diff --git a/contrib/images/ibcsim-bcd/setup-bcd.sh b/contrib/images/ibcsim-bcd/setup-bcd.sh
index 63bb181..d91cb01 100755
--- a/contrib/images/ibcsim-bcd/setup-bcd.sh
+++ b/contrib/images/ibcsim-bcd/setup-bcd.sh
@@ -3,7 +3,16 @@
 display_usage() {
 	echo "Missing parameters. Please check if all parameters were specified."
 	echo "Usage: setup-bcd.sh [CHAIN_ID] [CHAIN_DIR] [RPC_PORT] [P2P_PORT] [PROFILING_PORT] [GRPC_PORT] [BABYLON_CONTRACT_CODE_FILE] [BTCSTAKING_CONTRACT_CODE_FILE] [BTCFINALITY_CONTRACT_CODE_FILE] [INSTANTIATING_CFG]"
-	echo "Example: setup-bcd.sh test-chain-id ./data 26657 26656 6060 9090 ./babylon_contract.wasm '{"btc_confirmation_depth":1,"checkpoint_finalization_timeout":2,"network":"Regtest","babylon_tag":"bbn0", "notify_cosmos_zone":false, "btc_staking_code_id":2}'"
+	echo "Example: setup-bcd.sh test-chain-id ./data 26657 26656 6060 9090 ./babylon_contract.wasm ./btc_staking.wasm ./btc_finality.wasm '{
+  "btc_confirmation_depth": 1,
+  "checkpoint_finalization_timeout": 2,
+  "network": "Regtest",
+  "babylon_tag": "01020304",
+  "notify_cosmos_zone": false,
+  "btc_staking_code_id": 2,
+  "btc_finality_code_id": 3
+}'
+"
 	exit 1
 }
 
@@ -105,7 +114,7 @@ sed -i 's/"btc_finality_contract_address": ""/"btc_finality_contract_address": "
 
 # Start
 echo "Starting $BINARY..."
-$BINARY --home $CHAINDIR/$CHAINID start --pruning=nothing --grpc-web.enable=false --grpc.address="0.0.0.0:$GRPCPORT" --log_level trace --trace --log_format 'plain' 2>&1 | tee $CHAINDIR/$CHAINID.log &
+$BINARY --home $CHAINDIR/$CHAINID start --pruning=nothing --grpc-web.enable=false --grpc.address="0.0.0.0:$GRPCPORT" --log_level trace --trace --log_format 'plain' --log_no_color 2>&1 | tee $CHAINDIR/$CHAINID.log &
 sleep 20
 
 # upload contract code
diff --git a/contrib/images/ibcsim-bcd/wrapper.sh b/contrib/images/ibcsim-bcd/wrapper.sh
index 2ebd636..288825b 100755
--- a/contrib/images/ibcsim-bcd/wrapper.sh
+++ b/contrib/images/ibcsim-bcd/wrapper.sh
@@ -1,4 +1,5 @@
 #!/usr/bin/env sh
+# shellcheck disable=SC3037
 
 # 0. Define configuration
 BABYLON_KEY="babylon-key"
@@ -7,19 +8,41 @@ CONSUMER_KEY="bcd-key"
 CONSUMER_CHAIN_ID="bcd-test"
 
