diff --git a/core/state/candidates/candidates.go b/core/state/candidates/candidates.go
index d9ec607c7..05ab96a27 100644
--- a/core/state/candidates/candidates.go
+++ b/core/state/candidates/candidates.go
@@ -10,6 +10,7 @@ import (
 	"github.com/MinterTeam/minter-go-node/helpers"
 	"github.com/MinterTeam/minter-go-node/rlp"
 	"github.com/MinterTeam/minter-go-node/tree"
+	"github.com/MinterTeam/minter-go-node/upgrades"
 	"math/big"
 	"sort"
 	"sync"
@@ -219,6 +220,16 @@ func (c *Candidates) GetCandidateByTendermintAddress(address types.TmAddress) *C
 }
 
 func (c *Candidates) RecalculateStakes(height uint64) {
+	if height >= upgrades.UpgradeBlock3 {
+		c.recalculateStakesNew(height)
+	} else if height >= upgrades.UpgradeBlock2 {
+		c.recalculateStakesOld2(height)
+	} else {
+		c.recalculateStakesOld1(height)
+	}
+}
+
+func (c *Candidates) recalculateStakesOld1(height uint64) {
 	coinsCache := newCoinsCache()
 
 	for _, pubkey := range c.getOrderedCandidates() {
@@ -313,6 +324,199 @@ func (c *Candidates) RecalculateStakes(height uint64) {
 	}
 }
 
