diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7288975cebf4..ce85e98b7fd2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -102,6 +102,7 @@ Every module contains its own CHANGELOG.md. Please refer to the module you are i
 * (baseapp) [#20208](https://github.com/cosmos/cosmos-sdk/pull/20208) Skip running validateBasic for rechecking txs.
 * (baseapp) [#20380](https://github.com/cosmos/cosmos-sdk/pull/20380) Enhanced OfferSnapshot documentation.
 * (client) [#20771](https://github.com/cosmos/cosmos-sdk/pull/20771) Remove `ReadDefaultValuesFromDefaultClientConfig` from `client` package. (It was introduced in `v0.50.6` as a quick fix).
+* (grpcserver) [#20945](https://github.com/cosmos/cosmos-sdk/pull/20945) Adds error handling for out-of-gas panics in grpc query handlers.
 
 ### Bug Fixes
 
diff --git a/baseapp/grpcserver.go b/baseapp/grpcserver.go
index b1befabe9e86..c162bebf1ee3 100644
--- a/baseapp/grpcserver.go
+++ b/baseapp/grpcserver.go
@@ -14,6 +14,7 @@ import (
 	"google.golang.org/grpc/status"
 
 	errorsmod "cosmossdk.io/errors"
+	storetypes "cosmossdk.io/store/types"
 
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	sdkerrors "github.com/cosmos/cosmos-sdk/types/errors"
@@ -67,6 +68,18 @@ func (app *BaseApp) RegisterGRPCServer(server gogogrpc.Server) {
 
 		app.logger.Debug("gRPC query received of type: " + fmt.Sprintf("%#v", req))
 
+		// Catch an OutOfGasPanic caused in the query handlers
+		defer func() {
+			if r := recover(); r != nil {
+				switch rType := r.(type) {
+				case storetypes.ErrorOutOfGas:
+					err = errorsmod.Wrapf(sdkerrors.ErrOutOfGas, "Query gas limit exceeded: %v, out of gas in location: %v", sdkCtx.GasMeter().Limit(), rType.Descriptor)
+				default:
+					panic(r)
+				}
+			}
+		}()
+
 		return handler(grpcCtx, req)
 	}
 
diff --git a/runtime/v2/app.go b/runtime/v2/app.go
index 8df0bdb7dedf..014849c497b0 100644
--- a/runtime/v2/app.go
+++ b/runtime/v2/app.go
@@ -4,6 +4,7 @@ import (
 	"encoding/json"
 	"errors"
 
+	gogoproto "github.com/cosmos/gogoproto/proto"
 	"golang.org/x/exp/slices"
 
 	runtimev2 "cosmossdk.io/api/cosmos/app/runtime/v2"
@@ -44,6 +45,10 @@ type App[T transaction.Tx] struct {
 	interfaceRegistrar registry.InterfaceRegistrar
 	amino              legacy.Amino
 	moduleManager      *MM[T]
+
+	// GRPCQueryDecoders maps gRPC method name to a function that decodes the request
+	// bytes into a gogoproto.Message, which then can be passed to appmanager.
+	GRPCQueryDecoders map[string]func(requestBytes []byte) (gogoproto.Message, error)
 }
 
 // Logger returns the app logger.
@@ -109,3 +114,7 @@ func (a *App[T]) ExecuteGenesisTx(_ []byte) error {
 func (a *App[T]) GetAppManager() *appmanager.AppManager[T] {
 	return a.AppManager
 }
+
+func (a *App[T]) GetGRPCQueryDecoders() map[string]func(requestBytes []byte) (gogoproto.Message, error) {
+	return a.GRPCQueryDecoders
+}
diff --git a/runtime/v2/manager.go b/runtime/v2/manager.go
index 0b139c95bc35..ff9102085bad 100644
--- a/runtime/v2/manager.go
+++ b/runtime/v2/manager.go
@@ -5,6 +5,7 @@ import (
 	"encoding/json"
 	"errors"
 	"fmt"
+	"reflect"
 	"sort"
 
 	gogoproto "github.com/cosmos/gogoproto/proto"
@@ -555,17 +556,28 @@ func (m *MM[T]) assertNoForgottenModules(
 
 func registerServices[T transaction.Tx](s appmodule.HasServices, app *App[T], registry *protoregistry.Files) error {
 	c := &configurator{
-		stfQueryRouter: app.queryRouterBuilder,
-		stfMsgRouter:   app.msgRouterBuilder,
-		registry:       registry,
-		err:            nil,
+		grpcQueryDecoders: map[string]func([]byte) (gogoproto.Message, error){},
+		stfQueryRouter:    app.queryRouterBuilder,
+		stfMsgRouter:      app.msgRouterBuilder,
+		registry:          registry,
+		err:               nil,
 	}
-	return s.RegisterServices(c)
+
+	err := s.RegisterServices(c)
+	if err != nil {
+		return fmt.Errorf("unable to register services: %w", err)
+	}
+	app.GRPCQueryDecoders = c.grpcQueryDecoders
+	return nil
 }
 
 var _ grpc.ServiceRegistrar = (*configurator)(nil)
 
 type configurator struct {
+	// grpcQueryDecoders is required because module expose queries through gRPC
+	// this provides a way to route to modules using gRPC.
+	grpcQueryDecoders map[string]func([]byte) (gogoproto.Message, error)
+
 	stfQueryRouter *stf.MsgRouterBuilder
 	stfMsgRouter   *stf.MsgRouterBuilder
 	registry       *protoregistry.Files
@@ -596,17 +608,28 @@ func (c *configurator) RegisterService(sd *grpc.ServiceDesc, ss interface{}) {
 func (c *configurator) registerQueryHandlers(sd *grpc.ServiceDesc, ss interface{}) error {
 	for _, md := range sd.Methods {
 		// TODO(tip): what if a query is not deterministic?
-		err := registerMethod(c.stfQueryRouter, sd, md, ss)
+		requestFullName, err := registerMethod(c.stfQueryRouter, sd, md, ss)
 		if err != nil {
 			return fmt.Errorf("unable to register query handler %s: %w", md.MethodName, err)
 		}
+
+		// register gRPC query method.
+		typ := gogoproto.MessageType(requestFullName)
+		if typ == nil {
+			return fmt.Errorf("unable to find message in gogotype registry: %w", err)
+		}
+		decoderFunc := func(bytes []byte) (gogoproto.Message, error) {
+			msg := reflect.New(typ.Elem()).Interface().(gogoproto.Message)
+			return msg, gogoproto.Unmarshal(bytes, msg)
+		}
+		c.grpcQueryDecoders[md.MethodName] = decoderFunc
 	}
 	return nil
 }
 
 func (c *configurator) registerMsgHandlers(sd *grpc.ServiceDesc, ss interface{}) error {
 	for _, md := range sd.Methods {
-		err := registerMethod(c.stfMsgRouter, sd, md, ss)
+		_, err := registerMethod(c.stfMsgRouter, sd, md, ss)
 		if err != nil {
 			return fmt.Errorf("unable to register msg handler %s: %w", md.MethodName, err)
 		}
@@ -633,13 +656,13 @@ func registerMethod(
 	sd *grpc.ServiceDesc,
 	md grpc.MethodDesc,
 	ss interface{},
-) error {
+) (string, error) {
 	requestName, err := requestFullNameFromMethodDesc(sd, md)
 	if err != nil {
-		return err
+		return "", err
 	}
 
-	return stfRouter.RegisterHandler(string(requestName), func(
+	return string(requestName), stfRouter.RegisterHandler(string(requestName), func(
 		ctx context.Context,
 		msg appmodulev2.Message,
 	) (resp appmodulev2.Message, err error) {
diff --git a/server/v2/api/grpc/server.go b/server/v2/api/grpc/server.go
index 20397ea7a89d..7f73472a330f 100644
--- a/server/v2/api/grpc/server.go
+++ b/server/v2/api/grpc/server.go
@@ -14,7 +14,7 @@ import (
 	"cosmossdk.io/server/v2/api/grpc/gogoreflection"
 )
 
-type GRPCServer[AppT serverv2.AppI[T], T transaction.Tx] struct {
+type GRPCServer[T transaction.Tx] struct {
 	logger     log.Logger
 	config     *Config
 	cfgOptions []CfgOption
@@ -23,15 +23,15 @@ type GRPCServer[AppT serverv2.AppI[T], T transaction.Tx] struct {
 }
 
