diff --git a/state-chain/chains/src/dot.rs b/state-chain/chains/src/dot.rs
index 26c1cdd93e2..7ddedda44d5 100644
--- a/state-chain/chains/src/dot.rs
+++ b/state-chain/chains/src/dot.rs
@@ -267,10 +267,12 @@ impl Chain for Polkadot {
 	type DepositChannelState = PolkadotChannelState;
 	type DepositDetails = ();
 	type Transaction = PolkadotTransactionData;
-	type ReplayProtectionParams = ();
+	type ReplayProtectionParams = ResetProxyAccountNonce;
 	type ReplayProtection = PolkadotReplayProtection;
 }
 
+pub type ResetProxyAccountNonce = bool;
+
 #[derive(Clone, Encode, Decode, MaxEncodedLen, TypeInfo, Debug, PartialEq, Eq, Default)]
 pub struct PolkadotChannelState;
 
diff --git a/state-chain/chains/src/dot/api.rs b/state-chain/chains/src/dot/api.rs
index de5173a7374..8ce5b46bd50 100644
--- a/state-chain/chains/src/dot/api.rs
+++ b/state-chain/chains/src/dot/api.rs
@@ -66,7 +66,7 @@ where
 		transfer_params: Vec<TransferAssetParams<Polkadot>>,
 	) -> Result<Self, AllBatchError> {
 		Ok(Self::BatchFetchAndTransfer(batch_fetch_and_transfer::extrinsic_builder(
-			E::replay_protection(()),
+			E::replay_protection(false),
 			fetch_params,
 			transfer_params,
 			E::try_vault_account().ok_or(AllBatchError::Other)?,
@@ -85,7 +85,7 @@ where
 		let vault = E::try_vault_account().ok_or(())?;
 
 		Ok(Self::ChangeGovKey(rotate_vault_proxy::extrinsic_builder(
-			E::replay_protection(()),
+			E::replay_protection(false),
 			maybe_old_key,
 			new_key,
 			vault,
@@ -104,7 +104,8 @@ where
 		let vault = E::try_vault_account().ok_or(SetAggKeyWithAggKeyError::Failed)?;
 
 		Ok(Self::RotateVaultProxy(rotate_vault_proxy::extrinsic_builder(
-			E::replay_protection(()),
+			// we reset the proxy account nonce on a rotation tx
+			E::replay_protection(true),
 			maybe_old_key,
 			new_key,
 			vault,
diff --git a/state-chain/pallets/cf-environment/src/lib.rs b/state-chain/pallets/cf-environment/src/lib.rs
index 9fe556e7292..7feedffaa9b 100644
--- a/state-chain/pallets/cf-environment/src/lib.rs
+++ b/state-chain/pallets/cf-environment/src/lib.rs
@@ -387,15 +387,17 @@ impl<T: Config> Pallet<T> {
 		})
 	}
 
-	pub fn next_polkadot_proxy_account_nonce() -> PolkadotIndex {
+	pub fn next_polkadot_proxy_account_nonce(reset_nonce: bool) -> PolkadotIndex {
 		PolkadotProxyAccountNonce::<T>::mutate(|nonce| {
-			*nonce += 1;
-			*nonce - 1
-		})
-	}
+			let current_nonce = *nonce;
 
-	pub fn reset_polkadot_proxy_account_nonce() {
-		PolkadotProxyAccountNonce::<T>::set(0);
+			if reset_nonce {
+				*nonce = 0;
+			} else {
+				*nonce += 1;
+			}
+			current_nonce
+		})
 	}
 
 	pub fn add_bitcoin_utxo_to_list(
diff --git a/state-chain/pallets/cf-vaults/src/lib.rs b/state-chain/pallets/cf-vaults/src/lib.rs
index 5ef4649c508..4b153a60e81 100644
--- a/state-chain/pallets/cf-vaults/src/lib.rs
+++ b/state-chain/pallets/cf-vaults/src/lib.rs
@@ -9,7 +9,7 @@ use cf_traits::{
 	impl_pallet_safe_mode, offence_reporting::OffenceReporter, AccountRoleRegistry, AsyncResult,
 	Broadcaster, Chainflip, CurrentEpochIndex, EpochKey, GetBlockHeight, KeyProvider, KeyState,
 	SafeMode, SetSafeMode, Slashing, ThresholdSigner, VaultKeyWitnessedHandler, VaultRotator,
-	VaultStatus, VaultTransitionHandler,
+	VaultStatus,
 };
 use frame_support::{
 	pallet_prelude::*,
@@ -174,8 +174,6 @@ pub mod pallet {
 			<<Self as pallet::Config<I>>::Chain as Chain>::ChainCrypto,
 		>;
 