+func (c *Candidates) recalculateStakesOld2(height uint64) {
+	coinsCache := newCoinsCache()
+
+	for _, pubkey := range c.getOrderedCandidates() {
+		candidate := c.getFromMap(pubkey)
+		stakes := c.GetStakes(candidate.PubKey)
+		for _, stake := range stakes {
+			stake.setBipValue(c.calculateBipValue(stake.Coin, stake.Value, false, true, coinsCache))
+		}
+
+		// apply updates for existing stakes
+		candidate.FilterUpdates()
+		for _, update := range candidate.updates {
+			stake := c.GetStakeOfAddress(candidate.PubKey, update.Owner, update.Coin)
+			if stake != nil {
+				stake.addValue(update.Value)
+				update.setValue(big.NewInt(0))
+				stake.setBipValue(c.calculateBipValue(stake.Coin, stake.Value, false, true, coinsCache))
+			}
+		}
+
+		candidate.FilterUpdates()
+		for _, update := range candidate.updates {
+			update.setBipValue(c.calculateBipValue(update.Coin, update.Value, false, true, coinsCache))
+		}
+
+		for _, update := range candidate.updates {
+			// find and replace smallest stake
+			index := -1
+			var smallestStake *big.Int
+
+			if len(stakes) == 0 {
+				index = 0
+				smallestStake = big.NewInt(0)
+			} else if len(stakes) < MaxDelegatorsPerCandidate {
+				for i, stake := range stakes {
+					if stake == nil {
+						index = i
+						break
+					}
+				}
+
+				if index == -1 {
+					index = len(stakes)
+				}
+
+				smallestStake = big.NewInt(0)
+			} else {
+				for i, stake := range stakes {
+					if stake == nil {
+						index = i
+						smallestStake = big.NewInt(0)
+						break
+					}
+
+					if smallestStake == nil || smallestStake.Cmp(stake.BipValue) == 1 {
+						smallestStake = big.NewInt(0).Set(stake.BipValue)
+						index = i
+					}
+				}
+			}
+
+			if index == -1 || smallestStake.Cmp(update.BipValue) == 1 {
+				c.bus.Events().AddEvent(uint32(height), eventsdb.UnbondEvent{
+					Address:         update.Owner,
+					Amount:          update.Value.String(),
+					Coin:            update.Coin,
+					ValidatorPubKey: candidate.PubKey,
+				})
+				c.bus.Accounts().AddBalance(update.Owner, update.Coin, update.Value)
+				c.bus.Checker().AddCoin(update.Coin, big.NewInt(0).Neg(update.Value))
+				update.setValue(big.NewInt(0))
+				continue
+			}
+
+			if len(stakes) > index && stakes[index] != nil {
+				c.bus.Events().AddEvent(uint32(height), eventsdb.UnbondEvent{
+					Address:         stakes[index].Owner,
+					Amount:          stakes[index].Value.String(),
+					Coin:            stakes[index].Coin,
+					ValidatorPubKey: candidate.PubKey,
+				})
+				c.bus.Accounts().AddBalance(stakes[index].Owner, stakes[index].Coin, stakes[index].Value)
+				c.bus.Checker().AddCoin(stakes[index].Coin, big.NewInt(0).Neg(stakes[index].Value))
+			}
+
+			candidate.SetStakeAtIndex(index, update, true)
+			stakes = c.GetStakes(candidate.PubKey)
+		}
+
+		candidate.clearUpdates()
+
+		totalBipValue := big.NewInt(0)
+		for _, stake := range c.GetStakes(candidate.PubKey) {
+			if stake == nil {
+				continue
+			}
+			totalBipValue.Add(totalBipValue, stake.BipValue)
+		}
+
+		candidate.setTotalBipStake(totalBipValue)
+		candidate.updateStakesCount()
+	}
+}
+
+func (c *Candidates) recalculateStakesNew(height uint64) {
+	coinsCache := newCoinsCache()
+
+	for _, pubkey := range c.getOrderedCandidates() {
+		candidate := c.getFromMap(pubkey)
+		stakes := &candidate.stakes
+		for _, stake := range stakes {
+			if stake == nil {
+				continue
+			}
+			stake.setBipValue(c.calculateBipValue(stake.Coin, stake.Value, false, true, coinsCache))
+		}
+
+		// apply updates for existing stakes
+		for _, update := range candidate.updates {
+			stake := c.GetStakeOfAddress(candidate.PubKey, update.Owner, update.Coin)
+			if stake != nil {
+				stake.addValue(update.Value)
+				update.setValue(big.NewInt(0))
+				stake.setBipValue(c.calculateBipValue(stake.Coin, stake.Value, false, true, coinsCache))
+			}
+		}
+
+		candidate.FilterUpdates()
+		for _, update := range candidate.updates {
+			update.setBipValue(c.calculateBipValue(update.Coin, update.Value, false, true, coinsCache))
+		}
+
+		for _, update := range candidate.updates {
+			// find and replace smallest stake
+			index := -1
+			var smallestStake *big.Int
+
+			for i, stake := range stakes {
+				if stake == nil {
+					index = i
+					smallestStake = big.NewInt(0)
+					break
+				}
+
+				if smallestStake == nil || smallestStake.Cmp(stake.BipValue) == 1 {
+					smallestStake = big.NewInt(0).Set(stake.BipValue)
+					index = i
+				}
+			}
+
+			if index == -1 || smallestStake.Cmp(update.BipValue) == 1 {
+				c.bus.Events().AddEvent(uint32(height), eventsdb.UnbondEvent{
+					Address:         update.Owner,
+					Amount:          update.Value.String(),
+					Coin:            update.Coin,
+					ValidatorPubKey: candidate.PubKey,
+				})
+				c.bus.Accounts().AddBalance(update.Owner, update.Coin, update.Value)
+				c.bus.Checker().AddCoin(update.Coin, big.NewInt(0).Neg(update.Value))
+				update.setValue(big.NewInt(0))
+				continue
+			}
+
+			if len(stakes) > index && stakes[index] != nil {
+				c.bus.Events().AddEvent(uint32(height), eventsdb.UnbondEvent{
+					Address:         stakes[index].Owner,
+					Amount:          stakes[index].Value.String(),
+					Coin:            stakes[index].Coin,
+					ValidatorPubKey: candidate.PubKey,
+				})
+				c.bus.Accounts().AddBalance(stakes[index].Owner, stakes[index].Coin, stakes[index].Value)
+				c.bus.Checker().AddCoin(stakes[index].Coin, big.NewInt(0).Neg(stakes[index].Value))
+			}
+
+			candidate.SetStakeAtIndex(index, update, true)
+		}
+
+		candidate.clearUpdates()
+
+		totalBipValue := big.NewInt(0)
+		for _, stake := range stakes {
+			if stake == nil {
+				continue
+			}
+			totalBipValue.Add(totalBipValue, stake.BipValue)
+		}
+
+		candidate.setTotalBipStake(totalBipValue)
+		candidate.updateStakesCount()
+	}
+}
+
 func (c *Candidates) Exists(pubkey types.Pubkey) bool {
 	c.lock.RLock()
 	defer c.lock.RUnlock()
diff --git a/core/state/candidates/model.go b/core/state/candidates/model.go
index 5d800d2c1..6b6830b09 100644
--- a/core/state/candidates/model.go
+++ b/core/state/candidates/model.go
@@ -4,6 +4,7 @@ import (
 	"github.com/MinterTeam/minter-go-node/core/types"
 	"github.com/tendermint/tendermint/crypto/ed25519"
 	"math/big"
+	"sort"
 )
 
 type Candidate struct {
@@ -105,6 +106,37 @@ func (candidate *Candidate) GetFilteredUpdates() []*Stake {
 	return updates
 }
 
