diff --git a/testutil/store/mock_iterator.go b/testutil/store/mock_iterator.go
new file mode 100644
index 0000000000..3f18bca64c
--- /dev/null
+++ b/testutil/store/mock_iterator.go
@@ -0,0 +1,48 @@
+package store
+
+// MockIterator is a mock implementation of Iterator that simply iterates an underlying slice.
+type MockIterator struct {
+	keys   [][]byte
+	values [][]byte
+
+	curIndex int
+}
+
+func (MockIterator) Domain() ([]byte, []byte) {
+	panic("not implemented")
+}
+
+func (m MockIterator) Valid() bool {
+	return m.curIndex < len(m.keys)
+}
+
+func (m *MockIterator) Next() {
+	m.curIndex++
+}
+
+func (m MockIterator) Key() []byte {
+	return m.keys[m.curIndex]
+}
+
+func (m MockIterator) Value() []byte {
+	return m.values[m.curIndex]
+}
+
+func (m MockIterator) Error() error {
+	panic("not implemented")
+}
+
+func (m MockIterator) Close() error {
+	return nil
+}
+
+// NewMockIterator creates a new MockIterator.
+func NewMockIterator(
+	keys [][]byte, values [][]byte,
+) *MockIterator {
+	return &MockIterator{
+		keys:     keys,
+		values:   values,
+		curIndex: 0,
+	}
+}
diff --git a/x/ccv/provider/keeper/relay.go b/x/ccv/provider/keeper/relay.go
index 15dcfcbcb7..c5772a9687 100644
--- a/x/ccv/provider/keeper/relay.go
+++ b/x/ccv/provider/keeper/relay.go
@@ -224,24 +224,28 @@ func (k Keeper) QueueVSCPackets(ctx sdk.Context) {
 	// TODO make this a param
 	maxTotalValidators := 500
 
-	validators := make([]stakingtypes.Validator, 0, maxTotalValidators)
+	allValidators := make([]stakingtypes.Validator, maxTotalValidators)
 	defer validatorIterator.Close()
 
 	i := 0
 	for ; validatorIterator.Valid() && i < int(maxTotalValidators); validatorIterator.Next() {
-		address := validatorIterator.Value()
+		address := sdk.ConsAddress(validatorIterator.Value())
 		validator, found := k.stakingKeeper.GetValidatorByConsAddr(ctx, address)
 		if !found {
 			k.Logger(ctx).Error("validator not found", "address", address.String())
 			continue
 		}
 
-		if validator.IsBonded() {
-			validators[i] = validator
-			i++
-		}
+		allValidators[i] = validator
+		i++
 	}
 
+	// truncate all validators
+	allValidators = allValidators[:i]
+
+	// get the bonded validators to compute the top N to opt in
+	bondedValidators := k.stakingKeeper.GetLastValidators(ctx)
+
 	for _, chain := range k.GetAllConsumerChains(ctx) {
 		currentValidators := k.GetConsumerValSet(ctx, chain.ChainId)
 
@@ -253,7 +257,7 @@ func (k Keeper) QueueVSCPackets(ctx sdk.Context) {
 			}
 		}
 
-		nextValidators := k.ComputeNextValidators(ctx, chain.ChainId, bondedValidators)
+		nextValidators := k.ComputeNextValidators(ctx, chain.ChainId, allValidators)
 