-		type VaultTransitionHandler: VaultTransitionHandler<Self::Chain>;
-
 		/// The pallet dispatches calls, so it depends on the runtime's aggregated Call type.
 		type RuntimeCall: From<Call<Self, I>> + IsType<<Self as frame_system::Config>::RuntimeCall>;
 
@@ -954,7 +952,6 @@ impl<T: Config<I>, I: 'static> Pallet<T, I> {
 				active_from_block: block_number.saturating_add(One::one()),
 			},
 		);
-		T::VaultTransitionHandler::on_new_vault();
 		Self::deposit_event(Event::VaultRotationCompleted);
 	}
 }
diff --git a/state-chain/pallets/cf-vaults/src/mock.rs b/state-chain/pallets/cf-vaults/src/mock.rs
index 8436a54e609..f68917ef24c 100644
--- a/state-chain/pallets/cf-vaults/src/mock.rs
+++ b/state-chain/pallets/cf-vaults/src/mock.rs
@@ -133,11 +133,6 @@ impl ApiCall<MockEthereumChainCrypto> for MockSetAggKeyWithAggKey {
 	}
 }
 
-pub struct MockVaultTransitionHandler;
-impl VaultTransitionHandler<MockEthereum> for MockVaultTransitionHandler {
-	fn on_new_vault() {}
-}
-
 pub struct MockBroadcaster;
 
 impl MockBroadcaster {
@@ -214,7 +209,6 @@ impl pallet_cf_vaults::Config for Test {
 	type ThresholdSigner = MockThresholdSigner<MockEthereumChainCrypto, RuntimeCall>;
 	type OffenceReporter = MockOffenceReporter;
 	type SetAggKeyWithAggKey = MockSetAggKeyWithAggKey;
-	type VaultTransitionHandler = MockVaultTransitionHandler;
 	type WeightInfo = ();
 	type Broadcaster = MockBroadcaster;
 	type SafeMode = MockRuntimeSafeMode;
diff --git a/state-chain/runtime/src/chainflip.rs b/state-chain/runtime/src/chainflip.rs
index 5804088bbbb..979e709a695 100644
--- a/state-chain/runtime/src/chainflip.rs
+++ b/state-chain/runtime/src/chainflip.rs
@@ -26,7 +26,7 @@ use cf_chains::{
 	},
 	dot::{
 		api::PolkadotApi, Polkadot, PolkadotAccountId, PolkadotCrypto, PolkadotReplayProtection,
-		PolkadotTransactionData, RuntimeVersion,
+		PolkadotTransactionData, ResetProxyAccountNonce, RuntimeVersion,
 	},
 	eth::{
 		self,
@@ -47,7 +47,6 @@ use cf_traits::{
 	AccountRoleRegistry, BlockEmissions, BroadcastAnyChainGovKey, Broadcaster, Chainflip,
 	CommKeyBroadcaster, DepositApi, DepositHandler, EgressApi, EpochInfo, Heartbeat, Issuance,
 	KeyProvider, OnBroadcastReady, QualifyNode, RewardsDistribution, RuntimeUpgrade,
-	VaultTransitionHandler,
 };
 use codec::{Decode, Encode};
 use frame_support::{
@@ -330,10 +329,10 @@ pub struct DotEnvironment;
 impl ReplayProtectionProvider<Polkadot> for DotEnvironment {
 	// Get the Environment values for vault_account, NetworkChoice and the next nonce for the
 	// proxy_account
-	fn replay_protection(_params: ()) -> PolkadotReplayProtection {
+	fn replay_protection(reset_nonce: ResetProxyAccountNonce) -> PolkadotReplayProtection {
 		PolkadotReplayProtection {
 			genesis_hash: Environment::polkadot_genesis_hash(),
-			nonce: Environment::next_polkadot_proxy_account_nonce(),
+			nonce: Environment::next_polkadot_proxy_account_nonce(reset_nonce),
 		}
 	}
 }
@@ -376,18 +375,6 @@ impl ChainEnvironment<(), cf_chains::btc::AggKey> for BtcEnvironment {
 	}
 }
 
