diff --git a/PENDING.md b/PENDING.md
index 07d9a50046c4..3207cce49d54 100644
--- a/PENDING.md
+++ b/PENDING.md
@@ -96,5 +96,6 @@ CLI flag.
   where validator is unexpectedly slashed throwing off test calculations
 * [\#3411] Include the `RequestInitChain.Time` in the block header init during
 `InitChain`.
+* [\#3726] Cap(clip) reward to remaining coins in AllocateTokens.
 
 ### Tendermint
diff --git a/types/dec_coin.go b/types/dec_coin.go
index 538ea1c8c241..fe0dc9da7488 100644
--- a/types/dec_coin.go
+++ b/types/dec_coin.go
@@ -278,6 +278,20 @@ func (coins DecCoins) SafeSub(coinsB DecCoins) (DecCoins, bool) {
 	return diff, diff.IsAnyNegative()
 }
 
+// Trims any denom amount from coin which exceeds that of coinB,
+// such that (coin.Cap(coinB)).IsLTE(coinB).
+func (coins DecCoins) Cap(coinsB DecCoins) DecCoins {
+	res := make([]DecCoin, len(coins))
+	for i, coin := range coins {
+		minCoin := DecCoin{
+			Denom:  coin.Denom,
+			Amount: MinDec(coin.Amount, coinsB.AmountOf(coin.Denom)),
+		}
+		res[i] = minCoin
+	}
+	return removeZeroDecCoins(res)
+}
+
 // IsAnyNegative returns true if there is at least one coin whose amount
 // is negative; returns false otherwise. It returns false if the DecCoins set
 // is empty too.
diff --git a/types/dec_coin_test.go b/types/dec_coin_test.go
index a5a0b7876de8..d5ddec2da5da 100644
--- a/types/dec_coin_test.go
+++ b/types/dec_coin_test.go
@@ -224,3 +224,35 @@ func TestDecCoinsString(t *testing.T) {
 		require.Equal(t, tc.expected, out, "unexpected result for test case #%d, input: %v", i, tc.input)
 	}
 }
+
+func TestDecCoinsCap(t *testing.T) {
+	testCases := []struct {
+		input1         string
+		input2         string
+		expectedResult string
+	}{
+		{"", "", ""},
+		{"1.0stake", "", ""},
+		{"1.0stake", "1.0stake", "1.0stake"},
+		{"", "1.0stake", ""},
+		{"1.0stake", "", ""},
+		{"2.0stake,1.0trope", "1.9stake", "1.9stake"},
+		{"2.0stake,1.0trope", "2.1stake", "2.0stake"},
+		{"2.0stake,1.0trope", "0.9trope", "0.9trope"},
+		{"2.0stake,1.0trope", "1.9stake,0.9trope", "1.9stake,0.9trope"},
+		{"2.0stake,1.0trope", "1.9stake,0.9trope,20.0other", "1.9stake,0.9trope"},
+		{"2.0stake,1.0trope", "1.0other", ""},
+	}
+
+	for i, tc := range testCases {
+		in1, err := ParseDecCoins(tc.input1)
+		require.NoError(t, err, "unexpected parse error in %v", i)
+		in2, err := ParseDecCoins(tc.input2)
+		require.NoError(t, err, "unexpected parse error in %v", i)
+		exr, err := ParseDecCoins(tc.expectedResult)
+		require.NoError(t, err, "unexpected parse error in %v", i)
+
+		require.True(t, in1.Cap(in2).IsEqual(exr), "in1.cap(in2) != exr in %v", i)
+		// require.Equal(t, tc.expectedResult, in1.Cap(in2).String(), "in1.cap(in2) != exr in %v", i)
+	}
+}
diff --git a/x/distribution/keeper/allocation.go b/x/distribution/keeper/allocation.go
index 3f6c423c0291..f32e47d0256e 100644
--- a/x/distribution/keeper/allocation.go
+++ b/x/distribution/keeper/allocation.go
@@ -48,10 +48,11 @@ func (k Keeper) AllocateTokens(ctx sdk.Context, sumPrecommitPower, totalPower in
 	for _, vote := range votes {
 		validator := k.stakingKeeper.ValidatorByConsAddr(ctx, vote.Validator.Address)
 
-		// TODO likely we should only reward validators who actually signed the block.
+		// TODO consider microslashing for missing votes.
 		// ref https://github.com/cosmos/cosmos-sdk/issues/2525#issuecomment-430838701
 		powerFraction := sdk.NewDec(vote.Validator.Power).QuoTruncate(sdk.NewDec(totalPower))
 		reward := feesCollected.MulDecTruncate(voteMultiplier).MulDecTruncate(powerFraction)
+		reward = reward.Cap(remaining)
 		k.AllocateTokensToValidator(ctx, validator, reward)
 		remaining = remaining.Sub(reward)
 	}