diff --git a/Makefile b/Makefile
index 7b09c74d9..d55ccfce9 100644
--- a/Makefile
+++ b/Makefile
@@ -201,9 +201,10 @@ init-golang-rly: kill-dev install
 	@echo "Initializing relayer..."
 	./network/relayer/interchain-acc-config/rly.sh
 
-start:
-	@echo "Starting up test network"
-	./network/start.sh
+start: kill-dev install
+	@echo "Starting up neutrond alone..."
+	BINARY=neutrond CHAINID=test-1 P2PPORT=26656 RPCPORT=26657 RESTPORT=1317 ROSETTA=8080 GRPCPORT=8090 GRPCWEB=8091 STAKEDENOM=untrn \
+	./network/init.sh && ./network/init-neutrond.sh && ./network/start.sh
 
 start-rly:
 	./network/hermes/start.sh
diff --git a/contracts/cwd_core.wasm b/contracts/cwd_core.wasm
index 9c17fcec0..2410b53c1 100644
Binary files a/contracts/cwd_core.wasm and b/contracts/cwd_core.wasm differ
diff --git a/contracts/cwd_pre_propose_multiple.wasm b/contracts/cwd_pre_propose_multiple.wasm
index 815a08594..3d19cb3bc 100644
Binary files a/contracts/cwd_pre_propose_multiple.wasm and b/contracts/cwd_pre_propose_multiple.wasm differ
diff --git a/contracts/cwd_pre_propose_overrule.wasm b/contracts/cwd_pre_propose_overrule.wasm
index 14acbc9c7..c1e48d638 100644
Binary files a/contracts/cwd_pre_propose_overrule.wasm and b/contracts/cwd_pre_propose_overrule.wasm differ
diff --git a/contracts/cwd_pre_propose_single.wasm b/contracts/cwd_pre_propose_single.wasm
index c26e45851..08f6b7e07 100644
Binary files a/contracts/cwd_pre_propose_single.wasm and b/contracts/cwd_pre_propose_single.wasm differ
diff --git a/contracts/cwd_proposal_multiple.wasm b/contracts/cwd_proposal_multiple.wasm
old mode 100644
new mode 100755
index efdc0e332..95849bc30
Binary files a/contracts/cwd_proposal_multiple.wasm and b/contracts/cwd_proposal_multiple.wasm differ
diff --git a/contracts/cwd_proposal_single.wasm b/contracts/cwd_proposal_single.wasm
index 5e586b146..2dfc53d15 100644
Binary files a/contracts/cwd_proposal_single.wasm and b/contracts/cwd_proposal_single.wasm differ
diff --git a/contracts/cwd_subdao_core.wasm b/contracts/cwd_subdao_core.wasm
index 7dd3dedf6..ad92e965e 100644
Binary files a/contracts/cwd_subdao_core.wasm and b/contracts/cwd_subdao_core.wasm differ
diff --git a/contracts/cwd_subdao_pre_propose_single.wasm b/contracts/cwd_subdao_pre_propose_single.wasm
index 2eee11227..6e5ea5458 100644
Binary files a/contracts/cwd_subdao_pre_propose_single.wasm and b/contracts/cwd_subdao_pre_propose_single.wasm differ
diff --git a/contracts/cwd_subdao_proposal_single.wasm b/contracts/cwd_subdao_proposal_single.wasm
index 263d8edb7..fa62c5520 100644
Binary files a/contracts/cwd_subdao_proposal_single.wasm and b/contracts/cwd_subdao_proposal_single.wasm differ
diff --git a/contracts/cwd_subdao_timelock_single.wasm b/contracts/cwd_subdao_timelock_single.wasm
index 109e46165..95cf71452 100644
Binary files a/contracts/cwd_subdao_timelock_single.wasm and b/contracts/cwd_subdao_timelock_single.wasm differ
diff --git a/contracts/lockdrop_vault.wasm b/contracts/lockdrop_vault.wasm
index 09bca3809..641755b1e 100644
Binary files a/contracts/lockdrop_vault.wasm and b/contracts/lockdrop_vault.wasm differ
diff --git a/contracts/neutron_reserve.wasm b/contracts/neutron_reserve.wasm
index a39c49d57..2e853ef82 100644
Binary files a/contracts/neutron_reserve.wasm and b/contracts/neutron_reserve.wasm differ
diff --git a/contracts/neutron_vault.wasm b/contracts/neutron_vault.wasm
index 3a591df32..7220d240f 100644
Binary files a/contracts/neutron_vault.wasm and b/contracts/neutron_vault.wasm differ
diff --git a/contracts/neutron_voting_registry.wasm b/contracts/neutron_voting_registry.wasm
index 1a5966d92..bcbfdcfc5 100644
Binary files a/contracts/neutron_voting_registry.wasm and b/contracts/neutron_voting_registry.wasm differ
diff --git a/go.mod b/go.mod
index 8e980a1b8..676406d08 100644
--- a/go.mod
+++ b/go.mod
@@ -3,8 +3,8 @@ module github.com/neutron-org/neutron
 go 1.18
 
