diff --git a/.ci/merge_versions.py b/.ci/merge_versions.py
new file mode 100644
index 0000000..6393e72
--- /dev/null
+++ b/.ci/merge_versions.py
@@ -0,0 +1,82 @@
+import re
+import sys
+
+
+def parse_toml_deps(content):
+    """Extract dependency versions from TOML content."""
+    deps = {}
+    in_deps = False
+    for line in content.split("\n"):
+        if line.strip() == "[dependencies]":
+            in_deps = True
+            continue
+        if in_deps and line.strip().startswith("["):
+            break
+        if in_deps and "=" in line and not line.strip().startswith("#"):
+            # Parse: package = "version" or package = { version = "version", ... }
+            match = re.match(r'^\s*(\S+)\s*=\s*["{].*version\s*=\s*"([^"]+)"', line)
+            if match:
+                deps[match.group(1)] = match.group(2)
+            else:
+                match = re.match(r'^\s*(\S+)\s*=\s*"([^"]+)"', line)
+                if match:
+                    deps[match.group(1)] = match.group(2)
+    return deps
+
+
+def update_template_versions(template_content, new_versions):
+    """Update versions in template while preserving Liquid syntax."""
+    lines = template_content.split("\n")
+    result = []
+
+    for line in lines:
+        updated_line = line
+        # Skip Liquid control flow lines
+        if re.match(r"^\s*{%", line):
+            result.append(line)
+            continue
+
+        # Check if this line has a dependency with version
+        for dep_name, new_version in new_versions.items():
+            # Match: package = "version"
+            pattern1 = rf'^(\s*{re.escape(dep_name)}\s*=\s*")([^"]+)(".*)'
+            match = re.match(pattern1, updated_line)
+            if match:
+                updated_line = f"{match.group(1)}{new_version}{match.group(3)}"
+                break
+
+            # Match: package = { version = "version", ... }
+            pattern2 = rf'^(\s*{re.escape(dep_name)}\s*=\s*{{[^}}]*version\s*=\s*")([^"]+)(".*)'
+            match = re.match(pattern2, updated_line)
+            if match:
+                updated_line = f"{match.group(1)}{new_version}{match.group(3)}"
+                break
+
+        result.append(updated_line)
+
+    return "\n".join(result)
+
+
+if __name__ == "__main__":
+    # Read files
+    with open(sys.argv[1], "r") as f:
+        upgraded_content = f.read()
+
+    with open(sys.argv[2], "r") as f:
+        template_content = f.read()
+
+    # Extract new versions from upgraded Cargo.toml
+    new_versions = parse_toml_deps(upgraded_content)
+
+    print(f"Found {len(new_versions)} dependencies:")
+    for dep, version in sorted(new_versions.items()):
+        print(f"  {dep} -> {version}")
+
+    # Update template while preserving Liquid syntax
+    updated_template = update_template_versions(template_content, new_versions)
+
+    # Write updated template
+    with open(sys.argv[2], "w") as f:
+        f.write(updated_template)
+
+    print("\n✅ Template updated successfully!")
diff --git a/.env.liquid b/.env.liquid
new file mode 100644
index 0000000..4406b5a
--- /dev/null
+++ b/.env.liquid
@@ -0,0 +1,9 @@
+# API Configuration
+{{env_prefix}}_API_KEY=your-secret-api-key-here
+
+# Server Configuration
+{{env_prefix}}_HOST=127.0.0.1
+{{env_prefix}}_PORT={{default_port}}
+
+# Logging
+{{env_prefix}}_LOG_LEVEL={{default_log_level}}
diff --git a/.genignore b/.genignore
index edd13b3..c8d5dfa 100644
--- a/.genignore
+++ b/.genignore
@@ -1,3 +1,5 @@
+.ci/
+.github/
 target/
 Cargo.lock
 .env
diff --git a/.github/workflows/dependency-check.yml b/.github/workflows/dependency-check.yml
index eda5682..4406de1 100644
--- a/.github/workflows/dependency-check.yml
+++ b/.github/workflows/dependency-check.yml
@@ -93,10 +93,11 @@ jobs:
         run: |
           echo "📝 Updating template with new dependency versions..."
 
-          # Copy the upgraded Cargo.toml back to template
-          cp ../dep-check-test/Cargo.toml Cargo.toml.liquid
+          # Run the merge script from .ci directory
+          python3 .ci/merge_versions.py dep-check-test/Cargo.toml Cargo.toml.liquid
 
           # Show what changed
+          echo ""
           echo "Changes to template:"
           git diff Cargo.toml.liquid
         working-directory: ${{ github.workspace }}/axum-template
@@ -161,7 +162,7 @@ jobs:
           UPGRADE_SUMMARY=$(cat upgrade-output.txt | grep -A 100 "name.*old req.*compatible.*latest.*new req" | head -n 20)
 
           cat > pr-body.txt << 'EOF'
-          This PR contains automated dependency upgrades that have been tested and verified.
+          This PR contains automated dependency upgrades that have been tested with `cargo check` and `cargo build`
 
           ## Changes
 
diff --git a/.gitignore b/.gitignore
index 57d8fbc..02ad72c 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,3 +1,4 @@
 /target
 .env*
 !.env.example
+!.env.liquid
diff --git a/README.md b/README.md
index b87d5d9..672d9f9 100644
--- a/README.md
+++ b/README.md
@@ -58,7 +58,7 @@ APP_PORT=8080
 APP_LOG_LEVEL=info
 ```
 
-In development, you can use a `.env` file (copy from `.env.example`).
+In development, you can use the `.env` file.
 
 ## Project Structure