diff --git a/.github/workflows/nix-ci.yml b/.github/workflows/nix-ci.yml
index 75ab837f7..eed2b1907 100644
--- a/.github/workflows/nix-ci.yml
+++ b/.github/workflows/nix-ci.yml
@@ -25,4 +25,4 @@ jobs:
             nix_path: nixpkgs=channel:${{ matrix.os == 'macos-latest' && 'nixpkgs-23.11-darwin' || 'nixos-23.11' }}
 
         - name: Run tests
-          run: nix-shell --run "pytest"
+          run: nix-shell --run "hatch run testing:test"
diff --git a/.github/workflows/pyaleph-ci.yml b/.github/workflows/pyaleph-ci.yml
index e6d5f4ea1..c8dc4dee7 100644
--- a/.github/workflows/pyaleph-ci.yml
+++ b/.github/workflows/pyaleph-ci.yml
@@ -34,11 +34,13 @@ jobs:
       with:
         # Fetch the whole history for all tags and branches (required for aleph.__version__)
         fetch-depth: 0
+
     - name: Set up Python 3.11
       id: setup-python
       uses: actions/setup-python@v2
       with:
         python-version: 3.11
+
     - name: Install latest Rust nightly toolchain
       uses: actions-rs/toolchain@v1
       with:
@@ -49,33 +51,36 @@ jobs:
       id: pip-cache
       run: |
         echo "::set-output name=dir::$(pip cache dir)"
+
+    - name: "install hatch"
+      run: |
+        pip install hatch
+
     - uses: actions/cache@v2
       with:
         path: ${{ steps.pip-cache.outputs.dir }}
         key: ${{ runner.os }}-python-${{ steps.setup-python.outputs.python-version }}-pip-${{ hashFiles('setup.cfg') }}
+
     - name: Install Python dependencies
       run: |
         rustup default nightly  # Required to build some dependencies
         pip install wheel
         pip install --upgrade .[testing]
-    - name: Check types
-      run: |
-        mypy src/
-    - name: Check types in tests
-      run: |
-        mypy tests/
+
     - name: Run unit tests
       run: |
         sudo cp .github/openssl-ci.cnf /etc/ssl/openssl.cnf
         export OPENSSL_CONF=/etc/ssl/openssl.cnf
         touch config.yml  # Fake config file for alembic
         # TODO: determine why ResourceWarning warnings occur in some tests.
-        pytest -Werror -Wignore::ResourceWarning -v --cov .
+        hatch run testing:cov
+
     - name: Upload coverage reports to Codecov
       uses: codecov/codecov-action@v4.0.1
       with:
         token: ${{ secrets.CODECOV_TOKEN }}
         slug: aleph-im/pyaleph
+
   build:
     runs-on: ubuntu-22.04
     needs: tests
diff --git a/README.md b/README.md
index 6cd32356d..5d8ade04b 100644
--- a/README.md
+++ b/README.md
@@ -55,7 +55,7 @@ This will provide you with a shell with PostgreSQL, Redis, and IPFS running.
 To run test you can run:
 
 ```bash
-nix-shell --run "pytest"
+nix-shell --run "hatch run testing:test"
 ```
 
 Or you can run the command in the nix shell:
@@ -63,7 +63,7 @@ Or you can run the command in the nix shell:
 nix-shell
 
 # inside of nix shell
-pytest
+hatch run testing:test
 ```
 
 ## Software used
diff --git a/mypy.ini b/mypy.ini
deleted file mode 100644
index f17126a72..000000000
--- a/mypy.ini
+++ /dev/null
@@ -1,72 +0,0 @@
-# Global options:
-
-[mypy]
-python_version = 3.11
-plugins = sqlalchemy.ext.mypy.plugin
-
-mypy_path = src
-
-exclude = conftest.py
-
-
-show_column_numbers = True
-
-# Suppressing errors
-# Shows errors related to strict None checking, if the global strict_optional flag is enabled
-strict_optional = True
-no_implicit_optional = True
-
-# Import discovery
-# Suppresses error messages about imports that cannot be resolved
-ignore_missing_imports = True
-# Forces import to reference the original source file
-no_implicit_reexport = True
-# show error messages from unrelated files
-follow_imports = silent
-follow_imports_for_stubs = False
-
-
-# Disallow dynamic typing
-# Disallows usage of types that come from unfollowed imports
-disallow_any_unimported = False
-# Disallows all expressions in the module that have type Any
-disallow_any_expr = False
-# Disallows functions that have Any in their signature after decorator transformation.