 require (
-	github.com/CosmWasm/wasmd v0.30.0
-	github.com/CosmWasm/wasmvm v1.1.1
+	github.com/CosmWasm/wasmd v0.31.0
+	github.com/CosmWasm/wasmvm v1.2.1
 	github.com/armon/go-metrics v0.4.1
 	github.com/confio/ics23/go v0.9.0
 	github.com/cosmos/admin-module v0.0.0-00010101000000-000000000000
@@ -155,7 +155,7 @@ require (
 )
 
 replace (
-	github.com/CosmWasm/wasmd v0.30.0 => github.com/neutron-org/wasmd v0.30.0-ics-removed-genesis-checks
+	github.com/CosmWasm/wasmd v0.31.0 => github.com/neutron-org/wasmd v0.31.0-neutron-fixes
 	github.com/btcsuite/btcd => github.com/btcsuite/btcd v0.22.2
 	github.com/cosmos/admin-module => github.com/Ethernal-Tech/admin-module v0.0.0-20221102105340-e693f4d379c3
 	github.com/cosmos/cosmos-sdk => github.com/cosmos/cosmos-sdk v0.45.15-ics
diff --git a/go.sum b/go.sum
index 80590fa1c..832e28c92 100644
--- a/go.sum
+++ b/go.sum
@@ -504,8 +504,8 @@ github.com/CloudyKit/fastprinter v0.0.0-20200109182630-33d98a066a53/go.mod h1:+3
 github.com/CloudyKit/jet v2.1.3-0.20180809161101-62edd43e4f88+incompatible/go.mod h1:HPYO+50pSWkPoj9Q/eq0aRGByCL6ScRlUmiEX5Zgm+w=
 github.com/CloudyKit/jet/v3 v3.0.0/go.mod h1:HKQPgSJmdK8hdoAbKUUWajkHyHo4RaU5rMdUywE7VMo=
 github.com/CloudyKit/jet/v6 v6.1.0/go.mod h1:d3ypHeIRNo2+XyqnGA8s+aphtcVpjP5hPwP/Lzo7Ro4=
-github.com/CosmWasm/wasmvm v1.1.1 h1:0xtdrmmsP9fibe+x42WcMkp5aQ738BICgcH3FNVLzm4=
-github.com/CosmWasm/wasmvm v1.1.1/go.mod h1:ei0xpvomwSdONsxDuONzV7bL1jSET1M8brEx0FCXc+A=
+github.com/CosmWasm/wasmvm v1.2.1 h1:si0tRsRDdUShV0k51Wn6zRKlmj3/WWP9Yr4cLmDTf+8=
+github.com/CosmWasm/wasmvm v1.2.1/go.mod h1:vW/E3h8j9xBQs9bCoijDuawKo9kCtxOaS8N8J7KFtkc=
 github.com/DATA-DOG/go-sqlmock v1.3.3/go.mod h1:f/Ixk793poVmq4qj/V1dPUg2JEAKC73Q5eFN3EC/SaM=
 github.com/DATA-DOG/go-sqlmock v1.5.0/go.mod h1:f/Ixk793poVmq4qj/V1dPUg2JEAKC73Q5eFN3EC/SaM=
 github.com/DataDog/datadog-go v3.2.0+incompatible/go.mod h1:LButxg5PwREeZtORoXG3tL4fMGNddJ+vMq1mwgfaqoQ=
@@ -998,7 +998,7 @@ github.com/cosmos/ibc-go v1.2.2/go.mod h1:XmYjsRFOs6Q9Cz+CSsX21icNoH27vQKb3squgn
 github.com/cosmos/ibc-go/v3 v3.0.0/go.mod h1:Mb+1NXiPOLd+CPFlOC6BKeAUaxXlhuWenMmRiUiSmwY=
 github.com/cosmos/ibc-go/v4 v4.3.0 h1:yOzVsyZzsv4XPBux8gq+D0LhZn45yGWKjvT+6Vyo5no=
 github.com/cosmos/ibc-go/v4 v4.3.0/go.mod h1:CcLvIoi9NNtIbNsxs4KjBGjYhlwqtsmXy1AKARKiMzQ=
-github.com/cosmos/interchain-accounts v0.2.4 h1:7UrroFQsCRSp17980mk6anx4YteveIJVkU+a0wlsHQI=