-pub struct EthVaultTransitionHandler;
-impl VaultTransitionHandler<Ethereum> for EthVaultTransitionHandler {}
-
-pub struct DotVaultTransitionHandler;
-impl VaultTransitionHandler<Polkadot> for DotVaultTransitionHandler {
-	fn on_new_vault() {
-		Environment::reset_polkadot_proxy_account_nonce();
-	}
-}
-pub struct BtcVaultTransitionHandler;
-impl VaultTransitionHandler<Bitcoin> for BtcVaultTransitionHandler {}
-
 pub struct TokenholderGovernanceBroadcaster;
 
 impl TokenholderGovernanceBroadcaster {
diff --git a/state-chain/runtime/src/lib.rs b/state-chain/runtime/src/lib.rs
index 79ca0f2106b..da10cbad2f6 100644
--- a/state-chain/runtime/src/lib.rs
+++ b/state-chain/runtime/src/lib.rs
@@ -86,9 +86,8 @@ pub use cf_traits::{EpochInfo, QualifyNode, SessionKeysRegistered, SwappingApi};
 pub use chainflip::chain_instances::*;
 use chainflip::{
 	all_vaults_rotator::AllVaultRotator, epoch_transition::ChainflipEpochTransitions,
-	BroadcastReadyProvider, BtcEnvironment, BtcVaultTransitionHandler, ChainAddressConverter,
-	ChainflipHeartbeat, DotEnvironment, DotVaultTransitionHandler, EthEnvironment,
-	EthVaultTransitionHandler, TokenholderGovernanceBroadcaster,
+	BroadcastReadyProvider, BtcEnvironment, ChainAddressConverter, ChainflipHeartbeat,
+	DotEnvironment, EthEnvironment, TokenholderGovernanceBroadcaster,
 };
 use safe_mode::{RuntimeSafeMode, WitnesserCallPermission};
 
@@ -241,7 +240,6 @@ impl pallet_cf_vaults::Config<EthereumInstance> for Runtime {
 	type Offence = chainflip::Offence;
 	type Chain = Ethereum;
 	type SetAggKeyWithAggKey = eth::api::EthereumApi<EthEnvironment>;
-	type VaultTransitionHandler = EthVaultTransitionHandler;
 	type Broadcaster = EthereumBroadcaster;
 	type OffenceReporter = Reputation;
 	type WeightInfo = pallet_cf_vaults::weights::PalletWeight<Runtime>;
@@ -259,7 +257,6 @@ impl pallet_cf_vaults::Config<PolkadotInstance> for Runtime {
 	type Offence = chainflip::Offence;
 	type Chain = Polkadot;
 	type SetAggKeyWithAggKey = dot::api::PolkadotApi<DotEnvironment>;
-	type VaultTransitionHandler = DotVaultTransitionHandler;
 	type Broadcaster = PolkadotBroadcaster;
 	type OffenceReporter = Reputation;
 	type WeightInfo = pallet_cf_vaults::weights::PalletWeight<Runtime>;
@@ -277,7 +274,6 @@ impl pallet_cf_vaults::Config<BitcoinInstance> for Runtime {
 	type Offence = chainflip::Offence;
 	type Chain = Bitcoin;
 	type SetAggKeyWithAggKey = cf_chains::btc::api::BitcoinApi<BtcEnvironment>;
-	type VaultTransitionHandler = BtcVaultTransitionHandler;
 	type Broadcaster = BitcoinBroadcaster;
 	type OffenceReporter = Reputation;
 	type WeightInfo = pallet_cf_vaults::weights::PalletWeight<Runtime>;
diff --git a/state-chain/traits/src/lib.rs b/state-chain/traits/src/lib.rs
index 02f53997b55..03beee6c858 100644
--- a/state-chain/traits/src/lib.rs
+++ b/state-chain/traits/src/lib.rs
@@ -725,9 +725,6 @@ impl<T: frame_system::Config> EgressApi<Polkadot> for T {
 	}
 }
 
-pub trait VaultTransitionHandler<C: Chain> {
-	fn on_new_vault() {}
-}
 pub trait VaultKeyWitnessedHandler<C: Chain> {
 	fn on_new_key_activated(block_number: C::ChainBlockNumber) -> DispatchResultWithPostInfo;
 }