 		valUpdates := DiffValidators(currentValidators, nextValidators)
 		k.SetConsumerValSet(ctx, chain.ChainId, nextValidators)
diff --git a/x/ccv/provider/keeper/relay_test.go b/x/ccv/provider/keeper/relay_test.go
index 5f74d93424..1b155efd0b 100644
--- a/x/ccv/provider/keeper/relay_test.go
+++ b/x/ccv/provider/keeper/relay_test.go
@@ -23,6 +23,7 @@ import (
 	"github.com/cosmos/interchain-security/v4/testutil/crypto"
 	cryptotestutil "github.com/cosmos/interchain-security/v4/testutil/crypto"
 	testkeeper "github.com/cosmos/interchain-security/v4/testutil/keeper"
+	teststore "github.com/cosmos/interchain-security/v4/testutil/store"
 	"github.com/cosmos/interchain-security/v4/x/ccv/provider/keeper"
 	"github.com/cosmos/interchain-security/v4/x/ccv/provider/types"
 	providertypes "github.com/cosmos/interchain-security/v4/x/ccv/provider/types"
@@ -71,6 +72,7 @@ func TestQueueVSCPackets(t *testing.T) {
 		defer ctrl.Finish()
 		mocks := testkeeper.NewMockedKeepers(ctrl)
 		mocks.MockStakingKeeper.EXPECT().GetLastValidators(ctx).Times(1)
+		mocks.MockStakingKeeper.EXPECT().ValidatorsPowerStoreIterator(ctx).Return(teststore.NewMockIterator([][]byte{}, [][]byte{})).Times(1)
 
 		pk := testkeeper.NewInMemProviderKeeper(keeperParams, mocks)
 		// no-op if tc.packets is empty
@@ -769,6 +771,9 @@ func TestEndBlockVSU(t *testing.T) {
 
 	mocks.MockStakingKeeper.EXPECT().GetLastValidators(gomock.Any()).Return(lastValidators).AnyTimes()
 
+	// set the mock to return the last validators we built also as the set of all validators
+	MockAllValidatorsAsLastValidators(mocks, lastValidators)
+
 	// set a sample client for a consumer chain so that `GetAllConsumerChains` in `QueueVSCPackets` iterates at least once
 	providerKeeper.SetConsumerClientId(ctx, chainID, "clientID")
 
@@ -795,6 +800,24 @@ func TestEndBlockVSU(t *testing.T) {
 	require.Equal(t, 1, len(providerKeeper.GetPendingVSCPackets(ctx, chainID)))
 }
 
+// MockAllValidatorsAsLastValidators mocks the staking keeper to return the given validators
+// when prompted for the whole validator set.
+// The mocks are set up to mock the calls made during the `EndBlockVSU` method.
+func MockAllValidatorsAsLastValidators(mocks testkeeper.MockedKeepers, validators []stakingtypes.Validator) {
+	keySlice := make([][]byte, len(validators))
+	valsSlice := make([][]byte, len(validators))
+	for i, val := range validators {
+		keySlice[i] = []byte{}
+		valsSlice[i] = val.GetOperator()
+	}
+
+	mocks.MockStakingKeeper.EXPECT().ValidatorsPowerStoreIterator(gomock.Any()).Return(teststore.NewMockIterator(keySlice, valsSlice)).AnyTimes()
+
+	for i, val := range validators {
+		mocks.MockStakingKeeper.EXPECT().GetValidatorByConsAddr(gomock.Any(), sdk.ConsAddress(val.GetOperator())).Return(validators[i], true).AnyTimes()
+	}
+}
+
 // TestQueueVSCPacketsWithPowerCapping tests queueing validator set updates with power capping
 func TestQueueVSCPacketsWithPowerCapping(t *testing.T) {
 	providerKeeper, ctx, ctrl, mocks := testkeeper.GetProviderKeeperAndCtx(t, testkeeper.NewInMemKeeperParams(t))
@@ -822,7 +845,11 @@ func TestQueueVSCPacketsWithPowerCapping(t *testing.T) {
 	valEPubKey, _ := valE.TmConsPublicKey()
 	mocks.MockStakingKeeper.EXPECT().GetValidatorByConsAddr(ctx, valEConsAddr).Return(valE, true).AnyTimes()
 
-	mocks.MockStakingKeeper.EXPECT().GetLastValidators(ctx).Return([]stakingtypes.Validator{valA, valB, valC, valD, valE}).AnyTimes()
+	vals := []stakingtypes.Validator{valA, valB, valC, valD, valE}
+	mocks.MockStakingKeeper.EXPECT().GetLastValidators(ctx).Return(vals).AnyTimes()
+
+	// set the mock to return the last validators we built also as the set of all validators
+	MockAllValidatorsAsLastValidators(mocks, vals)
 
 	// add a consumer chain
 	providerKeeper.SetConsumerClientId(ctx, "chainID", "clientID")