 # 1. Create a bcd testnet with Babylon contract
-./setup-bcd.sh $CONSUMER_CHAIN_ID $CONSUMER_CONF 26657 26656 6060 9090 ./babylon_contract.wasm ./btc_staking.wasm ./btc_finality.wasm '{
-    "network": "regtest",
-    "babylon_tag": "01020304",
-    "btc_confirmation_depth": 1,
-    "checkpoint_finalization_timeout": 2,
-    "notify_cosmos_zone": false,
-    "btc_staking_code_id": 2,
-    "consumer_name": "Test Consumer",
-    "consumer_description": "Test Consumer Description",
-    "btc_finality_code_id": 3
+FINALITY_MSG='{
+  "params": {
+    "max_active_finality_providers": 100,
+    "min_pub_rand": 1,
+    "finality_inflation_rate": "0.035",
+    "epoch_length": 10
+  }
 }'
+echo "btc-finality instantiation msg:"
+echo -n "$FINALITY_MSG" | jq '.'
+ENCODED_FINALITY_MSG=$(echo -n "$FINALITY_MSG" | base64 -w0)
+BABYLON_MSG="{
+    \"network\": \"regtest\",
+    \"babylon_tag\": \"01020304\",
+    \"btc_confirmation_depth\": 1,
+    \"checkpoint_finalization_timeout\": 2,
+    \"notify_cosmos_zone\": false,
+    \"btc_staking_code_id\": 2,
+    \"consumer_name\": \"Test Consumer\",
+    \"consumer_description\": \"Test Consumer Description\",
+    \"btc_finality_code_id\": 3,
+    \"btc_finality_msg\": \"$ENCODED_FINALITY_MSG\",
+    \"transfer_info\": {
+      \"channel_id\": \"channel-1\",
+      \"recipient\": {
+        \"module_addr\": \"zoneconcierge\"
+      }
+    }
+}"
+echo "babylon-contract instantiation msg:"
+echo -n "$BABYLON_MSG" | jq '.'
 
-sleep 10
+./setup-bcd.sh $CONSUMER_CHAIN_ID $CONSUMER_CONF 26657 26656 6060 9090 ./babylon_contract.wasm ./btc_staking.wasm ./btc_finality.wasm "$BABYLON_MSG"
+
+sleep 5
 
 CONTRACT_ADDRESS=$(bcd query wasm list-contract-by-code 1 | grep bbnc | cut -d' ' -f2)
 CONTRACT_PORT="wasm.$CONTRACT_ADDRESS"
@@ -91,9 +114,10 @@ rly --home $RELAYER_CONF_DIR keys restore babylon $BABYLON_KEY "$BABYLON_MEMO"
 sleep 10
 
 # 3. Start relayer
-echo "Creating an IBC light clients, connection, and channel between the two CZs"
+echo "Creating IBC light clients, connection, and channels between the two CZs"
 rly --home $RELAYER_CONF_DIR tx link bcd --src-port zoneconcierge --dst-port $CONTRACT_PORT --order ordered --version zoneconcierge-1
-echo "Created IBC channel successfully!"
+[ $? -eq 0 ] && echo "Created custom IBC channel successfully!" || echo "Error creating custom IBC channel"
+rly --home $RELAYER_CONF_DIR tx link bcd --src-port transfer --dst-port transfer --order unordered --version ics20-1 &
 