+github.com/cosmos/interchain-accounts v0.2.6 h1:TV2M2g1/Rb9MCNw1YePdBKE0rcEczNj1RGHT+2iRYas=
 github.com/cosmos/interchain-security v1.2.0 h1:DHC00F3diTXDBgTgLSB+O8qbs1p7DtTfUeO8XBEXsZo=
 github.com/cosmos/interchain-security v1.2.0/go.mod h1:Y4onDsQuqkemGS7UqfyohahlBLt5gh1i8OVbPeMcuhA=
 github.com/cosmos/ledger-cosmos-go v0.11.1/go.mod h1:J8//BsAGTo3OC/vDLjMRFLW6q0WAaXvHnVc7ZmE8iUY=
@@ -2145,8 +2145,8 @@ github.com/neelance/sourcemap v0.0.0-20200213170602-2833bce08e4c/go.mod h1:Qr6/a
 github.com/neilotoole/errgroup v0.1.5/go.mod h1:Q2nLGf+594h0CLBs/Mbg6qOr7GtqDK7C2S41udRnToE=
 github.com/neilotoole/errgroup v0.1.6/go.mod h1:Q2nLGf+594h0CLBs/Mbg6qOr7GtqDK7C2S41udRnToE=
 github.com/networkplumbing/go-nft v0.2.0/go.mod h1:HnnM+tYvlGAsMU7yoYwXEVLLiDW9gdMmb5HoGcwpuQs=
-github.com/neutron-org/wasmd v0.30.0-ics-removed-genesis-checks h1:YWDWEHobuZMMipP0rTItE/uN4Xs75GLQK1CKrgfn6ss=
-github.com/neutron-org/wasmd v0.30.0-ics-removed-genesis-checks/go.mod h1:umLGeYyowAMMEdOYfDOf8jsDrQ75Qkm1+ogBXT/w01c=
+github.com/neutron-org/wasmd v0.31.0-neutron-fixes h1:XvxPbxdtfWl/uH6eeZkN6FmfZbySjsToM6lIR/umNUE=
+github.com/neutron-org/wasmd v0.31.0-neutron-fixes/go.mod h1:VcyDGk/ISVlMUeW+1GGL0zdHWBS2FPwLEV2qZ86l7l8=
 github.com/niemeyer/pretty v0.0.0-20200227124842-a10e7caefd8e/go.mod h1:zD1mROLANZcx1PVRCS0qkT7pwLkGfwJo4zjcN/Tysno=
 github.com/nishanths/exhaustive v0.8.3/go.mod h1:qj+zJJUgJ76tR92+25+03oYUhzF4R7/2Wk7fGTfCHmg=
 github.com/nishanths/predeclared v0.0.0-20190419143655-18a43bb90ffc/go.mod h1:62PewwiQTlm/7Rj+cxVYqZvDIUc+JjZq6GHAC1fsObQ=
diff --git a/network/init-neutrond.sh b/network/init-neutrond.sh
index 352fb0d1e..b8400499c 100755
--- a/network/init-neutrond.sh
+++ b/network/init-neutrond.sh
@@ -21,7 +21,6 @@ PROPOSAL_MULTIPLE_CONTRACT=$CONTRACTS_BINARIES_DIR/cwd_proposal_multiple.wasm
 VOTING_REGISTRY_CONTRACT=$CONTRACTS_BINARIES_DIR/neutron_voting_registry.wasm
 # VAULTS
 NEUTRON_VAULT_CONTRACT=$CONTRACTS_BINARIES_DIR/neutron_vault.wasm
-LOCKDROP_VAULT_CONTRACT=$CONTRACTS_BINARIES_DIR/lockdrop_vault.wasm
 # TREASURY
 RESERVE_CONTRACT=$CONTRACTS_BINARIES_DIR/neutron_reserve.wasm
 DISTRIBUTION_CONTRACT=$CONTRACTS_BINARIES_DIR/neutron_distribution.wasm
@@ -105,11 +104,6 @@ DAO_VOTING_REGISTRY_LABEL="neutron voting registry"
 NEUTRON_VAULT_NAME="voting vault"
 NEUTRON_VAULT_DESCRIPTION="simple voting vault for testing purposes"
 