 // New creates a new grpc server.
-func New[AppT serverv2.AppI[T], T transaction.Tx](cfgOptions ...CfgOption) *GRPCServer[AppT, T] {
-	return &GRPCServer[AppT, T]{
+func New[T transaction.Tx](cfgOptions ...CfgOption) *GRPCServer[T] {
+	return &GRPCServer[T]{
 		cfgOptions: cfgOptions,
 	}
 }
 
 // Init returns a correctly configured and initialized gRPC server.
 // Note, the caller is responsible for starting the server.
-func (s *GRPCServer[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.Logger) error {
+func (s *GRPCServer[T]) Init(appI serverv2.AppI[T], v *viper.Viper, logger log.Logger) error {
 	cfg := s.Config().(*Config)
 	if v != nil {
 		if err := v.Sub(s.Name()).Unmarshal(&cfg); err != nil {
@@ -57,11 +57,11 @@ func (s *GRPCServer[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.Logger)
 	return nil
 }
 
-func (s *GRPCServer[AppT, T]) Name() string {
+func (s *GRPCServer[T]) Name() string {
 	return "grpc"
 }
 
-func (s *GRPCServer[AppT, T]) Config() any {
+func (s *GRPCServer[T]) Config() any {
 	if s.config == nil || s.config == (&Config{}) {
 		cfg := DefaultConfig()
 		// overwrite the default config with the provided options
@@ -75,7 +75,7 @@ func (s *GRPCServer[AppT, T]) Config() any {
 	return s.config
 }
 
-func (s *GRPCServer[AppT, T]) Start(ctx context.Context) error {
+func (s *GRPCServer[T]) Start(ctx context.Context) error {
 	if !s.config.Enable {
 		return nil
 	}
@@ -102,7 +102,7 @@ func (s *GRPCServer[AppT, T]) Start(ctx context.Context) error {
 	return err
 }
 
-func (s *GRPCServer[AppT, T]) Stop(ctx context.Context) error {
+func (s *GRPCServer[T]) Stop(ctx context.Context) error {
 	if !s.config.Enable {
 		return nil
 	}
diff --git a/server/v2/api/grpcgateway/server.go b/server/v2/api/grpcgateway/server.go
index 220e8b32f617..7a5693f8c5be 100644
--- a/server/v2/api/grpcgateway/server.go
+++ b/server/v2/api/grpcgateway/server.go
@@ -18,16 +18,14 @@ import (
 	serverv2 "cosmossdk.io/server/v2"
 )
 
-var _ serverv2.ServerComponent[
-	serverv2.AppI[transaction.Tx], transaction.Tx,
-] = (*GRPCGatewayServer[serverv2.AppI[transaction.Tx], transaction.Tx])(nil)
+var _ serverv2.ServerComponent[transaction.Tx] = (*GRPCGatewayServer[transaction.Tx])(nil)
 
 const (
 	// GRPCBlockHeightHeader is the gRPC header for block height.
 	GRPCBlockHeightHeader = "x-cosmos-block-height"
 )
 
-type GRPCGatewayServer[AppT serverv2.AppI[T], T transaction.Tx] struct {
+type GRPCGatewayServer[T transaction.Tx] struct {
 	logger     log.Logger
 	config     *Config
 	cfgOptions []CfgOption
@@ -37,7 +35,7 @@ type GRPCGatewayServer[AppT serverv2.AppI[T], T transaction.Tx] struct {
 }
 
 // New creates a new gRPC-gateway server.
-func New[AppT serverv2.AppI[T], T transaction.Tx](grpcSrv *grpc.Server, ir jsonpb.AnyResolver, cfgOptions ...CfgOption) *GRPCGatewayServer[AppT, T] {
+func New[T transaction.Tx](grpcSrv *grpc.Server, ir jsonpb.AnyResolver, cfgOptions ...CfgOption) *GRPCGatewayServer[T] {
 	// The default JSON marshaller used by the gRPC-Gateway is unable to marshal non-nullable non-scalar fields.
 	// Using the gogo/gateway package with the gRPC-Gateway WithMarshaler option fixes the scalar field marshaling issue.
 	marshalerOption := &gateway.JSONPb{
@@ -47,7 +45,7 @@ func New[AppT serverv2.AppI[T], T transaction.Tx](grpcSrv *grpc.Server, ir jsonp
 		AnyResolver:  ir,
 	}
 
-	return &GRPCGatewayServer[AppT, T]{
+	return &GRPCGatewayServer[T]{
 		GRPCSrv: grpcSrv,
 		GRPCGatewayRouter: runtime.NewServeMux(
 			// Custom marshaler option is required for gogo proto
@@ -65,11 +63,11 @@ func New[AppT serverv2.AppI[T], T transaction.Tx](grpcSrv *grpc.Server, ir jsonp
 	}
 }
 
-func (g *GRPCGatewayServer[AppT, T]) Name() string {
+func (g *GRPCGatewayServer[T]) Name() string {
 	return "grpc-gateway"
 }
 
-func (s *GRPCGatewayServer[AppT, T]) Config() any {
+func (s *GRPCGatewayServer[T]) Config() any {
 	if s.config == nil || s.config == (&Config{}) {
 		cfg := DefaultConfig()
 		// overwrite the default config with the provided options
@@ -83,7 +81,7 @@ func (s *GRPCGatewayServer[AppT, T]) Config() any {
 	return s.config
 }
 
-func (s *GRPCGatewayServer[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.Logger) error {
+func (s *GRPCGatewayServer[T]) Init(appI serverv2.AppI[transaction.Tx], v *viper.Viper, logger log.Logger) error {
 	cfg := s.Config().(*Config)
 	if v != nil {
 		if err := v.Sub(s.Name()).Unmarshal(&cfg); err != nil {
@@ -100,7 +98,7 @@ func (s *GRPCGatewayServer[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.
 	return nil
 }
 
-func (s *GRPCGatewayServer[AppT, T]) Start(ctx context.Context) error {
+func (s *GRPCGatewayServer[T]) Start(ctx context.Context) error {
 	if !s.config.Enable {
 		return nil
 	}
@@ -110,7 +108,7 @@ func (s *GRPCGatewayServer[AppT, T]) Start(ctx context.Context) error {
 	return nil
 }
 
-func (s *GRPCGatewayServer[AppT, T]) Stop(ctx context.Context) error {
+func (s *GRPCGatewayServer[T]) Stop(ctx context.Context) error {
 	if !s.config.Enable {
 		return nil
 	}
@@ -119,7 +117,7 @@ func (s *GRPCGatewayServer[AppT, T]) Stop(ctx context.Context) error {
 }
 
 // Register implements registers a grpc-gateway server
-func (s *GRPCGatewayServer[AppT, T]) Register(r mux.Router) error {
+func (s *GRPCGatewayServer[T]) Register(r mux.Router) error {
 	// configure grpc-gatway server
 	r.PathPrefix("/").Handler(http.HandlerFunc(func(w http.ResponseWriter, req *http.Request) {
 		// Fall back to grpc gateway server.
diff --git a/server/v2/cometbft/abci.go b/server/v2/cometbft/abci.go
index c500d47e1edb..f63953b0c8d3 100644
--- a/server/v2/cometbft/abci.go
+++ b/server/v2/cometbft/abci.go
@@ -9,6 +9,7 @@ import (
 
 	abci "github.com/cometbft/cometbft/abci/types"
 	abciproto "github.com/cometbft/cometbft/api/cometbft/abci/v1"
+	gogoproto "github.com/cosmos/gogoproto/proto"
 
 	coreappmgr "cosmossdk.io/core/app"
 	"cosmossdk.io/core/comet"
@@ -31,6 +32,9 @@ import (
 var _ abci.Application = (*Consensus[transaction.Tx])(nil)
 
 type Consensus[T transaction.Tx] struct {
+	// legacy support for gRPC
+	grpcQueryDecoders map[string]func(requestBytes []byte) (gogoproto.Message, error)
+
 	app             *appmanager.AppManager[T]
 	cfg             Config
 	store           types.Store
@@ -56,18 +60,28 @@ type Consensus[T transaction.Tx] struct {
 func NewConsensus[T transaction.Tx](
 	app *appmanager.AppManager[T],
 	mp mempool.Mempool[T],
+	grpcQueryDecoders map[string]func(requestBytes []byte) (gogoproto.Message, error),
 	store types.Store,
 	cfg Config,
 	txCodec transaction.Codec[T],
 	logger log.Logger,
 ) *Consensus[T] {
 	return &Consensus[T]{
-		mempool: mp,
-		store:   store,
-		app:     app,
-		cfg:     cfg,
-		txCodec: txCodec,
-		logger:  logger,
+		grpcQueryDecoders:      grpcQueryDecoders,
+		app:                    app,
+		cfg:                    cfg,
+		store:                  store,
+		logger:                 logger,
+		txCodec:                txCodec,
+		streaming:              streaming.Manager{},
+		snapshotManager:        nil,
+		mempool:                mp,
+		lastCommittedHeight:    atomic.Int64{},
+		prepareProposalHandler: nil,
+		processProposalHandler: nil,
+		verifyVoteExt:          nil,
+		extendVote:             nil,
+		chainID:                "",
 	}
 }
 