 sleep 10
 
diff --git a/go.work.sum b/go.work.sum
index 3731230..fb7dbec 100644
--- a/go.work.sum
+++ b/go.work.sum
@@ -797,6 +797,7 @@ github.com/golang-sql/sqlexp v0.0.0-20170517235910-f1bb20e5a188/go.mod h1:vXjM/+
 github.com/golang/freetype v0.0.0-20170609003504-e2365dfdc4a0 h1:DACJavvAHhabrF08vX0COfcOBJRhZ8lUbR+ZWIs0Y5g=
 github.com/golang/glog v1.1.2/go.mod h1:zR+okUeTbrL6EL3xHUDxZuEtGv04p5shwip1+mL/rLQ=
 github.com/golang/glog v1.2.0/go.mod h1:6AhwSGph0fcJtXVM/PEHPqZlFeoLxhs7/t5UDAwmO+w=
+github.com/golang/glog v1.2.2 h1:1+mZ9upx1Dh6FmUTFR1naJ77miKiXgALjWOZ3NVFPmY=
 github.com/golang/glog v1.2.2/go.mod h1:6AhwSGph0fcJtXVM/PEHPqZlFeoLxhs7/t5UDAwmO+w=
 github.com/golang/groupcache v0.0.0-20190129154638-5b532d6fd5ef/go.mod h1:cIg4eruTrX1D+g88fzRXU5OdNfaM+9IcxsU14FzY7Hc=
 github.com/golangci/check v0.0.0-20180506172741-cfe4005ccda2 h1:23T5iq8rbUYlhpt5DB4XJkc6BU31uODLD1o1gKvZmD0=
diff --git a/tests/e2e/bcd_consumer_integration_test.go b/tests/e2e/bcd_consumer_integration_test.go
index 61307fe..18ee311 100644
--- a/tests/e2e/bcd_consumer_integration_test.go
+++ b/tests/e2e/bcd_consumer_integration_test.go
@@ -33,6 +33,7 @@ import (
 	bsctypes "github.com/babylonlabs-io/babylon/x/btcstkconsumer/types"
 	ckpttypes "github.com/babylonlabs-io/babylon/x/checkpointing/types"
 	ftypes "github.com/babylonlabs-io/babylon/x/finality/types"
+	zctypes "github.com/babylonlabs-io/babylon/x/zoneconcierge/types"
 	"github.com/btcsuite/btcd/btcec/v2"
 	"github.com/btcsuite/btcd/chaincfg"
 	"github.com/btcsuite/btcd/wire"
@@ -63,6 +64,19 @@ var (
 	czDelBtcSk, czDelBtcPk, _ = datagen.GenRandomBTCKeyPair(r)
 )
 
+func getFirstIBCDenom(balance sdk.Coins) string {
+	// Look up the ugly IBC denom
+	denoms := balance.Denoms()
+	var denomB string
+	for _, d := range denoms {
+		if strings.HasPrefix(d, "ibc/") {
+			denomB = d
+			break
+		}
+	}
+	return denomB
+}
+
 // TestBCDConsumerIntegrationTestSuite includes babylon<->bcd integration related tests
 func TestBCDConsumerIntegrationTestSuite(t *testing.T) {
 	suite.Run(t, new(BCDConsumerIntegrationTestSuite))
@@ -142,7 +156,7 @@ func (s *BCDConsumerIntegrationTestSuite) Test2RegisterAndIntegrateConsumer() {
 
 	// after the consumer is registered, wait till IBC connection/channel
 	// between babylon<->bcd is established
-	s.waitForIBCConnection()
+	s.waitForIBCConnections()
 }
 
 // Test3CreateConsumerFinalityProvider
@@ -152,6 +166,8 @@ func (s *BCDConsumerIntegrationTestSuite) Test2RegisterAndIntegrateConsumer() {
 func (s *BCDConsumerIntegrationTestSuite) Test3CreateConsumerFinalityProvider() {
 	// generate a random number of finality providers from 1 to 5
 	numConsumerFPs := datagen.RandomInt(r, 5) + 1
+	fmt.Println("Number of consumer finality providers: ", numConsumerFPs)
+
 	var consumerFps []*bstypes.FinalityProvider
 	for i := 0; i < int(numConsumerFPs); i++ {
 		consumerFp, SK, PK := s.createVerifyConsumerFP()
@@ -257,7 +273,7 @@ func (s *BCDConsumerIntegrationTestSuite) Test5ActivateDelegation() {
 	s.Eventually(func() bool {
 		dataFromContract, err = s.cosmwasmController.QueryDelegations()
 		return err == nil && dataFromContract != nil && len(dataFromContract.Delegations) == 1
-	}, time.Second*30, time.Second)
+	}, time.Second*60, time.Second)
 
 	// Assert delegation details
 	s.Empty(dataFromContract.Delegations[0].UndelegationInfo.DelegatorUnbondingInfo)
@@ -283,7 +299,7 @@ func (s *BCDConsumerIntegrationTestSuite) Test5ActivateDelegation() {
 	}, time.Minute, time.Second*5)
 }
 