-
-## Lockdrop vault
-LOCKDROP_VAULT_NAME="lockdrop vault"
-LOCKDROP_VAULT_DESCRIPTION="simple voting vault for testing purposes"
-
 ## Basic vault
 NEUTRON_VAULT_NAME="voting vault"
 NEUTRON_VAULT_DESCRIPTION="simple voting vault for testing purposes"
@@ -128,12 +122,11 @@ GRANTS_SUBDAO_VOTING_MODULE_LABEL="grants voting module"
 GRANTS_SUBDAO_PROPOSAL_LABEL="grants single proposal"
 
 ## Timelock
-GRANTS_SUBDAO_TIMELOCK_DURATION=1200
 GRANTS_SUBDAO_TIMELOCK_LABEL="subDAO timelock contract"
 
 ## Security subdao
-SECURITY_SUBDAO_CORE_LABEL="neutron grants subdao"
-SECURITY_SUBDAO_CORE_NAME="GRANTS"
+SECURITY_SUBDAO_CORE_LABEL="neutron security subdao"
+SECURITY_SUBDAO_CORE_NAME="SECURITY"
 SECURITY_SUBDAO_CORE_DESCRIPTION="subdao that secures neutron"
 SECURITY_SUBDAO_PROPOSAL_LABEL="security subdao single proposal"
 SECURITY_SUBDAO_PREPROPOSAL_LABEL="security prerpopose"
@@ -160,7 +153,6 @@ PROPOSAL_MULTIPLE_CONTRACT_BINARY_ID=$(store_binary     "$PROPOSAL_MULTIPLE_CONT
 VOTING_REGISTRY_CONTRACT_BINARY_ID=$(store_binary       "$VOTING_REGISTRY_CONTRACT")
 # VAULTS
 NEUTRON_VAULT_CONTRACT_BINARY_ID=$(store_binary         "$NEUTRON_VAULT_CONTRACT")
-LOCKDROP_VAULT_CONTRACT_BINARY_ID=$(store_binary        "$LOCKDROP_VAULT_CONTRACT")
 # TREASURY & RESERVE
 TREASURY_CONTRACT_BINARY_ID=$(store_binary              "$TREASURY_CONTRACT")
 DISTRIBUTION_CONTRACT_BINARY_ID=$(store_binary          "$DISTRIBUTION_CONTRACT")
@@ -184,7 +176,6 @@ INSTANCE_ID_COUNTER=1
 
 # VAULTS
 NEUTRON_VAULT_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"             "$NEUTRON_VAULT_CONTRACT_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
-LOCKDROP_VAULT_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"            "$LOCKDROP_VAULT_CONTRACT_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
 