@@ -150,18 +164,16 @@ func (c *Consensus[T]) Info(ctx context.Context, _ *abciproto.InfoRequest) (*abc
 
 // Query implements types.Application.
 // It is called by cometbft to query application state.
-func (c *Consensus[T]) Query(ctx context.Context, req *abciproto.QueryRequest) (*abciproto.QueryResponse, error) {
-	// follow the query path from here
-	decodedMsg, err := c.txCodec.Decode(req.Data)
-	protoMsg, ok := any(decodedMsg).(transaction.Msg)
-	if !ok {
-		return nil, fmt.Errorf("decoded type T %T must implement core/transaction.Msg", decodedMsg)
-	}
-
-	// if no error is returned then we can handle the query with the appmanager
-	// otherwise it is a KV store query
-	if err == nil {
-		res, err := c.app.Query(ctx, uint64(req.Height), protoMsg)
+func (c *Consensus[T]) Query(ctx context.Context, req *abciproto.QueryRequest) (resp *abciproto.QueryResponse, err error) {
+	// check if it's a gRPC method
+	grpcQueryDecoder, isGRPC := c.grpcQueryDecoders[req.Path]
+	if isGRPC {
+		protoRequest, err := grpcQueryDecoder(req.Data)
+		if err != nil {
+			return nil, fmt.Errorf("unable to decode gRPC request with path %s from ABCI.Query: %w", req.Path, err)
+		}
+		res, err := c.app.Query(ctx, uint64(req.Height), protoRequest)
+
 		if err != nil {
 			resp := queryResult(err)
 			resp.Height = req.Height
@@ -179,8 +191,6 @@ func (c *Consensus[T]) Query(ctx context.Context, req *abciproto.QueryRequest) (
 		return QueryResult(errorsmod.Wrap(cometerrors.ErrUnknownRequest, "no query path provided"), c.cfg.Trace), nil
 	}
 
-	var resp *abciproto.QueryResponse
-
 	switch path[0] {
 	case cmtservice.QueryPathApp:
 		resp, err = c.handlerQueryApp(ctx, path, req)
@@ -391,7 +401,7 @@ func (c *Consensus[T]) FinalizeBlock(
 	//		ProposerAddress: req.ProposerAddress,
 	//		LastCommit:      req.DecidedLastCommit,
 	//	},
-	//}
+	// }
 	//
 	// ctx = context.WithValue(ctx, corecontext.CometInfoKey, &comet.Info{
 	// 	Evidence:        sdktypes.ToSDKEvidence(req.Misbehavior),
diff --git a/server/v2/cometbft/commands.go b/server/v2/cometbft/commands.go
index 982eff6ae4c1..7c72cfe56ecc 100644
--- a/server/v2/cometbft/commands.go
+++ b/server/v2/cometbft/commands.go
@@ -28,7 +28,7 @@ import (
 	"github.com/cosmos/cosmos-sdk/version"
 )
 
-func (s *CometBFTServer[AppT, T]) rpcClient(cmd *cobra.Command) (rpc.CometRPC, error) {
+func (s *CometBFTServer[T]) rpcClient(cmd *cobra.Command) (rpc.CometRPC, error) {
 	if s.config.Standalone {
 		client, err := rpchttp.New(client.GetConfigFromCmd(cmd).RPC.ListenAddress)
 		if err != nil {
@@ -51,7 +51,7 @@ func (s *CometBFTServer[AppT, T]) rpcClient(cmd *cobra.Command) (rpc.CometRPC, e
 }
 
 // StatusCommand returns the command to return the status of the network.
-func (s *CometBFTServer[AppT, T]) StatusCommand() *cobra.Command {
+func (s *CometBFTServer[T]) StatusCommand() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "status",
 		Short: "Query remote node for status",
@@ -82,7 +82,7 @@ func (s *CometBFTServer[AppT, T]) StatusCommand() *cobra.Command {
 }
 
 // ShowNodeIDCmd - ported from CometBFT, dump node ID to stdout
-func (s *CometBFTServer[AppT, T]) ShowNodeIDCmd() *cobra.Command {
+func (s *CometBFTServer[T]) ShowNodeIDCmd() *cobra.Command {
 	return &cobra.Command{
 		Use:   "show-node-id",
 		Short: "Show this node's ID",
@@ -100,7 +100,7 @@ func (s *CometBFTServer[AppT, T]) ShowNodeIDCmd() *cobra.Command {
 }
 
 // ShowValidatorCmd - ported from CometBFT, show this node's validator info
-func (s *CometBFTServer[AppT, T]) ShowValidatorCmd() *cobra.Command {
+func (s *CometBFTServer[T]) ShowValidatorCmd() *cobra.Command {
 	cmd := cobra.Command{
 		Use:   "show-validator",
 		Short: "Show this node's CometBFT validator info",
@@ -134,7 +134,7 @@ func (s *CometBFTServer[AppT, T]) ShowValidatorCmd() *cobra.Command {
 }
 
 // ShowAddressCmd - show this node's validator address
-func (s *CometBFTServer[AppT, T]) ShowAddressCmd() *cobra.Command {
+func (s *CometBFTServer[T]) ShowAddressCmd() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "show-address",
 		Short: "Shows this node's CometBFT validator consensus address",
@@ -153,7 +153,7 @@ func (s *CometBFTServer[AppT, T]) ShowAddressCmd() *cobra.Command {
 }
 
 // VersionCmd prints CometBFT and ABCI version numbers.
-func (s *CometBFTServer[AppT, T]) VersionCmd() *cobra.Command {
+func (s *CometBFTServer[T]) VersionCmd() *cobra.Command {
 	return &cobra.Command{
 		Use:   "version",
 		Short: "Print CometBFT libraries' version",
@@ -181,7 +181,7 @@ func (s *CometBFTServer[AppT, T]) VersionCmd() *cobra.Command {
 }
 
 // QueryBlocksCmd returns a command to search through blocks by events.
-func (s *CometBFTServer[AppT, T]) QueryBlocksCmd() *cobra.Command {
+func (s *CometBFTServer[T]) QueryBlocksCmd() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "blocks",
 		Short: "Query for paginated blocks that match a set of events",
@@ -231,7 +231,7 @@ for. Each module documents its respective events under 'xx_events.md'.
 }
 
 // QueryBlockCmd implements the default command for a Block query.
-func (s *CometBFTServer[AppT, T]) QueryBlockCmd() *cobra.Command {
+func (s *CometBFTServer[T]) QueryBlockCmd() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "block --type=[height|hash] [height|hash]",
 		Short: "Query for a committed block by height, hash, or event(s)",
@@ -318,7 +318,7 @@ $ %s query block --%s=%s <hash>
 }
 
 // QueryBlockResultsCmd implements the default command for a BlockResults query.
-func (s *CometBFTServer[AppT, T]) QueryBlockResultsCmd() *cobra.Command {
+func (s *CometBFTServer[T]) QueryBlockResultsCmd() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "block-results [height]",
 		Short: "Query for a committed block's results by height",
@@ -383,7 +383,7 @@ func parseOptionalHeight(heightStr string) (*int64, error) {
 	return &tmp, nil
 }
 
