diff --git a/app/app.go b/app/app.go
index 302a3e05..b6eb452b 100644
--- a/app/app.go
+++ b/app/app.go
@@ -170,8 +170,6 @@ const (
 
 var (
 	// TODO review possible capabilities
-	// The last arguments can contain custom message handlers, and custom query handlers,
-	// if we want to allow any custom callbacks
 	// See https://github.com/CosmWasm/cosmwasm/blob/main/docs/CAPABILITIES-BUILT-IN.md
 	wasmCapabilities = []string{"iterator", "stargate", "cosmwasm_1_1", "cosmwasm_1_2", "staking", "babylon"}
 
@@ -739,7 +737,7 @@ func NewBabylonApp(
 		app.GRPCQueryRouter(),
 		homePath,
 		wasmConfig,
-		wasmCapabilities,
+		WasmCapabilities(),
 		authtypes.NewModuleAddress(govtypes.ModuleName).String(),
 		wasmOpts...,
 	)
@@ -747,7 +745,7 @@ func NewBabylonApp(
 	ibcWasmConfig :=
 		ibcwasmtypes.WasmConfig{
 			DataDir:               filepath.Join(homePath, "ibc_08-wasm"),
-			SupportedCapabilities: IBCWasmCapabilities(),
+			SupportedCapabilities: WasmCapabilities(),
 			ContractDebugMode:     false,
 		}
 
@@ -1330,7 +1328,9 @@ func initParamsKeeper(appCodec codec.BinaryCodec, legacyAmino *codec.LegacyAmino
 }
 
 // Capabilities of the IBC wasm contracts
-func IBCWasmCapabilities() []string {
+func WasmCapabilities() []string {
+	// The last arguments can contain custom message handlers, and custom query handlers,
+	// if we want to allow any custom callbacks
 	return []string{
 		"iterator",
 		"stargate",
@@ -1339,5 +1339,6 @@ func IBCWasmCapabilities() []string {
 		"cosmwasm_1_3",
 		"cosmwasm_1_4",
 		"cosmwasm_2_0",
+		"babylon",
 	}
 }
diff --git a/go.mod b/go.mod
index 168ea238..30fd3ecc 100644
--- a/go.mod
+++ b/go.mod
@@ -5,7 +5,7 @@ module github.com/babylonchain/babylon
 require (
 	github.com/CosmWasm/wasmd v0.51.0
 	github.com/btcsuite/btcd v0.24.2
-	github.com/cometbft/cometbft v0.38.6
+	github.com/cometbft/cometbft v0.38.7
 	github.com/cometbft/cometbft-db v0.9.1 // indirect
 	github.com/cosmos/cosmos-sdk v0.50.6
 	github.com/cosmos/ibc-go/modules/light-clients/08-wasm v0.0.0-20240429153234-e1e6da7e4ead
@@ -49,7 +49,7 @@ require (
 	github.com/cosmos/cosmos-proto v1.0.0-beta.5
 	github.com/cosmos/gogoproto v1.4.12
 	github.com/cosmos/ibc-go/modules/capability v1.0.0
-	github.com/cosmos/ibc-go/v8 v8.0.0
+	github.com/cosmos/ibc-go/v8 v8.3.0
 	github.com/decred/dcrd/dcrec/secp256k1/v4 v4.2.0
 	github.com/docker/docker v23.0.8+incompatible
 	github.com/golang/mock v1.6.0
diff --git a/go.sum b/go.sum
index f0292ede..8dfff70f 100644
--- a/go.sum
+++ b/go.sum
@@ -378,8 +378,8 @@ 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 v0.38.6 h1:QSgpCzrGWJ2KUq1qpw+FCfASRpE27T6LQbfEHscdyOk=
-github.com/cometbft/cometbft v0.38.6/go.mod h1:8rSPxzUJYquCN8uuBgbUHOMg2KAwvr7CyUw+6ukO4nw=
+github.com/cometbft/cometbft v0.38.7 h1:ULhIOJ9+LgSy6nLekhq9ae3juX3NnQUMMPyVdhZV6Hk=
+github.com/cometbft/cometbft v0.38.7/go.mod h1:HIyf811dFMI73IE0F7RrnY/Fr+d1+HuJAgtkEpQjCMY=
 github.com/cometbft/cometbft-db v0.9.1 h1:MIhVX5ja5bXNHF8EYrThkG9F7r9kSfv8BX4LWaxWJ4M=
 github.com/cometbft/cometbft-db v0.9.1/go.mod h1:iliyWaoV0mRwBJoizElCwwRA9Tf7jZJOURcRZF9m60U=
 github.com/consensys/bavard v0.1.13 h1:oLhMLOFGTLdlda/kma4VOJazblc7IM5y5QPd2A/YjhQ=
@@ -417,8 +417,8 @@ github.com/cosmos/ibc-go/modules/capability v1.0.0 h1:r/l++byFtn7jHYa09zlAdSeevo
 github.com/cosmos/ibc-go/modules/capability v1.0.0/go.mod h1:D81ZxzjZAe0ZO5ambnvn1qedsFQ8lOwtqicG6liLBco=
 github.com/cosmos/ibc-go/modules/light-clients/08-wasm v0.0.0-20240429153234-e1e6da7e4ead h1:QB50+AmrEVqFr2hzvIxMkICziWQ/uuebze0vNYKMnBg=
 github.com/cosmos/ibc-go/modules/light-clients/08-wasm v0.0.0-20240429153234-e1e6da7e4ead/go.mod h1:AJeroAXnPKeFpD1AfEfjYBHGEWt5gBfzUjgs4SYn2ZY=
-github.com/cosmos/ibc-go/v8 v8.0.0 h1:QKipnr/NGwc+9L7NZipURvmSIu+nw9jOIWTJuDBqOhg=
-github.com/cosmos/ibc-go/v8 v8.0.0/go.mod h1:C6IiJom0F3cIQCD5fKwVPDrDK9j/xTu563AWuOmXois=
+github.com/cosmos/ibc-go/v8 v8.3.0 h1:fdW2S7NjZYFhSwmCaFjjyDv80kI1ePOJDQmco4qrnD0=
+github.com/cosmos/ibc-go/v8 v8.3.0/go.mod h1:izwHZvn9lKrBn8xWj0aXWut6HKcwHMPD3uyuvOJoPSA=
 github.com/cosmos/ics23/go v0.10.0 h1:iXqLLgp2Lp+EdpIuwXTYIQU+AiHj9mOC2X9ab++bZDM=
 github.com/cosmos/ics23/go v0.10.0/go.mod h1:ZfJSmng/TBNTBkFemHHHj5YY7VAU/MBU980F4VU1NG0=
 github.com/cosmos/keyring v1.2.0 h1:8C1lBP9xhImmIabyXW4c3vFjjLiBdGCmfLUfeZlV1Yo=