-disallow_any_decorated = False
-# Disallows explicit Any in type positions such as type annotations and generic type parameters.
-disallow_any_explicit = False
-# Disallows usage of generic types that do not specify explicit type parameters.
-disallow_any_generics = False
-# Disallows subclassing a value of type Any.
-disallow_subclassing_any = False
-
-# Untyped definitions and calls
-# Disallows calling functions without type annotations from functions with type annotations.
-disallow_untyped_calls = False
-# Disallows defining functions without type annotations or with incomplete type annotations
-disallow_untyped_defs = False
-# Disallows defining functions with incomplete type annotations.
-check_untyped_defs = False
-# Type-checks the interior of functions without type annotations.
-disallow_incomplete_defs = False
-# Reports an error whenever a function with type annotations is decorated with a decorator without annotations.
-disallow_untyped_decorators = False
-
-# Prohibit comparisons of non-overlapping types (ex: 42 == "no")
-strict_equality = True
-
-# Configuring warnings
-# Warns about unneeded # type: ignore comments.
-warn_unused_ignores = True
-# Shows errors for missing return statements on some execution paths.
-warn_no_return = True
-# Shows a warning when returning a value with type Any from a function declared with a non- Any return type.
-warn_return_any = False
-
-# Miscellaneous strictness flags
-# Allows variables to be redefined with an arbitrary type, as long as the redefinition is in the same block and nesting level as the original definition.
-allow_redefinition = True
-
-# Ignore the imported code from py-libp2p
-[mypy-aleph.toolkit.libp2p_stubs.*]
-ignore_errors = True
diff --git a/pyproject.toml b/pyproject.toml
new file mode 100644
index 000000000..0f88c4c18
--- /dev/null
+++ b/pyproject.toml
@@ -0,0 +1,309 @@
+[build-system]
+requires = ["hatchling", "hatch-vcs"]
+build-backend = "hatchling.build"
+
+[project]
+name = "pyaleph"
+dynamic = ["version"]
+description = "Reference implementation of Aleph.im next generation network of decentralized big data applications."
+requires-python = ">=3.11,<3.12"
+readme = "README.md"
+license = { file = "LICENSE.txt" }
+authors = [
+    { name = "Moshe Malawach", email = "moshe.malawach@protonmail.com" },
+]
+classifiers = [
+    "Development Status :: 4 - Beta",
+    "Programming Language :: Python",
+]
+dependencies = [
+    "aio_pika==9.1.3",
+    "aiocache==0.12.2",
+    "aiohttp-cors==0.7.0",
+    "aiohttp-jinja2==1.5",
+    "aiohttp==3.8.4",
+    "aioipfs@git+https://github.com/aleph-im/aioipfs.git@d671c79b2871bb4d6c8877ba1e7f3ffbe7d20b71",
+    "alembic==1.12.1",
+    "aleph-message==0.4.2",
+    "aleph-p2p-client@git+https://github.com/aleph-im/p2p-service-client-python@2c04af39c566217f629fd89505ffc3270fba8676",
+    "aleph-pytezos@git+https://github.com/aleph-im/aleph-pytezos.git@32dd1749a4773da494275709060632cbeba9a51b",