-func (s *CometBFTServer[AppT, T]) BootstrapStateCmd() *cobra.Command {
+func (s *CometBFTServer[T]) BootstrapStateCmd() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "bootstrap-state",
 		Short: "Bootstrap CometBFT state at an arbitrary block height using a light client",
diff --git a/server/v2/cometbft/server.go b/server/v2/cometbft/server.go
index 1b1f0ff6637e..9b84a776400c 100644
--- a/server/v2/cometbft/server.go
+++ b/server/v2/cometbft/server.go
@@ -30,14 +30,12 @@ import (
 )
 
 var (
-	_ serverv2.ServerComponent[
-		serverv2.AppI[transaction.Tx], transaction.Tx,
-	] = (*CometBFTServer[serverv2.AppI[transaction.Tx], transaction.Tx])(nil)
-	_ serverv2.HasCLICommands = (*CometBFTServer[serverv2.AppI[transaction.Tx], transaction.Tx])(nil)
-	_ serverv2.HasStartFlags  = (*CometBFTServer[serverv2.AppI[transaction.Tx], transaction.Tx])(nil)
+	_ serverv2.ServerComponent[transaction.Tx] = (*CometBFTServer[transaction.Tx])(nil)
+	_ serverv2.HasCLICommands                  = (*CometBFTServer[transaction.Tx])(nil)
+	_ serverv2.HasStartFlags                   = (*CometBFTServer[transaction.Tx])(nil)
 )
 
-type CometBFTServer[AppT serverv2.AppI[T], T transaction.Tx] struct {
+type CometBFTServer[T transaction.Tx] struct {
 	Node      *node.Node
 	Consensus *Consensus[T]
 
@@ -48,21 +46,21 @@ type CometBFTServer[AppT serverv2.AppI[T], T transaction.Tx] struct {
 	cmtConfigOptions []CmtCfgOption
 }
 
-func New[AppT serverv2.AppI[T], T transaction.Tx](txCodec transaction.Codec[T], options ServerOptions[T], cfgOptions ...CmtCfgOption) *CometBFTServer[AppT, T] {
-	return &CometBFTServer[AppT, T]{
+func New[T transaction.Tx](txCodec transaction.Codec[T], options ServerOptions[T], cfgOptions ...CmtCfgOption) *CometBFTServer[T] {
+	return &CometBFTServer[T]{
 		initTxCodec:      txCodec,
 		options:          options,
 		cmtConfigOptions: cfgOptions,
 	}
 }
 
-func (s *CometBFTServer[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.Logger) error {
+func (s *CometBFTServer[T]) Init(appI serverv2.AppI[T], v *viper.Viper, logger log.Logger) error {
 	s.config = Config{CmtConfig: GetConfigFromViper(v), ConsensusAuthority: appI.GetConsensusAuthority()}
 	s.logger = logger.With(log.ModuleKey, s.Name())
 
 	// create consensus
 	store := appI.GetStore().(types.Store)
-	consensus := NewConsensus[T](appI.GetAppManager(), s.options.Mempool, store, s.config, s.initTxCodec, s.logger)
+	consensus := NewConsensus[T](appI.GetAppManager(), s.options.Mempool, appI.GetGRPCQueryDecoders(), store, s.config, s.initTxCodec, s.logger)
 
 	consensus.prepareProposalHandler = s.options.PrepareProposalHandler
 	consensus.processProposalHandler = s.options.ProcessProposalHandler
@@ -85,11 +83,11 @@ func (s *CometBFTServer[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.Log
 	return nil
 }
 
-func (s *CometBFTServer[AppT, T]) Name() string {
+func (s *CometBFTServer[T]) Name() string {
 	return "comet"
 }
 
-func (s *CometBFTServer[AppT, T]) Start(ctx context.Context) error {
+func (s *CometBFTServer[T]) Start(ctx context.Context) error {
 	viper := ctx.Value(corectx.ViperContextKey).(*viper.Viper)
 	cometConfig := GetConfigFromViper(viper)
 
@@ -128,7 +126,7 @@ func (s *CometBFTServer[AppT, T]) Start(ctx context.Context) error {
 	return s.Node.Start()
 }
 
-func (s *CometBFTServer[AppT, T]) Stop(context.Context) error {
+func (s *CometBFTServer[T]) Stop(context.Context) error {
 	if s.Node != nil && s.Node.IsRunning() {
 		return s.Node.Stop()
 	}
@@ -174,7 +172,7 @@ func getGenDocProvider(cfg *cmtcfg.Config) func() (node.ChecksummedGenesisDoc, e
 	}
 }
 
-func (s *CometBFTServer[AppT, T]) StartCmdFlags() *pflag.FlagSet {
+func (s *CometBFTServer[T]) StartCmdFlags() *pflag.FlagSet {
 	flags := pflag.NewFlagSet("cometbft", pflag.ExitOnError)
 	flags.Bool(FlagWithComet, true, "Run abci app embedded in-process with CometBFT")
 	flags.String(FlagAddress, "tcp://127.0.0.1:26658", "Listen address")
@@ -189,7 +187,7 @@ func (s *CometBFTServer[AppT, T]) StartCmdFlags() *pflag.FlagSet {
 	return flags
 }
 
-func (s *CometBFTServer[AppT, T]) CLICommands() serverv2.CLIConfig {
+func (s *CometBFTServer[T]) CLICommands() serverv2.CLIConfig {
 	return serverv2.CLIConfig{
 		Commands: []*cobra.Command{
 			s.StatusCommand(),
@@ -208,7 +206,7 @@ func (s *CometBFTServer[AppT, T]) CLICommands() serverv2.CLIConfig {
 	}
 }
 
-func (s *CometBFTServer[AppT, T]) WriteDefaultConfigAt(configPath string) error {
+func (s *CometBFTServer[T]) WriteDefaultConfigAt(configPath string) error {
 	cometConfig := cmtcfg.DefaultConfig()
 	for _, opt := range s.cmtConfigOptions {
 		opt(cometConfig)
diff --git a/server/v2/commands.go b/server/v2/commands.go
index db385a832d81..dd62c1518ac6 100644
--- a/server/v2/commands.go
+++ b/server/v2/commands.go
@@ -35,11 +35,11 @@ func Execute(rootCmd *cobra.Command, envPrefix, defaultHome string) error {
 
 // AddCommands add the server commands to the root command
 // It configure the config handling and the logger handling
-func AddCommands[AppT AppI[T], T transaction.Tx](
+func AddCommands[T transaction.Tx](
 	rootCmd *cobra.Command,
-	newApp AppCreator[AppT, T],
+	newApp AppCreator[T],
 	logger log.Logger,
-	components ...ServerComponent[AppT, T],
+	components ...ServerComponent[T],
 ) error {
 	if len(components) == 0 {
 		return errors.New("no components provided")
@@ -96,9 +96,9 @@ func AddCommands[AppT AppI[T], T transaction.Tx](
 }
 
 // createStartCommand creates the start command for the application.
-func createStartCommand[AppT AppI[T], T transaction.Tx](
-	server *Server[AppT, T],
-	newApp AppCreator[AppT, T],
+func createStartCommand[T transaction.Tx](
+	server *Server[T],
+	newApp AppCreator[T],
 ) *cobra.Command {
 	flags := server.StartFlags()
 
@@ -146,7 +146,7 @@ func createStartCommand[AppT AppI[T], T transaction.Tx](
 }
 
 // configHandle writes the default config to the home directory if it does not exist and sets the server context
-func configHandle[AppT AppI[T], T transaction.Tx](s *Server[AppT, T], cmd *cobra.Command) error {
+func configHandle[T transaction.Tx](s *Server[T], cmd *cobra.Command) error {
 	home, err := cmd.Flags().GetString(FlagHome)
 	if err != nil {
 		return err
diff --git a/server/v2/server.go b/server/v2/server.go
index c8db2773bdbb..7dd4438097ca 100644
--- a/server/v2/server.go
+++ b/server/v2/server.go
@@ -18,12 +18,12 @@ import (
 )
 
 // ServerComponent is a server module that can be started and stopped.
-type ServerComponent[AppT AppI[T], T transaction.Tx] interface {
+type ServerComponent[T transaction.Tx] interface {
 	Name() string
 
 	Start(context.Context) error
 	Stop(context.Context) error
-	Init(AppT, *viper.Viper, log.Logger) error
+	Init(AppI[T], *viper.Viper, log.Logger) error
 }
 
 // HasCLICommands is a server module that has CLI commands.
@@ -41,7 +41,7 @@ type HasStartFlags interface {
 	StartCmdFlags() *pflag.FlagSet
 }
 
-var _ ServerComponent[AppI[transaction.Tx], transaction.Tx] = (*Server[AppI[transaction.Tx], transaction.Tx])(nil)
+var _ ServerComponent[transaction.Tx] = (*Server[transaction.Tx])(nil)
 