 # MAIN_DAO
 DAO_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"                       "$DAO_CONTRACT_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
@@ -202,8 +193,8 @@ DISTRIBUTION_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTAN
 TREASURY_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"                  "$TREASURY_CONTRACT_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
 # SUBDAOS
 SECURITY_SUBDAO_CORE_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"      "$SUBDAO_CORE_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
-SECURITY_SUBDAO_PRE_PROPOSE_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER" "$PRE_PROPOSAL_CONTRACT_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
 SECURITY_SUBDAO_PROPOSAL_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"  "$SUBDAO_PROPOSAL_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
+SECURITY_SUBDAO_PRE_PROPOSE_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"  "$SUBDAO_PROPOSAL_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
 SECURITY_SUBDAO_VOTING_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"    "$CW4_VOTING_CONTRACT_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
 SECURITY_SUBDAO_GROUP_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"     "$CW4_GROUP_CONTRACT_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
 GRANTS_SUBDAO_CORE_CONTRACT_ADDRESS=$($BINARY debug generate-contract-address "$INSTANCE_ID_COUNTER"        "$SUBDAO_CORE_BINARY_ID") && (( INSTANCE_ID_COUNTER++ ))
@@ -341,8 +332,7 @@ VOTING_REGISTRY_INIT_MSG='{
     }
   },
   "voting_vaults": [
-    "'"$NEUTRON_VAULT_CONTRACT_ADDRESS"'",
-    "'"$LOCKDROP_VAULT_CONTRACT_ADDRESS"'"
+    "'"$NEUTRON_VAULT_CONTRACT_ADDRESS"'"
   ]
 }'
 VOTING_REGISTRY_INIT_MSG_BASE64=$(echo "$VOTING_REGISTRY_INIT_MSG" | base64 | tr -d "\n")
@@ -423,18 +413,6 @@ NEUTRON_VAULT_INIT='{
   "description": "'"$NEUTRON_VAULT_DESCRIPTION"'"
 }'
 
-# since the lockdrop_contract is still a mock, the address is a random valid one just to pass instantiation TODO: get rid of mock
-LOCKDROP_VAULT_INIT='{
-  "owner": {
-    "address": {
-      "addr": "'"$ADMIN_ADDRESS"'"
-    }
-  },
-  "name": "'"$LOCKDROP_VAULT_NAME"'",
-  "description": "'"$LOCKDROP_VAULT_DESCRIPTION"'",
-  "lockdrop_contract": "neutron17zayzl5d0daqa89csvv8kqayxzke6jd6zh00tq"
-}'
-
 # CW4 MODULES FOR SUBDAOS
 
 CW4_VOTE_INIT_MSG='{
@@ -519,7 +497,7 @@ SECURITY_SUBDAO_CORE_INIT_MSG='{
 # GRANTS_SUBDAO
 
 GRANTS_SUBDAO_TIMELOCK_INIT_MSG='{
-  "timelock_duration": '"$GRANTS_SUBDAO_TIMELOCK_DURATION"'
+  "overrule_pre_propose": "'"$PROPOSAL_OVERRULE_CONTRACT_ADDRESS"'"
 }'
 GRANTS_SUBDAO_TIMELOCK_INIT_MSG_BASE64=$(echo "$GRANTS_SUBDAO_TIMELOCK_INIT_MSG" | base64 | tr -d "\n")
 