-func (s *BCDConsumerIntegrationTestSuite) Test6ConsumerFPRewardsGeneration() {
+func (s *BCDConsumerIntegrationTestSuite) Test6ConsumerFPRewards() {
 	// Query consumer finality providers
 	consumerFp, err := s.babylonController.QueryConsumerFinalityProvider(consumerID, bbn.NewBIP340PubKeyFromBTCPK(czFpBTCPK).MarshalHex())
 	s.Require().NoError(err)
@@ -301,6 +317,11 @@ func (s *BCDConsumerIntegrationTestSuite) Test6ConsumerFPRewardsGeneration() {
 	s.NoError(err)
 	s.Empty(rewards)
 
+	// Check that there are no tokens in the module account
+	balance, err := s.babylonController.QueryModuleAccountBalances(zctypes.ModuleName)
+	s.NoError(err)
+	s.Empty(balance)
+
 	// Commit public randomness at the activated block height on the consumer chain
 	randListInfo, msgCommitPubRandList, err := datagen.GenRandomMsgCommitPubRandList(r, czFpBTCSK, uint64(czActivatedHeight), 100)
 	s.NoError(err)
@@ -342,18 +363,26 @@ func (s *BCDConsumerIntegrationTestSuite) Test6ConsumerFPRewardsGeneration() {
 	s.Equal(hex.EncodeToString(finalizedBlock.AppHash), hex.EncodeToString(czActivatedBlock.AppHash))
 	s.True(finalizedBlock.Finalized)
 
-	// Ensure consumer rewards are generated and sent to the staking contract
+	// Ensure consumer rewards are generated (initially sent to the finality contract,
+	// then sent to the Babylon contract, after Consumer-side distribution, and then sent to the Babylon zoneconcierge
+	// module account)
 	s.Eventually(func() bool {
-		rewards, err := s.cosmwasmController.QueryFinalityContractBalances()
+		balance, err := s.babylonController.QueryModuleAccountBalances(zctypes.ModuleName)
 		if err != nil {
-			s.T().Logf("failed to query rewards: %s", err.Error())
+			s.T().Logf("failed to query balance: %s", err.Error())
 			return false
 		}
-		if len(rewards) == 0 {
+		if len(balance) == 0 {
 			return false
 		}
-		fmt.Println("Consumer rewards: ", rewards)
-		return true
+		ibcDenom := getFirstIBCDenom(balance)
+		if ibcDenom == "" {
+			s.T().Logf("failed to get IBC denom")
+			return false
+		}
+		fmt.Printf("Balance of IBC denom '%s': %s\n", ibcDenom, balance.AmountOf(ibcDenom).String())
+		// Check that the balance of the IBC denom is greater than 0
+		return balance.AmountOf(ibcDenom).IsPositive()
 	}, 30*time.Second, time.Second*5)
 }
 
@@ -482,7 +511,7 @@ func (s *BCDConsumerIntegrationTestSuite) Test8ConsumerFPCascadedSlashing() {
 	s.Eventually(func() bool {
 		dataFromContract, err = s.cosmwasmController.QueryDelegations()
 		return err == nil && dataFromContract != nil && len(dataFromContract.Delegations) == 2
-	}, time.Second*20, time.Second)
+	}, time.Second*30, time.Second)
 
 	// query and assert consumer finality provider's voting power is equal to the total stake
 	s.Eventually(func() bool {
@@ -718,7 +747,7 @@ func (s *BCDConsumerIntegrationTestSuite) submitCovenantSigs(consumerFp *bsctype
 			return false
 		}
 		return activatedHeight != nil && activatedHeight.Height > 0
-	}, time.Minute, time.Second*5)
+	}, 90*time.Second, time.Second*5)
 }
 