 // ReadConfig returns a viper instance of the config file
 func ReadConfig(configPath string) (*viper.Viper, error) {
@@ -63,26 +63,27 @@ func ReadConfig(configPath string) (*viper.Viper, error) {
 	return v, nil
 }
 
-type Server[AppT AppI[T], T transaction.Tx] struct {
+type Server[T transaction.Tx] struct {
 	logger     log.Logger
-	components []ServerComponent[AppT, T]
+	components []ServerComponent[T]
 }
 
-func NewServer[AppT AppI[T], T transaction.Tx](
-	logger log.Logger, components ...ServerComponent[AppT, T],
-) *Server[AppT, T] {
-	return &Server[AppT, T]{
+func NewServer[T transaction.Tx](
+	logger log.Logger,
+	components ...ServerComponent[T],
+) *Server[T] {
+	return &Server[T]{
 		logger:     logger,
 		components: components,
 	}
 }
 
-func (s *Server[AppT, T]) Name() string {
+func (s *Server[T]) Name() string {
 	return "server"
 }
 
 // Start starts all components concurrently.
-func (s *Server[AppT, T]) Start(ctx context.Context) error {
+func (s *Server[T]) Start(ctx context.Context) error {
 	s.logger.Info("starting servers...")
 
 	g, ctx := errgroup.WithContext(ctx)
@@ -103,7 +104,7 @@ func (s *Server[AppT, T]) Start(ctx context.Context) error {
 }
 
 // Stop stops all components concurrently.
-func (s *Server[AppT, T]) Stop(ctx context.Context) error {
+func (s *Server[T]) Stop(ctx context.Context) error {
 	s.logger.Info("stopping servers...")
 
 	g, ctx := errgroup.WithContext(ctx)
@@ -118,7 +119,7 @@ func (s *Server[AppT, T]) Stop(ctx context.Context) error {
 }
 
 // CLICommands returns all CLI commands of all components.
-func (s *Server[AppT, T]) CLICommands() CLIConfig {
+func (s *Server[T]) CLICommands() CLIConfig {
 	compart := func(name string, cmds ...*cobra.Command) *cobra.Command {
 		if len(cmds) == 1 && strings.HasPrefix(cmds[0].Use, name) {
 			return cmds[0]
@@ -156,7 +157,7 @@ func (s *Server[AppT, T]) CLICommands() CLIConfig {
 }
 
 // Configs returns all configs of all server components.
-func (s *Server[AppT, T]) Configs() map[string]any {
+func (s *Server[T]) Configs() map[string]any {
 	cfgs := make(map[string]any)
 	for _, mod := range s.components {
 		if configmod, ok := mod.(HasConfig); ok {
@@ -170,8 +171,8 @@ func (s *Server[AppT, T]) Configs() map[string]any {
 
 // Init initializes all server components with the provided application, configuration, and logger.
 // It returns an error if any component fails to initialize.
-func (s *Server[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.Logger) error {
-	var components []ServerComponent[AppT, T]
+func (s *Server[T]) Init(appI AppI[T], v *viper.Viper, logger log.Logger) error {
+	var components []ServerComponent[T]
 	for _, mod := range s.components {
 		mod := mod
 		if err := mod.Init(appI, v, logger); err != nil {
@@ -187,7 +188,7 @@ func (s *Server[AppT, T]) Init(appI AppT, v *viper.Viper, logger log.Logger) err
 
 // WriteConfig writes the config to the given path.
 // Note: it does not use viper.WriteConfigAs because we do not want to store flag values in the config.
-func (s *Server[AppT, T]) WriteConfig(configPath string) error {
+func (s *Server[T]) WriteConfig(configPath string) error {
 	cfgs := s.Configs()
 	b, err := toml.Marshal(cfgs)
 	if err != nil {
@@ -219,7 +220,7 @@ func (s *Server[AppT, T]) WriteConfig(configPath string) error {
 }
 
 // StartFlags returns all flags of all server components.
-func (s *Server[AppT, T]) StartFlags() []*pflag.FlagSet {
+func (s *Server[T]) StartFlags() []*pflag.FlagSet {
 	flags := []*pflag.FlagSet{}
 	for _, mod := range s.components {
 		if startmod, ok := mod.(HasStartFlags); ok {
diff --git a/server/v2/server_test.go b/server/v2/server_test.go
index 2155e0e1af8e..37224d6d5fc6 100644
--- a/server/v2/server_test.go
+++ b/server/v2/server_test.go
@@ -58,7 +58,7 @@ func TestServer(t *testing.T) {
 	}
 
 	logger := log.NewLogger(os.Stdout)
-	grpcServer := grpc.New[serverv2.AppI[transaction.Tx], transaction.Tx]()
+	grpcServer := grpc.New[transaction.Tx]()
 	if err := grpcServer.Init(&mockApp[transaction.Tx]{}, v, logger); err != nil {
 		t.Log(err)
 		t.Fail()
diff --git a/server/v2/types.go b/server/v2/types.go
index 1a22abf8e16f..3382d1b27b6b 100644
--- a/server/v2/types.go
+++ b/server/v2/types.go
@@ -1,6 +1,7 @@
 package serverv2
 
 import (
+	gogoproto "github.com/cosmos/gogoproto/proto"
 	"github.com/spf13/viper"
 
 	coreapp "cosmossdk.io/core/app"
@@ -9,11 +10,12 @@ import (
 	"cosmossdk.io/server/v2/appmanager"
 )
 
-type AppCreator[AppT AppI[T], T transaction.Tx] func(log.Logger, *viper.Viper) AppT
+type AppCreator[T transaction.Tx] func(log.Logger, *viper.Viper) AppI[T]
 
 type AppI[T transaction.Tx] interface {
 	GetAppManager() *appmanager.AppManager[T]
 	GetConsensusAuthority() string
 	InterfaceRegistry() coreapp.InterfaceRegistry
+	GetGRPCQueryDecoders() map[string]func(requestBytes []byte) (gogoproto.Message, error)
 	GetStore() any
 }
diff --git a/simapp/v2/app_di.go b/simapp/v2/app_di.go
index b1e05095d904..5f4b2455bc8d 100644
--- a/simapp/v2/app_di.go
+++ b/simapp/v2/app_di.go
@@ -224,7 +224,6 @@ func NewSimApp[T transaction.Tx](
 	if err := app.LoadLatest(); err != nil {
 		panic(err)
 	}
-
 	return app
 }
 
diff --git a/simapp/v2/go.mod b/simapp/v2/go.mod
index 8fc91127cfb2..1d641dca6ca7 100644
--- a/simapp/v2/go.mod
+++ b/simapp/v2/go.mod
@@ -4,7 +4,7 @@ go 1.22.2
 
 require (
 	cosmossdk.io/api v0.7.5
-	cosmossdk.io/collections v0.4.0 // indirect
+	cosmossdk.io/client/v2 v2.0.0-00010101000000-000000000000
 	cosmossdk.io/core v0.12.1-0.20231114100755-569e3ff6a0d7
 	cosmossdk.io/depinject v1.0.0-alpha.4
 	cosmossdk.io/log v1.3.1
@@ -13,6 +13,7 @@ require (
 	cosmossdk.io/server/v2 v2.0.0-00010101000000-000000000000
 	cosmossdk.io/server/v2/cometbft v0.0.0-00010101000000-000000000000
 	cosmossdk.io/store/v2 v2.0.0
+	cosmossdk.io/tools/confix v0.0.0-00010101000000-000000000000
 	cosmossdk.io/x/accounts v0.0.0-20240226161501-23359a0b6d91
 	cosmossdk.io/x/auth v0.0.0-00010101000000-000000000000
 	cosmossdk.io/x/authz v0.0.0-00010101000000-000000000000
@@ -29,28 +30,18 @@ require (
 	cosmossdk.io/x/protocolpool v0.0.0-20230925135524-a1bc045b3190
 	cosmossdk.io/x/slashing v0.0.0-00010101000000-000000000000
 	cosmossdk.io/x/staking v0.0.0-00010101000000-000000000000
-	cosmossdk.io/x/tx v0.13.3 // indirect
 	cosmossdk.io/x/upgrade v0.0.0-20230613133644-0a778132a60f
 	github.com/cometbft/cometbft v1.0.0-rc1
 	github.com/cosmos/cosmos-db v1.0.2
 	// this version is not used as it is always replaced by the latest Cosmos SDK version
 	github.com/cosmos/cosmos-sdk v0.51.0
-	github.com/cosmos/gogoproto v1.5.0 // indirect
-	github.com/golang/mock v1.6.0 // indirect
-	github.com/spf13/cast v1.6.0 // indirect
 	github.com/spf13/cobra v1.8.1
 	github.com/spf13/pflag v1.0.5
 	github.com/spf13/viper v1.19.0
 	github.com/stretchr/testify v1.9.0
-	golang.org/x/sync v0.7.0 // indirect
 	google.golang.org/protobuf v1.34.2
 )
 