@@ -603,7 +581,6 @@ echo "Instantiate contracts"
 # It affects the section of predicting contracts addresses at the beginning of the script
 # If you're to do any changes, please do it consistently in both sections
 $BINARY add-wasm-message instantiate-contract "$NEUTRON_VAULT_CONTRACT_BINARY_ID"   "$NEUTRON_VAULT_INIT"             --label "DAO_Neutron_voting_vault"    --run-as "$ADMIN_ADDRESS" --admin "$DAO_CONTRACT_ADDRESS" --home "$CHAIN_DIR"
-$BINARY add-wasm-message instantiate-contract "$LOCKDROP_VAULT_CONTRACT_BINARY_ID"  "$LOCKDROP_VAULT_INIT"            --label "DAO_Neutron_lockdrop_vault"  --run-as "$ADMIN_ADDRESS" --admin "$DAO_CONTRACT_ADDRESS" --home "$CHAIN_DIR"
 $BINARY add-wasm-message instantiate-contract "$DAO_CONTRACT_BINARY_ID"             "$DAO_INIT"                       --label "DAO"                         --run-as "$ADMIN_ADDRESS" --admin "$DAO_CONTRACT_ADDRESS" --home "$CHAIN_DIR"
 $BINARY add-wasm-message instantiate-contract "$RESERVE_CONTRACT_BINARY_ID"         "$RESERVE_INIT"                   --label "Reserve"                     --run-as "$ADMIN_ADDRESS" --admin "$DAO_CONTRACT_ADDRESS" --home "$CHAIN_DIR"
 $BINARY add-wasm-message instantiate-contract "$DISTRIBUTION_CONTRACT_BINARY_ID"    "$DISTRIBUTION_INIT"              --label "Distribution"                --run-as "$ADMIN_ADDRESS" --admin "$DAO_CONTRACT_ADDRESS" --home "$CHAIN_DIR"
diff --git a/x/interchaintxs/keeper/ibc_handlers.go b/x/interchaintxs/keeper/ibc_handlers.go
index a3c680d20..7644b0447 100644
--- a/x/interchaintxs/keeper/ibc_handlers.go
+++ b/x/interchaintxs/keeper/ibc_handlers.go
@@ -78,6 +78,8 @@ func (k *Keeper) HandleAcknowledgement(ctx sdk.Context, packet channeltypes.Pack
 	cacheCtx, writeFn, newGasMeter := k.createCachedContext(ctx)
 	defer k.outOfGasRecovery(ctx, newGasMeter, icaOwner.GetContract(), packet, "ack")
 
+	k.feeKeeper.DistributeAcknowledgementFee(ctx, relayer, feetypes.NewPacketID(packet.SourcePort, packet.SourceChannel, packet.Sequence))
+
 	// Actually we have only one kind of error returned from acknowledgement
 	// maybe later we'll retrieve actual errors from events
 	errorText := ack.GetError()
@@ -87,8 +89,6 @@ func (k *Keeper) HandleAcknowledgement(ctx sdk.Context, packet channeltypes.Pack
 		_, err = k.contractManagerKeeper.SudoResponse(cacheCtx, icaOwner.GetContract(), packet, ack.GetResult())
 	}
 
-	k.feeKeeper.DistributeAcknowledgementFee(ctx, relayer, feetypes.NewPacketID(packet.SourcePort, packet.SourceChannel, packet.Sequence))
-
 	if err != nil {
 		k.contractManagerKeeper.AddContractFailure(ctx, packet.SourceChannel, icaOwner.GetContract().String(), packet.GetSequence(), "ack")
 		k.Logger(ctx).Debug("HandleAcknowledgement: failed to Sudo contract on packet acknowledgement", "error", err)
@@ -117,6 +117,8 @@ func (k *Keeper) HandleTimeout(ctx sdk.Context, packet channeltypes.Packet, rela
 	cacheCtx, writeFn, newGasMeter := k.createCachedContext(ctx)
 	defer k.outOfGasRecovery(ctx, newGasMeter, icaOwner.GetContract(), packet, "timeout")
 
+	k.feeKeeper.DistributeTimeoutFee(ctx, relayer, feetypes.NewPacketID(packet.SourcePort, packet.SourceChannel, packet.Sequence))
+
 	_, err = k.contractManagerKeeper.SudoTimeout(cacheCtx, icaOwner.GetContract(), packet)
 	if err != nil {
 		k.contractManagerKeeper.AddContractFailure(ctx, packet.SourceChannel, icaOwner.GetContract().String(), packet.GetSequence(), "timeout")
@@ -125,7 +127,6 @@ func (k *Keeper) HandleTimeout(ctx sdk.Context, packet channeltypes.Packet, rela
 		writeFn()
 	}
 