+    "asyncpg==0.28.0",
+    "base58>=1.0.3",
+    "coincurve==18.0.0",
+    "configmanager==1.35.1",
+    "configparser==6.0.0",
+    "cosmospy==6.0.0",
+    "dataclasses_json==0.5.6",
+    "eth_account==0.10.0",
+    "eth-typing~=4.0",
+    "gunicorn==21.2.0",
+    "hexbytes==0.2.2",
+    "msgpack==1.0.3", # required by aiocache
+    "multiaddr==0.0.9", # for libp2p-stubs
+    "aleph-nuls2==0.1.0",
+    "orjson>=3.7.7", # Minimum version for Python 3.11
+    "psycopg2-binary==2.9.5", # Note: psycopg3 is not yet supported by SQLAlchemy
+    "pycryptodome==3.17.0", # for libp2p-stubs
+    "pymultihash==0.8.2", # for libp2p-stubs
+    "pynacl==1.5.0",
+    "python-dateutil==2.8.2",
+    "pytz==2023.3",
+    "pyyaml==6.0",
+    "redis[hiredis]==5.0.1",
+    "requests==2.31.0",
+    "secp256k1==0.14.0",
+    "sentry-sdk==1.34.0",
+    "setproctitle==1.3.3",
+    "sqlalchemy[mypy]==1.4.41",
+    "sqlalchemy-utils==0.38.3",
+    "substrate-interface==1.7.4",
+    "ujson==5.1.0",  # required by aiocache
+    "urllib3==2.0.7",
+    "uvloop==0.19.0",
+    "web3==6.11.2",
+    "aiofiles==23.2.1",
+    "types-aiofiles==23.2.0.20240403",
+]
+dependency_links = [
+    "https://github.com/aleph-im/py-libp2p/tarball/0.1.4-1-use-set#egg=libp2p",
+    "https://github.com/aleph-im/aioipfs/tarball/hoh-more-exceptions#egg=aioipfs",
+]
+
+[project.optional-dependencies]
+nuls2 = [
+    "aleph-nuls2==0.1.0",
+    "py-ed25519-bindings==1.0.2; python_version >=\"3.11\"",
+]
+polkadot = [
+    "substrate-interface>=0.9.27",
+]
+cosmos = [
+    "cosmospy",
+]
+docs = [
+    "sphinxcontrib-plantuml",
+]
+
+[tool.hatch.metadata]
+allow-direct-references = true
+
+[project.urls]
+Documentation = "https://aleph.im/"
+Homepage = "https://github.com/aleph-im/pyaleph"
+
+[tool.hatch.version]
+source = "vcs"
+
+[tool.hatch.build.targets.wheel]
+packages = [
+    "alembic.ini",
+    "src/aleph",
+    "pyproject.toml",
+    "AUTHORS.rst",
+    "CHANGELOG.rst",
+    "README.md",
+    "LICENSE.txt",
+    "code-of-conduct.md",
+]
+
+[tool.hatch.build.targets.sdist]
+include = [
+    "alembic.ini",
+    "src/aleph",
+    "pyproject.toml",
+    "AUTHORS.rst",
+    "CHANGELOG.rst",
+    "README.md",
+    "LICENSE.txt",
+    "code-of-conduct.md",
+]
+
+[tool.isort]
+profile = "black"
+
+[tool.hatch.envs.testing]
+features = [
+    "cosmos",
+    "nuls2",
+    "polkadot",
+]
+dependencies = [
+    "ipfshttpclient==0.8.0a2",  # eth/web3 test dependency, for some reason"
+    "more-itertools==8.14.0",
+    "mypy==1.2.0",
+    "pytest",
+    "pytest-cov",
+    "pytest-aiohttp",
+    "pytest-asyncio",
+    "pytest-mock",
+    "types-pytz",
+    "types-redis",
+    "types-requests",
+    "types-setuptools",
+]
+
+# XXX see https://github.com/aleph-im/pyaleph/blob/main/.github/workflows/pyaleph-ci.yml
+[tool.hatch.envs.testing.scripts]
+test = "pytest {args:} ."
+test-cov = "pytest --cov {args:} ."
