diff --git a/cmd/dummy/main.go b/cmd/dummy/main.go
new file mode 100644
index 0000000..c4cb75f
--- /dev/null
+++ b/cmd/dummy/main.go
@@ -0,0 +1,78 @@
+package main
+
+import (
+	"errors"
+	"flag"
+	"fmt"
+	"log"
+	"net"
+	"os"
+	"os/signal"
+	"syscall"
+
+	"google.golang.org/grpc"
+
+	grpcproxy "github.com/rollkit/go-execution/proxy/grpc"
+	"github.com/rollkit/go-execution/test"
+	pb "github.com/rollkit/go-execution/types/pb/execution"
+)
+
+func main() {
+	listenAddress, err := parseListenAddress()
+	if err != nil {
+		log.Fatalf("Failed to parse listen address: %v\n", err)
+	}
+	listener, err := net.Listen("tcp4", listenAddress)
+	if err != nil {
+		log.Fatalf("Failed to listen on %q: %v\n", listenAddress, err)
+	}
+	defer func() {
+		_ = listener.Close()
+	}()
+
+	log.Println("Creating Dummy Executor and gRPC server")
+	dummy := test.NewDummyExecutor()
+	server := grpcproxy.NewServer(dummy, grpcproxy.DefaultConfig())
+	s := grpc.NewServer()
+	pb.RegisterExecutionServiceServer(s, server)
+
+	// Setup signal handling
+	sigChan := make(chan os.Signal, 1)
+	signal.Notify(sigChan, syscall.SIGINT, syscall.SIGTERM)
+
+	doneChan := make(chan interface{}, 1)
+	go func() {
+		log.Printf("Serving (%s)...\n", listenAddress)
+		log.Println("Type Ctrl+C to shutdown")
+		if err := s.Serve(listener); err != nil && !errors.Is(err, grpc.ErrServerStopped) {
+			log.Fatalf("Server exited with error: %v\n", err)
+		}
+		doneChan <- nil
+	}()
+
+	// Handle shutdown signal
+	go func() {
+		<-sigChan
+		log.Println("Received shutdown signal")
+		s.GracefulStop()
+	}()
+
+	<-doneChan
+	log.Println("Server stopped")
+}
+
+func parseListenAddress() (string, error) {
+	var listenAddress string
+	flag.StringVar(&listenAddress, "address", "127.0.0.1:40041", "gRPC server listen address")
+	flag.Parse()
+
+	_, port, err := net.SplitHostPort(listenAddress)
+	if err != nil {
+		return "", fmt.Errorf("invalid address format %q: %v", listenAddress, err)
+	}
+	if port == "" {
+		return "", errors.New("port cannot be empty")
+	}
+
+	return listenAddress, nil
+}
diff --git a/test/dummy.go b/test/dummy.go
index bac37a4..93be076 100644
--- a/test/dummy.go
+++ b/test/dummy.go
@@ -2,6 +2,8 @@ package test
 
 import (
 	"context"
+	"crypto/sha512"
+	"fmt"
 	"time"
 
 	"github.com/rollkit/go-execution/types"
@@ -9,38 +11,60 @@ import (
 
 // DummyExecutor is a dummy implementation of the DummyExecutor interface for testing
 type DummyExecutor struct {
-	stateRoot types.Hash
-	maxBytes  uint64
-	txs       []types.Tx
+	stateRoot    types.Hash
+	pendingRoots map[uint64]types.Hash
+	maxBytes     uint64
+	injectedTxs  []types.Tx
 }
 
 // NewDummyExecutor creates a new dummy DummyExecutor instance
 func NewDummyExecutor() *DummyExecutor {
 	return &DummyExecutor{
-		stateRoot: types.Hash{1, 2, 3},
-		maxBytes:  1000000,
-		txs:       make([]types.Tx, 0),
+		stateRoot:    types.Hash{1, 2, 3},
+		pendingRoots: make(map[uint64]types.Hash),
+		maxBytes:     1000000,
 	}
 }
 
 // InitChain initializes the chain state with the given genesis time, initial height, and chain ID.
 // It returns the state root hash, the maximum byte size, and an error if the initialization fails.
 func (e *DummyExecutor) InitChain(ctx context.Context, genesisTime time.Time, initialHeight uint64, chainID string) (types.Hash, uint64, error) {
+	hash := sha512.New()
+	hash.Write(e.stateRoot)
+	e.stateRoot = hash.Sum(nil)
 	return e.stateRoot, e.maxBytes, nil
 }
 
 // GetTxs returns the list of transactions (types.Tx) within the DummyExecutor instance and an error if any.
 func (e *DummyExecutor) GetTxs(context.Context) ([]types.Tx, error) {
-	return e.txs, nil
+	txs := e.injectedTxs
+	e.injectedTxs = nil
+	return txs, nil
+}
+
+// InjectTx adds a transaction to the internal list of injected transactions in the DummyExecutor instance.
+func (e *DummyExecutor) InjectTx(tx types.Tx) {
+	e.injectedTxs = append(e.injectedTxs, tx)
 }
 
 // ExecuteTxs simulate execution of transactions.
 func (e *DummyExecutor) ExecuteTxs(ctx context.Context, txs []types.Tx, blockHeight uint64, timestamp time.Time, prevStateRoot types.Hash) (types.Hash, uint64, error) {
-	e.txs = append(e.txs, txs...)
-	return e.stateRoot, e.maxBytes, nil
+	hash := sha512.New()
+	hash.Write(prevStateRoot)
+	for _, tx := range txs {
+		hash.Write(tx)
+	}
+	pending := hash.Sum(nil)
+	e.pendingRoots[blockHeight] = pending
+	return pending, e.maxBytes, nil
 }
 
-// SetFinal marks block at given height as finalized. Currently not implemented.
+// SetFinal marks block at given height as finalized.
 func (e *DummyExecutor) SetFinal(ctx context.Context, blockHeight uint64) error {
-	return nil
+	if pending, ok := e.pendingRoots[blockHeight]; ok {
+		e.stateRoot = pending
+		delete(e.pendingRoots, blockHeight)
+		return nil
+	}
+	return fmt.Errorf("cannot set finalized block at height %d", blockHeight)
 }
diff --git a/test/suite.go b/test/suite.go
index c0536fb..28574db 100644
--- a/test/suite.go
+++ b/test/suite.go
@@ -32,7 +32,7 @@ func (s *ExecutorSuite) TestInitChain() {
 func (s *ExecutorSuite) TestGetTxs() {
 	txs, err := s.Exec.GetTxs(context.TODO())
 	s.Require().NoError(err)
-	s.NotNil(txs)
+	s.Empty(txs)
 }
 
 // TestExecuteTxs tests ExecuteTxs method.
@@ -50,6 +50,12 @@ func (s *ExecutorSuite) TestExecuteTxs() {
 
 // TestSetFinal tests SetFinal method.
 func (s *ExecutorSuite) TestSetFinal() {
+	// finalizing invalid height must return error
 	err := s.Exec.SetFinal(context.TODO(), 1)
+	s.Require().Error(err)
+
+	_, _, err = s.Exec.ExecuteTxs(context.TODO(), nil, 2, time.Now(), types.Hash("test state"))
+	s.Require().NoError(err)
+	err = s.Exec.SetFinal(context.TODO(), 2)
 	s.Require().NoError(err)
 }