-	k.feeKeeper.DistributeTimeoutFee(ctx, relayer, feetypes.NewPacketID(packet.SourcePort, packet.SourceChannel, packet.Sequence))
 	ctx.GasMeter().ConsumeGas(newGasMeter.GasConsumed(), "consume from cached context")
 
 	return nil
diff --git a/x/interchaintxs/keeper/ibc_handlers_test.go b/x/interchaintxs/keeper/ibc_handlers_test.go
index d755a8b30..8781189c1 100644
--- a/x/interchaintxs/keeper/ibc_handlers_test.go
+++ b/x/interchaintxs/keeper/ibc_handlers_test.go
@@ -8,13 +8,14 @@ import (
 	icatypes "github.com/cosmos/ibc-go/v4/modules/apps/27-interchain-accounts/types"
 	channeltypes "github.com/cosmos/ibc-go/v4/modules/core/04-channel/types"
 	"github.com/golang/mock/gomock"
+	"github.com/stretchr/testify/require"
+
 	"github.com/neutron-org/neutron/testutil"
 	testkeeper "github.com/neutron-org/neutron/testutil/interchaintxs/keeper"
 	mock_types "github.com/neutron-org/neutron/testutil/mocks/interchaintxs/types"
 	"github.com/neutron-org/neutron/x/contractmanager/types"
 	feetypes "github.com/neutron-org/neutron/x/feerefunder/types"
 	"github.com/neutron-org/neutron/x/interchaintxs/keeper"
-	"github.com/stretchr/testify/require"
 )
 
 func TestHandleAcknowledgement(t *testing.T) {
@@ -78,7 +79,7 @@ func TestHandleAcknowledgement(t *testing.T) {
 		ctx.GasMeter().ConsumeGas(ctx.GasMeter().Limit()+1, "out of gas test")
 	}).Return(nil, fmt.Errorf("SudoError error"))
 	cmKeeper.EXPECT().AddContractFailure(ctx, "channel-0", contractAddress.String(), p.GetSequence(), "ack")
-	// feeKeeper.EXPECT().DistributeAcknowledgementFee(ctx, relayerAddress, feetypes.NewPacketID(p.SourcePort, p.SourceChannel, p.Sequence))
+	feeKeeper.EXPECT().DistributeAcknowledgementFee(ctx, relayerAddress, feetypes.NewPacketID(p.SourcePort, p.SourceChannel, p.Sequence))
 	err = icak.HandleAcknowledgement(ctx, p, errAckData, relayerAddress)
 	require.NoError(t, err)
 
@@ -104,7 +105,7 @@ func TestHandleAcknowledgement(t *testing.T) {
 	cmKeeper.EXPECT().SudoResponse(gomock.AssignableToTypeOf(lowGasCtx), contractAddress, p, resACK.GetResult()).Do(func(cachedCtx sdk.Context, senderAddress sdk.AccAddress, request channeltypes.Packet, msg []byte) {
 		cachedCtx.GasMeter().ConsumeGas(1, "Sudo response consumption")
 	}).Return(nil, nil)
-	// feeKeeper.EXPECT().DistributeAcknowledgementFee(lowGasCtx, relayerAddress, feetypes.NewPacketID(p.SourcePort, p.SourceChannel, p.Sequence))
+	feeKeeper.EXPECT().DistributeAcknowledgementFee(lowGasCtx, relayerAddress, feetypes.NewPacketID(p.SourcePort, p.SourceChannel, p.Sequence))
 	cmKeeper.EXPECT().AddContractFailure(lowGasCtx, "channel-0", contractAddress.String(), p.GetSequence(), "ack").Do(func(ctx sdk.Context, channelId string, address string, ackID uint64, ackType string) {
 		ctx.GasMeter().ConsumeGas(keeper.GasReserve, "out of gas")
 	})
@@ -157,7 +158,7 @@ func TestHandleTimeout(t *testing.T) {
 		ctx.GasMeter().ConsumeGas(ctx.GasMeter().Limit()+1, "out of gas test")
 	}).Return(nil, fmt.Errorf("SudoTimeout error"))
 	cmKeeper.EXPECT().AddContractFailure(ctx, "channel-0", contractAddress.String(), p.GetSequence(), "timeout")
-	// feeKeeper.EXPECT().DistributeTimeoutFee(ctx, relayerAddress, feetypes.NewPacketID(p.SourcePort, p.SourceChannel, p.Sequence))
+	feeKeeper.EXPECT().DistributeTimeoutFee(ctx, relayerAddress, feetypes.NewPacketID(p.SourcePort, p.SourceChannel, p.Sequence))
 	err = icak.HandleTimeout(ctx, p, relayerAddress)
 	require.NoError(t, err)
 }