
+        gas_price: U256,
+        db: &mut Db,
+        block_blob_gas_used: Option<U256>,
+        block_excess_blob_gas: Option<U256>,
+        tx_blob_hashes: Option<Vec<H256>>,
+        secret_key: H256,
+        salt: Option<U256>,
+    ) -> Result<Self, VMError> {
+        // Maybe this desicion should be made in an upper layer
+        match to {
+            Some(address) => VM::call_type_transaction(
+                address,
+                msg_sender,
+                value,
+                calldata,
+                gas_limit,
+                block_number,
+                coinbase,
+                timestamp,
+                prev_randao,
+                chain_id,
+                base_fee_per_gas,
+                gas_price,
+                db.clone(),
+                block_blob_gas_used,
+                block_excess_blob_gas,
+                tx_blob_hashes,
+            ),
+            None => VM::create_type_transaction(
+                msg_sender,
+                secret_key,
+                db,
+                value,
+                calldata,
+                block_number,
+                coinbase,
+                timestamp,
+                prev_randao,
+                chain_id,
+                base_fee_per_gas,
+                gas_price,
+                block_blob_gas_used,
+                block_excess_blob_gas,
+                tx_blob_hashes,
+                salt,
+            ),
         }
     }
 
@@ -415,7 +597,6 @@ impl VM {
         }
     }
 
-    // let account = self.db.accounts.get(&self.env.origin).unwrap();
     /// Based on Ethereum yellow paper's initial tests of intrinsic validity (Section 6). The last version is
     /// Shanghai, so there are probably missing Cancun validations. The intrinsic validations are:
     ///
@@ -437,7 +618,9 @@ impl VM {
         // Validations (1), (2), (3), (5), and (8) are assumed done in upper layers.
         let sender_account = match self.db.accounts.get(&self.env.origin) {
             Some(acc) => acc,
-            None => return Err(VMError::SenderAccountDoesNotExist),
+            None => return Err(VMError::AddressDoesNotMatchAnAccount),
+            // This is a check for completeness. However if it were a none and
+            // it was not caught it would be caught in clause 6.
         };
         // (4)
         if sender_account.has_code() {
diff --git a/crates/vm/levm/tests/tests.rs b/crates/vm/levm/tests/tests.rs
index 7aedbc923..fa22aad1d 100644
--- a/crates/vm/levm/tests/tests.rs
+++ b/crates/vm/levm/tests/tests.rs
@@ -3845,7 +3845,7 @@ fn caller_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         caller,
         Default::default(),
         Default::default(),
@@ -3857,11 +3857,14 @@ fn caller_op() {
         Default::default(),
         Default::default(),
         Default::default(),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);
@@ -3887,7 +3890,7 @@ fn origin_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         msg_sender,
         Default::default(),
         Default::default(),
@@ -3899,11 +3902,14 @@ fn origin_op() {
         Default::default(),
         Default::default(),
         Default::default(),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);
@@ -3953,7 +3959,7 @@ fn address_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         Default::default(),
         Default::default(),
         Default::default(),
@@ -3965,11 +3971,14 @@ fn address_op() {
         Default::default(),
         Default::default(),
         Default::default(),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);
@@ -3997,7 +4006,7 @@ fn selfbalance_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         Default::default(),
         Default::default(),
         Default::default(),
@@ -4009,11 +4018,14 @@ fn selfbalance_op() {
         Default::default(),
         Default::default(),
         Default::default(),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);
@@ -4037,7 +4049,7 @@ fn callvalue_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         Default::default(),
         value,
         Default::default(),
@@ -4049,11 +4061,14 @@ fn callvalue_op() {
         Default::default(),
         Default::default(),
         Default::default(),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);
@@ -4076,7 +4091,7 @@ fn codesize_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         Default::default(),
         Default::default(),
         Default::default(),
@@ -4088,11 +4103,14 @@ fn codesize_op() {
         Default::default(),
         Default::default(),
         Default::default(),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);
@@ -4117,7 +4135,7 @@ fn gasprice_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         Default::default(),
         Default::default(),
         Default::default(),
@@ -4129,11 +4147,14 @@ fn gasprice_op() {
         Default::default(),
         Default::default(),
         U256::from(0x9876),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);
@@ -4175,7 +4196,7 @@ fn codecopy_op() {
     );
 
     let mut vm = VM::new(
-        address_that_has_the_code,
+        Some(address_that_has_the_code),
         Default::default(),
         Default::default(),
         Default::default(),
@@ -4187,11 +4208,14 @@ fn codecopy_op() {
         Default::default(),
         Default::default(),
         Default::default(),
-        db,
+        &mut db,
         Default::default(),
         Default::default(),
         Default::default(),
-    );
+        Default::default(),
+        None,
+    )
+    .unwrap();
 
     let mut current_call_frame = vm.call_frames.pop().unwrap();
     vm.execute(&mut current_call_frame);