-require (
-	cosmossdk.io/client/v2 v2.0.0-00010101000000-000000000000
-	cosmossdk.io/tools/confix v0.0.0-00010101000000-000000000000
-)
-
 require (
 	buf.build/gen/go/cometbft/cometbft/protocolbuffers/go v1.34.2-20240701160653-fedbb9acfd2f.2 // indirect
 	buf.build/gen/go/cosmos/gogo-proto/protocolbuffers/go v1.34.2-20240130113600-88ef6483f90f.2 // indirect
@@ -60,6 +51,7 @@ require (
 	cloud.google.com/go/compute/metadata v0.3.0 // indirect
 	cloud.google.com/go/iam v1.1.8 // indirect
 	cloud.google.com/go/storage v1.42.0 // indirect
+	cosmossdk.io/collections v0.4.0 // indirect
 	cosmossdk.io/core/testing v0.0.0-00010101000000-000000000000 // indirect
 	cosmossdk.io/errors v1.0.1 // indirect
 	cosmossdk.io/schema v0.1.1 // indirect
@@ -69,6 +61,7 @@ require (
 	cosmossdk.io/x/accounts/defaults/lockup v0.0.0-20240417181816-5e7aae0db1f5 // indirect
 	cosmossdk.io/x/accounts/defaults/multisig v0.0.0-00010101000000-000000000000 // indirect
 	cosmossdk.io/x/epochs v0.0.0-20240522060652-a1ae4c3e0337 // indirect
+	cosmossdk.io/x/tx v0.13.3 // indirect
 	filippo.io/edwards25519 v1.1.0 // indirect
 	github.com/99designs/go-keychain v0.0.0-20191008050251-8e49817e8af4 // indirect
 	github.com/99designs/keyring v1.2.2 // indirect
@@ -97,6 +90,7 @@ require (
 	github.com/cosmos/crypto v0.1.1 // indirect
 	github.com/cosmos/go-bip39 v1.0.0 // indirect
 	github.com/cosmos/gogogateway v1.2.0 // indirect
+	github.com/cosmos/gogoproto v1.5.0 // indirect
 	github.com/cosmos/iavl v1.2.0 // indirect
 	github.com/cosmos/ics23/go v0.10.0 // indirect
 	github.com/cosmos/ledger-cosmos-go v0.13.3 // indirect
@@ -125,6 +119,7 @@ require (
 	github.com/gogo/protobuf v1.3.2 // indirect
 	github.com/golang/glog v1.2.0 // indirect
 	github.com/golang/groupcache v0.0.0-20210331224755-41bb18bfe9da // indirect
+	github.com/golang/mock v1.6.0 // indirect
 	github.com/golang/protobuf v1.5.4 // indirect
 	github.com/golang/snappy v0.0.4 // indirect
 	github.com/google/btree v1.1.2 // indirect
@@ -200,6 +195,7 @@ require (
 	github.com/sasha-s/go-deadlock v0.3.1 // indirect
 	github.com/sourcegraph/conc v0.3.0 // indirect
 	github.com/spf13/afero v1.11.0 // indirect
+	github.com/spf13/cast v1.6.0 // indirect
 	github.com/subosito/gotenv v1.6.0 // indirect
 	github.com/supranational/blst v0.3.12 // indirect
 	github.com/syndtr/goleveldb v1.0.1-0.20220721030215-126854af5e6d // indirect
@@ -223,6 +219,7 @@ require (
 	golang.org/x/mod v0.17.0 // indirect
 	golang.org/x/net v0.27.0 // indirect
 	golang.org/x/oauth2 v0.21.0 // indirect
+	golang.org/x/sync v0.7.0 // indirect
 	golang.org/x/sys v0.22.0 // indirect
 	golang.org/x/term v0.22.0 // indirect
 	golang.org/x/text v0.16.0 // indirect
diff --git a/simapp/v2/simdv2/cmd/commands.go b/simapp/v2/simdv2/cmd/commands.go
index 017f601605bf..8f2edc75b8ef 100644
--- a/simapp/v2/simdv2/cmd/commands.go
+++ b/simapp/v2/simdv2/cmd/commands.go
@@ -72,13 +72,13 @@ func (t *temporaryTxDecoder[T]) DecodeJSON(bz []byte) (T, error) {
 	return out, nil
 }
 
-func newApp[AppT serverv2.AppI[T], T transaction.Tx](
+func newApp[T transaction.Tx](
 	logger log.Logger, viper *viper.Viper,
-) AppT {
-	return serverv2.AppI[T](simapp.NewSimApp[T](logger, viper)).(AppT)
+) serverv2.AppI[T] {
+	return serverv2.AppI[T](simapp.NewSimApp[T](logger, viper))
 }
 
-func initRootCmd[AppT serverv2.AppI[T], T transaction.Tx](
+func initRootCmd[T transaction.Tx](
 	rootCmd *cobra.Command,
 	txConfig client.TxConfig,
 	moduleManager *runtimev2.MM[T],
@@ -114,8 +114,8 @@ func initRootCmd[AppT serverv2.AppI[T], T transaction.Tx](
 		rootCmd,
 		newApp,
 		logger,
-		cometbft.New[AppT, T](&temporaryTxDecoder[T]{txConfig}, cometbft.DefaultServerOptions[T]()),
-		grpc.New[AppT, T](),
+		cometbft.New[T](&temporaryTxDecoder[T]{txConfig}, cometbft.DefaultServerOptions[T]()),
+		grpc.New[T](),
 	); err != nil {
 		panic(err)
 	}
diff --git a/simapp/v2/simdv2/cmd/root_di.go b/simapp/v2/simdv2/cmd/root_di.go
index 61c355180386..6051bede8e9c 100644
--- a/simapp/v2/simdv2/cmd/root_di.go
+++ b/simapp/v2/simdv2/cmd/root_di.go
@@ -12,7 +12,6 @@ import (
 	"cosmossdk.io/depinject"
 	"cosmossdk.io/log"
 	"cosmossdk.io/runtime/v2"
-	serverv2 "cosmossdk.io/server/v2"
 	"cosmossdk.io/simapp/v2"
 	"cosmossdk.io/x/auth/tx"
 	authtxconfig "cosmossdk.io/x/auth/tx/config"
@@ -26,7 +25,7 @@ import (
 )
 
 // NewRootCmd creates a new root command for simd. It is called once in the main function.
-func NewRootCmd[AppT serverv2.AppI[T], T transaction.Tx]() *cobra.Command {
+func NewRootCmd[T transaction.Tx]() *cobra.Command {
 	var (
 		autoCliOpts   autocli.AppOptions
 		moduleManager *runtime.MM[T]
@@ -81,7 +80,7 @@ func NewRootCmd[AppT serverv2.AppI[T], T transaction.Tx]() *cobra.Command {
 		},
 	}
 
-	initRootCmd[AppT, T](rootCmd, clientCtx.TxConfig, moduleManager)
+	initRootCmd[T](rootCmd, clientCtx.TxConfig, moduleManager)
 	if err := autoCliOpts.EnhanceRootCommand(rootCmd); err != nil {
 		panic(err)
 	}
diff --git a/simapp/v2/simdv2/cmd/root_test.go b/simapp/v2/simdv2/cmd/root_test.go
index ebca74ba70b9..a945a9ee8c85 100644
--- a/simapp/v2/simdv2/cmd/root_test.go
+++ b/simapp/v2/simdv2/cmd/root_test.go
@@ -7,7 +7,6 @@ import (
 	"github.com/stretchr/testify/require"
 
 	"cosmossdk.io/core/transaction"
-	serverv2 "cosmossdk.io/server/v2"
 	"cosmossdk.io/simapp/v2"
 	"cosmossdk.io/simapp/v2/simdv2/cmd"
 
