The Xion Daemon is scaffolded off of CosmWasm/wasmd rather than being scaffolded with ignite in order to more easily achieve compatibility with the latest cosmos-sdk and CosmWasm releases.
At the root of the project, run:
heighliner build -c xion --local --no-cache --no-build-cache && XION_IMAGE=xion:local make test-integration
Note This will take some time (10+ minutes) to run the as it will need to build the docker image and pull dependencies.
The final line of output should read as follows if successful:
ok integration_tests 164.191s