 // helper function: createBabylonDelegation creates a random BTC delegation restaking to Babylon and consumer finality providers
@@ -784,7 +813,7 @@ func (s *BCDConsumerIntegrationTestSuite) createBabylonDelegation(babylonFp *bst
 	}
 	headers := make([]bbn.BTCHeaderBytes, 0)
 	headers = append(headers, blockWithStakingTx.HeaderBytes)
-	for i := 0; i < int(params.ComfirmationTimeBlocks); i++ {
+	for i := 0; i < int(params.ConfirmationTimeBlocks); i++ {
 		headerInfo := datagen.GenRandomValidBTCHeaderInfoWithParent(r, *parentBlockHeaderInfo)
 		headers = append(headers, *headerInfo.Header)
 		parentBlockHeaderInfo = headerInfo
@@ -984,6 +1013,7 @@ func (s *BCDConsumerIntegrationTestSuite) initCosmwasmController() error {
 		s.T().Fatalf("Failed to get current working directory: %v", err)
 	}
 
+	cfg.BabylonContractAddress = "bbnc14hj2tavq8fpesdwxxcu44rty3hh90vhujrvcmstl4zr3txmfvw9syx25zf"
 	cfg.BtcStakingContractAddress = "bbnc1nc5tatafv6eyq7llkr2gv50ff9e22mnf70qgjlv737ktmt4eswrqgn0kq0"
 	cfg.BtcFinalityContractAddress = "bbnc17p9rzwnnfxcjp32un9ug7yhhzgtkhvl9jfksztgw5uh69wac2pgssg3nft"
 	cfg.ChainID = "bcd-test"
@@ -1010,9 +1040,11 @@ func (s *BCDConsumerIntegrationTestSuite) initCosmwasmController() error {
 	return nil
 }
 
-// helper function: waitForIBCConnection waits for the IBC connection to be established between Babylon and the consumer.
-func (s *BCDConsumerIntegrationTestSuite) waitForIBCConnection() {
+// helper function: waitForIBCConnections waits for the IBC connections to be established between Babylon and the
+// Consumer.
+func (s *BCDConsumerIntegrationTestSuite) waitForIBCConnections() {
 	var babylonChannel *channeltypes.IdentifiedChannel
+	// Wait for the custom channel
 	s.Eventually(func() bool {
 		babylonChannelsResp, err := s.babylonController.IBCChannels()
 		if err != nil {
@@ -1025,13 +1057,13 @@ func (s *BCDConsumerIntegrationTestSuite) waitForIBCConnection() {
 		}
 		babylonChannel = babylonChannelsResp.Channels[0]
 		if babylonChannel.State != channeltypes.OPEN {
-			s.T().Logf("Babylon channel state is not OPEN, got %s", babylonChannel.State)
+			s.T().Logf("Babylon custom channel state is not OPEN, got %s", babylonChannel.State)
 			return false
 		}
 		s.Equal(channeltypes.ORDERED, babylonChannel.Ordering)
 		s.Contains(babylonChannel.Counterparty.PortId, "wasm.")
 		return true
-	}, time.Minute*3, time.Second*10, "Failed to get expected Babylon IBC channel")
+	}, time.Minute*4, time.Second*10, "Failed to get expected Babylon custom IBC channel")
 
 	var consumerChannel *channeltypes.IdentifiedChannel
 	s.Eventually(func() bool {
@@ -1049,15 +1081,49 @@ func (s *BCDConsumerIntegrationTestSuite) waitForIBCConnection() {
 		}
 		s.Equal(channeltypes.ORDERED, consumerChannel.Ordering)
 		s.Equal(babylonChannel.PortId, consumerChannel.Counterparty.PortId)
-		s.T().Logf("IBC channel established successfully")
+		s.T().Logf("IBC custom channel established successfully")
 		return true
-	}, time.Minute, time.Second*2, "Failed to get expected Consumer IBC channel")
+	}, time.Minute, time.Second*2, "Failed to get expected Consumer custom IBC channel")
 