@@ -17,7 +16,7 @@ import (
 )
 
 func TestInitCmd(t *testing.T) {
-	rootCmd := cmd.NewRootCmd[serverv2.AppI[transaction.Tx], transaction.Tx]()
+	rootCmd := cmd.NewRootCmd[transaction.Tx]()
 	rootCmd.SetArgs([]string{
 		"init",        // Test the init cmd
 		"simapp-test", // Moniker
@@ -30,7 +29,7 @@ func TestInitCmd(t *testing.T) {
 func TestHomeFlagRegistration(t *testing.T) {
 	homeDir := "/tmp/foo"
 
-	rootCmd := cmd.NewRootCmd[serverv2.AppI[transaction.Tx], transaction.Tx]()
+	rootCmd := cmd.NewRootCmd[transaction.Tx]()
 	rootCmd.SetArgs([]string{
 		"query",
 		fmt.Sprintf("--%s", flags.FlagHome),
diff --git a/simapp/v2/simdv2/cmd/testnet.go b/simapp/v2/simdv2/cmd/testnet.go
index 61387b42301a..407aedc5d2b3 100644
--- a/simapp/v2/simdv2/cmd/testnet.go
+++ b/simapp/v2/simdv2/cmd/testnet.go
@@ -336,8 +336,8 @@ func initTestnetFiles[T transaction.Tx](
 		}
 
 		// Write server config
-		cometServer := cometbft.New[serverv2.AppI[T], T](&temporaryTxDecoder[T]{clientCtx.TxConfig}, cometbft.ServerOptions[T]{}, cometbft.OverwriteDefaultCometConfig(nodeConfig))
-		grpcServer := grpc.New[serverv2.AppI[T], T](grpc.OverwriteDefaultConfig(grpcConfig))
+		cometServer := cometbft.New[T](&temporaryTxDecoder[T]{clientCtx.TxConfig}, cometbft.ServerOptions[T]{}, cometbft.OverwriteDefaultCometConfig(nodeConfig))
+		grpcServer := grpc.New[T](grpc.OverwriteDefaultConfig(grpcConfig))
 		server := serverv2.NewServer(log.NewNopLogger(), cometServer, grpcServer)
 		err = server.WriteConfig(filepath.Join(nodeDir, "config"))
 		if err != nil {
diff --git a/simapp/v2/simdv2/main.go b/simapp/v2/simdv2/main.go
index 6d0502cc676f..eb7d9a1b005b 100644
--- a/simapp/v2/simdv2/main.go
+++ b/simapp/v2/simdv2/main.go
@@ -12,7 +12,7 @@ import (
 )
 
 func main() {
-	rootCmd := cmd.NewRootCmd[serverv2.AppI[transaction.Tx], transaction.Tx]()
+	rootCmd := cmd.NewRootCmd[transaction.Tx]()
 	if err := serverv2.Execute(rootCmd, clientv2helpers.EnvPrefix, simapp.DefaultNodeHome); err != nil {
 		fmt.Fprintln(rootCmd.OutOrStderr(), err)
 		os.Exit(1)
diff --git a/tests/integration/server/grpc/out_of_gas_test.go b/tests/integration/server/grpc/out_of_gas_test.go
new file mode 100644
index 000000000000..f662d2a25ff8
--- /dev/null
+++ b/tests/integration/server/grpc/out_of_gas_test.go
@@ -0,0 +1,98 @@
+package grpc_test
+
+import (
+	"context"
+	"fmt"
+	"testing"
+
+	"github.com/stretchr/testify/suite"
+	"google.golang.org/grpc"
+	"google.golang.org/grpc/metadata"
+
+	_ "cosmossdk.io/x/accounts"
+	_ "cosmossdk.io/x/auth"
+	_ "cosmossdk.io/x/auth/tx/config"
+	_ "cosmossdk.io/x/bank"
+	banktypes "cosmossdk.io/x/bank/types"
+	_ "cosmossdk.io/x/consensus"
+	_ "cosmossdk.io/x/staking"
+
+	"github.com/cosmos/cosmos-sdk/codec"
+	"github.com/cosmos/cosmos-sdk/testutil/configurator"
+	"github.com/cosmos/cosmos-sdk/testutil/network"
+	"github.com/cosmos/cosmos-sdk/testutil/testdata"
+	sdkerrors "github.com/cosmos/cosmos-sdk/types/errors"
+)
+
+type IntegrationTestOutOfGasSuite struct {
+	suite.Suite
+
+	cfg     network.Config
+	network network.NetworkI
+	conn    *grpc.ClientConn
+}
+
+func (s *IntegrationTestOutOfGasSuite) SetupSuite() {
+	var err error
+	s.T().Log("setting up integration test suite")
+
+	s.cfg, err = network.DefaultConfigWithAppConfigWithQueryGasLimit(configurator.NewAppConfig(
+		configurator.AccountsModule(),
+		configurator.AuthModule(),
+		configurator.BankModule(),
+		configurator.GenutilModule(),
+		configurator.StakingModule(),
+		configurator.ConsensusModule(),
+		configurator.TxModule(),
+	), 10)
+	s.NoError(err)
+	s.cfg.NumValidators = 1
+
+	s.network, err = network.New(s.T(), s.T().TempDir(), s.cfg)
+	s.Require().NoError(err)
+
+	_, err = s.network.WaitForHeight(2)
+	s.Require().NoError(err)
+
+	val0 := s.network.GetValidators()[0]
+	s.conn, err = grpc.NewClient(
+		val0.GetAppConfig().GRPC.Address,
+		grpc.WithInsecure(), //nolint:staticcheck // ignore SA1019, we don't need to use a secure connection for tests
+		grpc.WithDefaultCallOptions(grpc.ForceCodec(codec.NewProtoCodec(s.cfg.InterfaceRegistry).GRPCCodec())),
+	)
+	s.Require().NoError(err)
+}
+
+func (s *IntegrationTestOutOfGasSuite) TearDownSuite() {
+	s.T().Log("tearing down integration test suite")
+	s.conn.Close()
+	s.network.Cleanup()
+}
+
+func (s *IntegrationTestOutOfGasSuite) TestGRPCServer_TestService() {
+	// gRPC query to test service should work
+	testClient := testdata.NewQueryClient(s.conn)
+	testRes, err := testClient.Echo(context.Background(), &testdata.EchoRequest{Message: "hello"})
+	s.Require().NoError(err)
+	s.Require().Equal("hello", testRes.Message)
+}
+
+func (s *IntegrationTestOutOfGasSuite) TestGRPCServer_BankBalance_OutOfGas() {
+	val0 := s.network.GetValidators()[0]
+
+	// gRPC query to bank service should work
+	denom := fmt.Sprintf("%stoken", val0.GetMoniker())
+	bankClient := banktypes.NewQueryClient(s.conn)
+	var header metadata.MD
+	_, err := bankClient.Balance(
+		context.Background(),
+		&banktypes.QueryBalanceRequest{Address: val0.GetAddress().String(), Denom: denom},
+		grpc.Header(&header), // Also fetch grpc header
+	)
+
+	s.Require().ErrorContains(err, sdkerrors.ErrOutOfGas.Error())
+}
+
+func TestIntegrationTestOutOfGasSuite(t *testing.T) {
+	suite.Run(t, new(IntegrationTestOutOfGasSuite))
+}
diff --git a/testutil/network/network.go b/testutil/network/network.go
index 0d0e942a9fb2..fb2bbd54ae69 100644
--- a/testutil/network/network.go
+++ b/testutil/network/network.go
@@ -164,6 +164,10 @@ func DefaultConfig(factory TestFixtureFactory) Config {
 }
 
 func DefaultConfigWithAppConfig(appConfig depinject.Config) (Config, error) {
+	return DefaultConfigWithAppConfigWithQueryGasLimit(appConfig, 0)
+}
+
+func DefaultConfigWithAppConfigWithQueryGasLimit(appConfig depinject.Config, queryGasLimit uint64) (Config, error) {
 	var (
 		appBuilder            *runtime.AppBuilder
 		txConfig              client.TxConfig
@@ -221,6 +225,7 @@ func DefaultConfigWithAppConfig(appConfig depinject.Config) (Config, error) {
 			baseapp.SetPruning(pruningtypes.NewPruningOptionsFromString(val.GetAppConfig().Pruning)),
 			baseapp.SetMinGasPrices(val.GetAppConfig().MinGasPrices),
 			baseapp.SetChainID(cfg.ChainID),
+			baseapp.SetQueryGasLimit(queryGasLimit),
 		)
 