+cov-report = [
+  "- coverage combine",
+  "coverage report",
+]
+cov = [
+  "test-cov",
+  "cov-report",
+]
+
+[tool.hatch.envs.linting]
+detached = true
+dependencies = [
+    "black==24.2.0",
+    "mypy==1.9.0",
+    "mypy-extensions==1.0.0",
+    "ruff==0.4.8",
+    "isort==5.13.2",
+]
+[tool.hatch.envs.linting.scripts]
+typing = "mypy --config-file=pyproject.toml {args:} ./src/ ./tests/"
+style = [
+    "ruff check {args:.} ./src/ ./tests/",
+    "black --check --diff {args:} ./src/ ./tests/",
+    "isort --check-only --profile black {args:} ./src/ ./tests/",
+]
+fmt = [
+    "black {args:} ./src/ ./tests/",
+    "ruff check --fix {args:.} ./src/ ./tests/",
+    "isort --profile black {args:} ./src/ ./tests/",
+    "style",
+]
+all = [
+    "style",
+    "typing",
+]
+
+[tool.mypy]
+python_version = 3.11
+mypy_path = "src"
+plugins = [
+    "sqlalchemy.ext.mypy.plugin",
+]
+exclude = [
+    "conftest.py"
+]
+show_column_numbers = true
+
+# Import discovery
+# Install types for third-party library stubs (e.g. from typeshed repository)
+install_types = true
+non_interactive = true
+
+# Import discovery
+# Suppresses error messages about imports that cannot be resolved
+ignore_missing_imports = true
+# Forces import to reference the original source file
+no_implicit_reexport = true
+# show error messages from unrelated files
+follow_imports = "silent"
+follow_imports_for_stubs = false
+
+# Suppressing errors
+# Shows errors related to strict None checking, if the global strict_optional
+# flag is enabled
+strict_optional = true
+no_implicit_optional = true
+
+# Disallow dynamic typing
+# Disallows usage of types that come from unfollowed imports
+disallow_any_unimported = false
+# Disallows all expressions in the module that have type Any
+disallow_any_expr = false
+# Disallows functions that have Any in their signature after decorator transformation.
+disallow_any_decorated = false
+# Disallows explicit Any in type positions such as type annotations and generic type parameters.
+disallow_any_explicit = false
+# Disallows usage of generic types that do not specify explicit type parameters.
+disallow_any_generics = false
+# Disallows subclassing a value of type Any.
+disallow_subclassing_any = false
+
+# Untyped definitions and calls
+# Disallows calling functions without type annotations from functions with type annotations.
+disallow_untyped_calls = false
+# Disallows defining functions without type annotations or with incomplete type annotations
+disallow_untyped_defs = false
+# Disallows defining functions with incomplete type annotations.
+check_untyped_defs = false
+# Type-checks the interior of functions without type annotations.
+disallow_incomplete_defs = false
+# Reports an error whenever a function with type annotations is decorated with a decorator without annotations.
+disallow_untyped_decorators = false
+
+# Prohibit comparisons of non-overlapping types (ex: 42 == "no")
+strict_equality = true
+
+# Configuring warnings
+# Warns about unneeded # type: ignore comments.
+warn_unused_ignores = true
+# Shows errors for missing return statements on some execution paths.
+warn_no_return = true
+# Shows a warning when returning a value with type Any from a function declared with a non- Any return type.
+warn_return_any = false
+
+# Miscellaneous strictness flags
+# Allows variables to be redefined with an arbitrary type, as long as the redefinition is in the same block and nesting level as the original definition.
+allow_redefinition = true
+
+# XXX does this thing really works?
+# Ignore the imported code from py-libp2p
+# [mypy-aleph.toolkit.libp2p_stubs.""]
+# ignore_errors = True
+
+[tool.pytest.ini_options]
+minversion = "6.0"
+pythonpath = ["src"]
+addopts = "-vv -m \"not ledger_hardware\""
+norecursedirs = ["*.egg", "dist", "build", ".tox", ".venv", "*/site-packages/*"]
+testpaths = ["tests/unit"]
+markers = {ledger_hardware = "marks tests as requiring ledger hardware"}
+
+[tool.coverage.run]
+branch = true
+parallel = true
+source = [
+    "src/",
+]
+omit = [
+    "*/site-packages/*",
+]
+
+[tool.coverage.paths]
+source = [
+    "src/",
+]
+omit = [
+    "*/site-packages/*",
+]
+
+[tool.coverage.report]
+show_missing = true
+skip_empty = true
+exclude_lines = [
+    # Have to re-enable the standard pragma
+    "pragma: no cover",
+
+    # Don't complain about missing debug-only code:
+    "def __repr__",
+    "if self\\.debug",
+
+    # Don't complain if tests don't hit defensive assertion code:
+    "raise AssertionError",
+    "raise NotImplementedError",
+
+    # Don't complain if non-runnable code isn't run:
+    "if 0:",
+    "if __name__ == .__main__.:",
+
+    # Don't complain about ineffective code:
+    "pass",
+]
diff --git a/setup.cfg b/setup.cfg
deleted file mode 100644
index 933510ef5..000000000
--- a/setup.cfg
+++ /dev/null
@@ -1,189 +0,0 @@
-# This file is used to configure your project.