-	// Query the channel client state
-	//babylonChannelState, err := s.babylonController.QueryChannelClientState(babylonChannel.ChannelId, babylonChannel.PortId)
-	//s.Require().NoError(err, "Failed to query Babylon channel client state")
-	//
-	//return babylonChannelState.IdentifiedClientState.ClientId
+	// Wait for the transfer channel
+	s.Eventually(func() bool {
+		babylonChannelsResp, err := s.babylonController.IBCChannels()
+		if err != nil {
+			s.T().Logf("Error querying Babylon IBC channels: %v", err)
+			return false
+		}
+		if len(babylonChannelsResp.Channels) != 2 {
+			s.T().Logf("Expected 2 Babylon IBC channels, got %d", len(babylonChannelsResp.Channels))
+			return false
+		}
+		babylonChannel = babylonChannelsResp.Channels[0]
+		if babylonChannel.State != channeltypes.OPEN {
+			s.T().Logf("Babylon transfer channel state is not OPEN, got %s", babylonChannel.State)
+			return false
+		}
+		s.Equal(channeltypes.UNORDERED, babylonChannel.Ordering)
+		s.Contains(babylonChannel.Counterparty.PortId, "transfer")
+		return true
+	}, time.Minute*3, time.Second*10, "Failed to get expected Babylon transfer IBC channel")
+
+	s.Eventually(func() bool {
+		consumerChannelsResp, err := s.cosmwasmController.IBCChannels()
+		if err != nil {
+			s.T().Logf("Error querying Consumer IBC channels: %v", err)
+			return false
+		}
+		if len(consumerChannelsResp.Channels) != 2 {
+			return false
+		}
+		consumerChannel = consumerChannelsResp.Channels[0]
+		if consumerChannel.State != channeltypes.OPEN {
+			return false
+		}
+		s.Equal(channeltypes.UNORDERED, consumerChannel.Ordering)
+		s.Equal(babylonChannel.PortId, consumerChannel.Counterparty.PortId)
+		s.T().Logf("IBC transfer channel established successfully")
+		return true
+	}, time.Minute, time.Second*2, "Failed to get expected Consumer transfer IBC channel")
 }
 
 // helper function: verifyConsumerRegistration verifies the automatic registration of a consumer
diff --git a/tests/e2e/cosmos-integration-e2e/clientcontroller/babylon/babylon.go b/tests/e2e/cosmos-integration-e2e/clientcontroller/babylon/babylon.go
index 9eafb5e..d891a56 100644
--- a/tests/e2e/cosmos-integration-e2e/clientcontroller/babylon/babylon.go
+++ b/tests/e2e/cosmos-integration-e2e/clientcontroller/babylon/babylon.go
@@ -12,7 +12,13 @@ import (
 	"context"
 	"fmt"
 	"github.com/babylonlabs-io/babylon-sdk/tests/e2e/cosmos-integration-e2e/clientcontroller/types"
+	"github.com/cosmos/cosmos-sdk/codec"
+	authtypes "github.com/cosmos/cosmos-sdk/x/auth/types"
+	banktypes "github.com/cosmos/cosmos-sdk/x/bank/types"
+	"google.golang.org/grpc"
+	"google.golang.org/grpc/credentials/insecure"
 	"math/rand"
+	"net/url"
 
 	sdkErr "cosmossdk.io/errors"
 	"cosmossdk.io/math"
@@ -521,7 +527,7 @@ func (bc *BabylonController) QueryStakingParams() (*types.StakingParams, error)
 	}
 
 	return &types.StakingParams{
-		ComfirmationTimeBlocks:    ckptParamRes.Params.BtcConfirmationDepth,
+		ConfirmationTimeBlocks:    ckptParamRes.Params.BtcConfirmationDepth,
 		FinalizationTimeoutBlocks: ckptParamRes.Params.CheckpointFinalizationTimeout,
 		MinSlashingTxFeeSat:       btcutil.Amount(stakingParamRes.Params.MinSlashingTxFeeSat),
 		CovenantPks:               covenantPks,
@@ -706,3 +712,48 @@ func (bc *BabylonController) QueryChannelClientState(channelID, portID string) (
 