 		testdata.RegisterQueryServer(app.GRPCQueryRouter(), testdata.QueryImpl{})
diff --git a/tools/confix/go.mod b/tools/confix/go.mod
index fbd87702c8fc..fc186fed6c14 100644
--- a/tools/confix/go.mod
+++ b/tools/confix/go.mod
@@ -3,7 +3,7 @@ module cosmossdk.io/tools/confix
 go 1.21
 
 require (
-	github.com/cosmos/cosmos-sdk v0.50.7
+	github.com/cosmos/cosmos-sdk v0.50.8
 	github.com/creachadair/atomicfile v0.3.4
 	github.com/creachadair/tomledit v0.0.26
 	github.com/pelletier/go-toml/v2 v2.2.2
@@ -39,7 +39,7 @@ require (
 	github.com/cockroachdb/pebble v1.1.0 // indirect
 	github.com/cockroachdb/redact v1.1.5 // indirect
 	github.com/cockroachdb/tokenbucket v0.0.0-20230807174530-cc333fc44b06 // indirect
-	github.com/cometbft/cometbft v0.38.8 // indirect
+	github.com/cometbft/cometbft v0.38.9 // indirect
 	github.com/cometbft/cometbft-db v0.9.1 // indirect
 	github.com/cosmos/btcutil v1.0.5 // indirect
 	github.com/cosmos/cosmos-db v1.0.2 // indirect
diff --git a/tools/confix/go.sum b/tools/confix/go.sum
index cd83e4075460..5737494ce2ce 100644
--- a/tools/confix/go.sum
+++ b/tools/confix/go.sum
@@ -125,8 +125,8 @@ github.com/cockroachdb/redact v1.1.5/go.mod h1:BVNblN9mBWFyMyqK1k3AAiSxhvhfK2oOZ
 github.com/cockroachdb/tokenbucket v0.0.0-20230807174530-cc333fc44b06 h1:zuQyyAKVxetITBuuhv3BI9cMrmStnpT18zmgmTxunpo=
 github.com/cockroachdb/tokenbucket v0.0.0-20230807174530-cc333fc44b06/go.mod h1:7nc4anLGjupUW/PeY5qiNYsdNXj7zopG+eqsS7To5IQ=
 github.com/codahale/hdrhistogram v0.0.0-20161010025455-3a0bb77429bd/go.mod h1:sE/e/2PUdi/liOCUjSTXgM1o87ZssimdTWN964YiIeI=
-github.com/cometbft/cometbft v0.38.8 h1:XyJ9Cu3xqap6xtNxiemrO8roXZ+KS2Zlu7qQ0w1trvU=
-github.com/cometbft/cometbft v0.38.8/go.mod h1:xOoGZrtUT+A5izWfHSJgl0gYZUE7lu7Z2XIS1vWG/QQ=
+github.com/cometbft/cometbft v0.38.9 h1:cJBJBG0mPKz+sqelCi/hlfZjadZQGdDNnu6YQ1ZsUHQ=
+github.com/cometbft/cometbft v0.38.9/go.mod h1:xOoGZrtUT+A5izWfHSJgl0gYZUE7lu7Z2XIS1vWG/QQ=
 github.com/cometbft/cometbft-db v0.9.1 h1:MIhVX5ja5bXNHF8EYrThkG9F7r9kSfv8BX4LWaxWJ4M=
 github.com/cometbft/cometbft-db v0.9.1/go.mod h1:iliyWaoV0mRwBJoizElCwwRA9Tf7jZJOURcRZF9m60U=
 github.com/containerd/continuity v0.3.0 h1:nisirsYROK15TAMVukJOUyGJjz4BNQJBVsNvAXZJ/eg=
@@ -143,8 +143,8 @@ github.com/cosmos/cosmos-db v1.0.2 h1:hwMjozuY1OlJs/uh6vddqnk9j7VamLv+0DBlbEXbAK
 github.com/cosmos/cosmos-db v1.0.2/go.mod h1:Z8IXcFJ9PqKK6BIsVOB3QXtkKoqUOp1vRvPT39kOXEA=
 github.com/cosmos/cosmos-proto v1.0.0-beta.5 h1:eNcayDLpip+zVLRLYafhzLvQlSmyab+RC5W7ZfmxJLA=
 github.com/cosmos/cosmos-proto v1.0.0-beta.5/go.mod h1:hQGLpiIUloJBMdQMMWb/4wRApmI9hjHH05nefC0Ojec=
-github.com/cosmos/cosmos-sdk v0.50.7 h1:LsBGKxifENR/DN4E1RZaitsyL93HU44x0p8EnMHp4V4=
-github.com/cosmos/cosmos-sdk v0.50.7/go.mod h1:84xDDJEHttRT7NDGwBaUOLVOMN0JNE9x7NbsYIxXs1s=
+github.com/cosmos/cosmos-sdk v0.50.8 h1:2UJHssUaGHTl4/dFp8xyREKAnfiRU6VVfqtKG9n8w5g=
+github.com/cosmos/cosmos-sdk v0.50.8/go.mod h1:Zb+DgHtiByNwgj71IlJBXwOq6dLhtyAq3AgqpXm/jHo=
 github.com/cosmos/go-bip39 v1.0.0 h1:pcomnQdrdH22njcAatO0yWojsUnCO3y2tNoV1cb6hHY=
 github.com/cosmos/go-bip39 v1.0.0/go.mod h1:RNJv0H/pOIVgxw6KS7QeX2a0Uo0aKUlfhZ4xuwvCdJw=
 github.com/cosmos/gogogateway v1.2.0 h1:Ae/OivNhp8DqBi/sh2A8a1D0y638GpL3tkmLQAiKxTE=
diff --git a/x/auth/CHANGELOG.md b/x/auth/CHANGELOG.md
index 6fe1a31ff4c5..594f89f87267 100644
--- a/x/auth/CHANGELOG.md
+++ b/x/auth/CHANGELOG.md
@@ -63,4 +63,5 @@ Ref: https://keepachangelog.com/en/1.0.0/
 * [#19148](https://github.com/cosmos/cosmos-sdk/pull/19148) Checks the consumed gas for verifying a multisig pubKey signature during simulation.
 * [#19239](https://github.com/cosmos/cosmos-sdk/pull/19239) Sets from flag in multi-sign command to avoid no key name provided error.
 * [#19099](https://github.com/cosmos/cosmos-sdk/pull/19099) `verifyIsOnCurve` now checks if we are simulating to avoid malformed public key error.
-* [#20323](https://github.com/cosmos/cosmos-sdk/pull/20323) Ignore undecodable txs in GetBlocksWithTxs.
\ No newline at end of file
+* [#20323](https://github.com/cosmos/cosmos-sdk/pull/20323) Ignore undecodable txs in GetBlocksWithTxs.
+* [#20963](https://github.com/cosmos/cosmos-sdk/pull/20963) UseGrantedFees used to return error with raw addresses. Now it uses addresses in string format.
\ No newline at end of file
diff --git a/x/auth/ante/fee.go b/x/auth/ante/fee.go
index 21b5300fd53c..298fae30a4cc 100644
--- a/x/auth/ante/fee.go
+++ b/x/auth/ante/fee.go
@@ -98,7 +98,15 @@ func (dfd DeductFeeDecorator) checkDeductFee(ctx sdk.Context, sdkTx sdk.Tx, fee
 		} else if !bytes.Equal(feeGranterAddr, feePayer) {
 			err := dfd.feegrantKeeper.UseGrantedFees(ctx, feeGranterAddr, feePayer, fee, sdkTx.GetMsgs())
 			if err != nil {
-				return errorsmod.Wrapf(err, "%s does not allow to pay fees for %s", feeGranter, feePayer)
+				granterAddr, acErr := dfd.accountKeeper.AddressCodec().BytesToString(feeGranter)
+				if acErr != nil {
+					return errorsmod.Wrapf(err, "%s, feeGranter does not allow to pay fees", acErr.Error())
+				}
+				payerAddr, acErr := dfd.accountKeeper.AddressCodec().BytesToString(feePayer)
+				if acErr != nil {
+					return errorsmod.Wrapf(err, "%s, feeGranter does not allow to pay fees", acErr.Error())
+				}
+				return errorsmod.Wrapf(err, "%s does not allow to pay fees for %s", granterAddr, payerAddr)
 			}
 		}