-# Read more about the various options under:
-# http://setuptools.readthedocs.io/en/latest/setuptools.html#configuring-setup-using-setup-cfg-files
-
-[metadata]
-name = pyaleph
-description = Reference implementation of Aleph.im next generation network of decentralized big data applications.
-author = Moshe Malawach
-author_email = moshe.malawach@protonmail.com
-license = mit
-url = https://aleph.im
-long_description = file: README.md
-long_description_content_type = text/markdown
-# Change if running only on Windows, Mac or Linux (comma-separated)
-platforms = any
-# Add here all kinds of additional classifiers as defined under
-# https://pypi.python.org/pypi?%3Aaction=list_classifiers
-classifiers =
-    Development Status :: 4 - Beta
-    Programming Language :: Python
-
-[options]
-zip_safe = False
-packages = find:
-include_package_data = True
-package_dir =
-    =src
-# DON'T CHANGE THE FOLLOWING LINE! IT WILL BE UPDATED BY PYSCAFFOLD!
-setup_requires =
-      setuptools_scm>=8.0.4
-      pytest-runner>=2.0,<3dev
-
-# Note: eth/web3 dependencies updates are sensitive and can trigger a lot of dependency conflicts.
-# Update with care. Dependencies that were added to make it all work are annotated accordingly.
-install_requires =
-    aio_pika==9.1.3
-    aiocache==0.12.2
-    aiohttp-cors==0.7.0
-    aiohttp-jinja2==1.5
-    aiohttp==3.8.4
-    aioipfs@git+https://github.com/aleph-im/aioipfs.git@d671c79b2871bb4d6c8877ba1e7f3ffbe7d20b71
-    alembic==1.12.1
-    aleph-message==0.4.2
-    aleph-p2p-client@git+https://github.com/aleph-im/p2p-service-client-python@2c04af39c566217f629fd89505ffc3270fba8676
-    aleph-pytezos@git+https://github.com/aleph-im/aleph-pytezos.git@32dd1749a4773da494275709060632cbeba9a51b
-    asyncpg==0.28.0
-    base58>=1.0.3
-    coincurve==18.0.0
-    configmanager==1.35.1
-    configparser==6.0.0
-    cosmospy==6.0.0
-    dataclasses_json==0.5.6
-    eth_account==0.10.0
-    eth-typing~=4.0
-    gunicorn==21.2.0
-    hexbytes==0.2.2
-    msgpack==1.0.3  # required by aiocache
-    multiaddr==0.0.9    # for libp2p-stubs
-    aleph-nuls2==0.1.0
-    orjson>=3.7.7   # Minimum version for Python 3.11
-    psycopg2-binary==2.9.5  # Note: psycopg3 is not yet supported by SQLAlchemy
-    pycryptodome==3.17.0  # for libp2p-stubs
-    pymultihash==0.8.2  # for libp2p-stubs
-    pynacl==1.5.0
-    python-dateutil==2.8.2
-    pytz==2023.3
-    pyyaml==6.0
-    redis[hiredis]==5.0.1
-    requests==2.31.0
-    secp256k1==0.14.0
-    sentry-sdk==1.34.0
-    setproctitle==1.3.3
-    sqlalchemy[mypy]==1.4.41
-    sqlalchemy-utils==0.38.3
-    substrate-interface==1.7.4
-    ujson==5.1.0  # required by aiocache
-    urllib3==2.0.7
-    uvloop==0.19.0
-    web3==6.11.2
-    aiofiles==23.2.1
-    types-aiofiles==23.2.0.20240403
-
-dependency_links =
-    https://github.com/aleph-im/py-libp2p/tarball/0.1.4-1-use-set#egg=libp2p
-    https://github.com/aleph-im/aioipfs/tarball/hoh-more-exceptions#egg=aioipfs
-
-# The usage of test_requires is discouraged, see `Dependency Management` docs
-# tests_require = pytest; pytest-cov
-# Require a specific Python version, e.g. Python 2.7 or >= 3.4