 	return resp, err
 }
+
+func (bc *BabylonController) QueryModuleAccountBalances(module string) (sdk.Coins, error) {
+	moduleAccountAddress := sdk.MustBech32ifyAddressBytes(bc.cfg.AccountPrefix, authtypes.NewModuleAddress(module))
+	return bc.QueryBalances(moduleAccountAddress)
+}
+
+// QueryBalances returns balances at the address
+func (bc *BabylonController) QueryBalances(address string) (sdk.Coins, error) {
+	grpcConn, err := bc.createGrpcConnection()
+	if err != nil {
+		return nil, err
+	}
+	defer grpcConn.Close()
+
+	// create a gRPC client to query the x/bank service.
+	bankClient := banktypes.NewQueryClient(grpcConn)
+	bankRes, err := bankClient.AllBalances(
+		context.Background(),
+		&banktypes.QueryAllBalancesRequest{Address: address},
+	)
+	if err != nil {
+		return nil, err
+	}
+	return bankRes.GetBalances(), nil
+}
+
+func (bc *BabylonController) createGrpcConnection() (*grpc.ClientConn, error) {
+	// Create a connection to the gRPC server.
+	parsedUrl, err := url.Parse(bc.cfg.GRPCAddr)
+	if err != nil {
+		return nil, fmt.Errorf("grpc-address is not correctly formatted: %w", err)
+	}
+	endpoint := fmt.Sprintf("%s:%s", parsedUrl.Hostname(), parsedUrl.Port())
+	grpcConn, err := grpc.NewClient(
+		endpoint,
+		grpc.WithTransportCredentials(insecure.NewCredentials()), // The Cosmos SDK doesn't support any transport security mechanism.
+		// This instantiates a general gRPC codec which handles proto bytes. We pass in a nil interface registry
+		// if the request/response types contain interface instead of 'nil' you should pass the application specific codec.
+		grpc.WithDefaultCallOptions(grpc.ForceCodec(codec.NewProtoCodec(nil).GRPCCodec())),
+	)
+	if err != nil {
+		return nil, err
+	}
+	return grpcConn, nil
+}
diff --git a/tests/e2e/cosmos-integration-e2e/clientcontroller/config/cosmwasm.go b/tests/e2e/cosmos-integration-e2e/clientcontroller/config/cosmwasm.go
index 9c5909a..fc62f67 100644
--- a/tests/e2e/cosmos-integration-e2e/clientcontroller/config/cosmwasm.go
+++ b/tests/e2e/cosmos-integration-e2e/clientcontroller/config/cosmwasm.go
@@ -25,6 +25,7 @@ type CosmwasmConfig struct {
 	BlockTimeout               time.Duration `long:"block-timeout" description:"block timeout when waiting for block events"`
 	OutputFormat               string        `long:"output-format" description:"default output when printint responses"`
 	SignModeStr                string        `long:"sign-mode" description:"sign mode to use"`
+	BabylonContractAddress     string        `long:"babylon-contract-address" description:"address of the Babylon contract"`
 	BtcStakingContractAddress  string        `long:"btc-staking-contract-address" description:"address of the BTC staking contract"`
 	BtcFinalityContractAddress string        `long:"btc-finality-contract-address" description:"address of the BTC finality contract"`
 }
@@ -46,7 +47,15 @@ func (cfg *CosmwasmConfig) Validate() error {
 		return fmt.Errorf("block-timeout can't be negative")
 	}
 
-	_, _, err := bech32.Decode(cfg.BtcStakingContractAddress, len(cfg.BtcStakingContractAddress))
+	_, _, err := bech32.Decode(cfg.BabylonContractAddress, len(cfg.BabylonContractAddress))
+	if err != nil {
+		return fmt.Errorf("babylon-contract-address: invalid bech32 address: %w", err)
+	}
+	if !strings.HasPrefix(cfg.BabylonContractAddress, cfg.AccountPrefix) {
+		return fmt.Errorf("babylon-contract-address: invalid address prefix: %w", err)
+	}
+
+	_, _, err = bech32.Decode(cfg.BtcStakingContractAddress, len(cfg.BtcStakingContractAddress))
 	if err != nil {
 		return fmt.Errorf("btc-staking-contract-address: invalid bech32 address: %w", err)
 	}
@@ -79,6 +88,7 @@ func DefaultCosmwasmConfig() *CosmwasmConfig {
 		BlockTimeout:               1 * time.Minute,
 		OutputFormat:               "direct",
 		SignModeStr:                "",
+		BabylonContractAddress:     "",
 		BtcStakingContractAddress:  "",
 		BtcFinalityContractAddress: "",
 	}
diff --git a/tests/e2e/cosmos-integration-e2e/clientcontroller/cosmwasm/cosmwasm.go b/tests/e2e/cosmos-integration-e2e/clientcontroller/cosmwasm/cosmwasm.go
index 3f88f44..057cfe3 100644
--- a/tests/e2e/cosmos-integration-e2e/clientcontroller/cosmwasm/cosmwasm.go
+++ b/tests/e2e/cosmos-integration-e2e/clientcontroller/cosmwasm/cosmwasm.go
@@ -584,6 +584,10 @@ func (cc *CosmwasmConsumerController) QueryDelegations() (*ConsumerDelegationsRe
 	return &resp, nil
 }
 
+func (cc *CosmwasmConsumerController) QueryBabylonContractBalances() (sdk.Coins, error) {
+	return cc.QueryBalances(cc.cfg.BabylonContractAddress)
+}
+
 func (cc *CosmwasmConsumerController) QueryFinalityContractBalances() (sdk.Coins, error) {
 	return cc.QueryBalances(cc.cfg.BtcFinalityContractAddress)
 }
diff --git a/tests/e2e/cosmos-integration-e2e/clientcontroller/types/stakingparams.go b/tests/e2e/cosmos-integration-e2e/clientcontroller/types/stakingparams.go
index 9d91c43..4d43e8b 100644
--- a/tests/e2e/cosmos-integration-e2e/clientcontroller/types/stakingparams.go
+++ b/tests/e2e/cosmos-integration-e2e/clientcontroller/types/stakingparams.go
@@ -8,7 +8,7 @@ import (
 
 type StakingParams struct {
 	// K-deep
-	ComfirmationTimeBlocks uint32
+	ConfirmationTimeBlocks uint32
 	// W-deep
 	FinalizationTimeoutBlocks uint32
 
diff --git a/tests/testdata/babylon_contract.wasm b/tests/testdata/babylon_contract.wasm
index 8420796..1d0047a 100644
Binary files a/tests/testdata/babylon_contract.wasm and b/tests/testdata/babylon_contract.wasm differ
diff --git a/tests/testdata/btc_finality.wasm b/tests/testdata/btc_finality.wasm
index 1266820..c0343f1 100644
Binary files a/tests/testdata/btc_finality.wasm and b/tests/testdata/btc_finality.wasm differ
diff --git a/tests/testdata/btc_staking.wasm b/tests/testdata/btc_staking.wasm
index 873274e..1a88ff9 100644
Binary files a/tests/testdata/btc_staking.wasm and b/tests/testdata/btc_staking.wasm differ
diff --git a/tests/testdata/version.txt b/tests/testdata/version.txt
index c08d334..f27b84a 100644
--- a/tests/testdata/version.txt
+++ b/tests/testdata/version.txt
@@ -1 +1 @@
-84130eb706e1fb60e16cecf9ce8ade94b66ffa62
+9fdc9a15de1f082bc0a0686fe4be6bf320a03a53