-# python_requires = >=2.7,!=3.0.*,!=3.1.*,!=3.2.*,!=3.3.*
-
-[options.packages.find]
-where = src
-exclude =
-    tests
-
-[options.extras_require]
-# Add here additional requirements for extra features, to install with:
-# `pip install pyaleph[PDF]` like:
-# PDF = ReportLab; RXP
-# Add here test requirements (semicolon/line-separated)
-testing =
-    ipfshttpclient==0.8.0a2  # eth/web3 test dependency, for some reason
-    more-itertools==8.14.0
-    mypy==1.2.0
-    pytest
-    pytest-cov
-    pytest-aiohttp
-    pytest-asyncio
-    pytest-mock
-    types-pytz
-    types-redis
-    types-requests
-    types-setuptools
-nuls2 =
-    aleph-nuls2==0.1.0
-    py-ed25519-bindings==1.0.2  # Python 3.11
-polkadot =
-    substrate-interface>=0.9.27
-cosmos =
-    cosmospy
-docs =
-    sphinxcontrib-plantuml
-
-[options.entry_points]
-# Add here console scripts like:
-console_scripts =
-   pyaleph = aleph.commands:run
-# For example:
-# console_scripts =
-#     fibonacci = pyaleph.skeleton:run
-# And any other entry points, for example:
-# pyscaffold.cli =
-#     awesome = pyscaffoldext.awesome.extension:AwesomeExtension
-
-[test]
-# py.test options when running `python setup.py test`
-# addopts = --verbose
-extras = True
-
-[tool:pytest]
-# Options for py.test:
-# Specify command line options as you would do when invoking py.test directly.
-# e.g. --cov-report html (or xml) for html/xml output or --junitxml junit.xml
-# in order to write a coverage file that can be read by Jenkins.
-# --cov aleph --cov-report term-missing
-addopts =
-    --disable-pytest-warnings
-    --verbose
-norecursedirs =
-    dist
-    build
-    .tox
-testpaths = tests
-
-[aliases]
-build = bdist_wheel
-release = build upload
-
-[bdist_wheel]
-# Use this option if your package is pure-python
-universal = 1
-
-[build_sphinx]
-source_dir = docs
-build_dir = docs/_build
-
-[devpi:upload]
-# Options for the devpi: PyPI server and packaging tool
-# VCS export must be deactivated since we are using setuptools-scm
-no-vcs = 1
-formats = bdist_wheel
-
-[flake8]
-# Some sane defaults for the code style checker flake8
-exclude =
-    .tox
-    build
-    dist
-    .eggs
-    docs/conf.py
-
-[pyscaffold]
-# PyScaffold's parameters when the project was created.
-# This will be used when updating. Do not change!
-version = 3.1
-package = aleph
-extensions =
-    markdown
diff --git a/setup.py b/setup.py
deleted file mode 100644
index d12b5ca22..000000000
--- a/setup.py
+++ /dev/null
@@ -1,24 +0,0 @@
-#!/usr/bin/env python
-# -*- coding: utf-8 -*-
-"""
-    Setup file for pyaleph.
-    Use setup.cfg to configure your project.
-
-    This file was generated with PyScaffold 3.1.
-    PyScaffold helps you to put up the scaffold of your new Python project.
-    Learn more under: https://pyscaffold.org/
-"""
-import sys
-
-from pkg_resources import require, VersionConflict
-from setuptools import setup
-
-try:
-    require('setuptools>=38.3')
-except VersionConflict:
-    print("Error: version of setuptools is too old (<38.3)!")
-    sys.exit(1)
-
-
-if __name__ == "__main__":
-    setup(use_pyscaffold=True)