+func (candidate *Candidate) FilterUpdates() {
+	var updates []*Stake
+	for _, update := range candidate.updates {
+		// skip updates with 0 stakes
+		if update.Value.Cmp(big.NewInt(0)) != 1 {
+			continue
+		}
+
+		// merge updates
+		merged := false
+		for _, u := range updates {
+			if u.Coin == update.Coin && u.Owner == update.Owner {
+				u.Value.Add(u.Value, update.Value)
+				merged = true
+				break
+			}
+		}
+
+		if !merged {
+			updates = append(updates, update)
+		}
+	}
+
+	sort.SliceStable(updates, func(i, j int) bool {
+		return updates[i].BipValue.Cmp(updates[j].BipValue) == 1
+	})
+
+	candidate.updates = updates
+	candidate.isUpdatesDirty = true
+}
+
 func (candidate *Candidate) updateStakesCount() {
 	count := 0
 	for _, stake := range candidate.stakes {
diff --git a/core/state/candidates_test.go b/core/state/candidates_test.go
index 6ca43b1d6..2162f4cc9 100644
--- a/core/state/candidates_test.go
+++ b/core/state/candidates_test.go
@@ -6,12 +6,15 @@ import (
 	eventsdb "github.com/MinterTeam/events-db"
 	"github.com/MinterTeam/minter-go-node/core/state/candidates"
 	"github.com/MinterTeam/minter-go-node/core/types"
+	"github.com/MinterTeam/minter-go-node/upgrades"
 	"github.com/tendermint/tendermint/crypto/ed25519"
 	db "github.com/tendermint/tm-db"
 	"math/big"
 	"testing"
 )
 
+const height = upgrades.UpgradeBlock2
+
 func TestSimpleDelegate(t *testing.T) {
 	st := getState()
 
@@ -21,7 +24,7 @@ func TestSimpleDelegate(t *testing.T) {
 	pubkey := createTestCandidate(st)
 
 	st.Candidates.Delegate(address, pubkey, coin, amount, big.NewInt(0))
-	st.Candidates.RecalculateStakes(1)
+	st.Candidates.RecalculateStakes(height)
 
 	stake := st.Candidates.GetStakeOfAddress(pubkey, address, coin)
 	if stake == nil {
@@ -51,7 +54,7 @@ func TestDelegate(t *testing.T) {
 		totalAmount.Add(totalAmount, amount)
 	}
 
-	st.Candidates.RecalculateStakes(1)
+	st.Candidates.RecalculateStakes(height)
 
 	stake := st.Candidates.GetStakeOfAddress(pubkey, address, coin)
 	if stake == nil {
@@ -80,7 +83,7 @@ func TestComplexDelegate(t *testing.T) {
 		st.Candidates.Delegate(addr, pubkey, coin, amount, big.NewInt(0))
 	}
 
-	st.Candidates.RecalculateStakes(1)
+	st.Candidates.RecalculateStakes(height)
 
 	for i := uint64(0); i < 1000; i++ {
 		var addr types.Address
@@ -116,7 +119,7 @@ func TestComplexDelegate(t *testing.T) {
 		binary.BigEndian.PutUint64(addr[:], 3000)
 		st.Candidates.Delegate(addr, pubkey, coin, big.NewInt(3000), big.NewInt(0))
 
-		st.Candidates.RecalculateStakes(1)
+		st.Candidates.RecalculateStakes(height)
 
 		replacedAddress := types.HexToAddress("Mx00000000000003e7000000000000000000000000")
 		stake := st.Candidates.GetStakeOfAddress(pubkey, replacedAddress, coin)
@@ -139,7 +142,7 @@ func TestComplexDelegate(t *testing.T) {
 		binary.BigEndian.PutUint64(addr2[:], 3500)
 		st.Candidates.Delegate(addr2, pubkey, coin, big.NewInt(3500), big.NewInt(0))
 
-		st.Candidates.RecalculateStakes(1)
+		st.Candidates.RecalculateStakes(height)
 
 		stake := st.Candidates.GetStakeOfAddress(pubkey, addr, coin)
 		if stake == nil {
@@ -158,7 +161,7 @@ func TestComplexDelegate(t *testing.T) {
 		binary.BigEndian.PutUint64(addr[:], 4001)
 		st.Candidates.Delegate(addr, pubkey, coin, big.NewInt(900), big.NewInt(0))
 
-		st.Candidates.RecalculateStakes(1)
+		st.Candidates.RecalculateStakes(height)
 
 		stake := st.Candidates.GetStakeOfAddress(pubkey, addr, coin)
 		if stake != nil {
@@ -180,7 +183,7 @@ func TestStakeSufficiency(t *testing.T) {
 		st.Candidates.Delegate(addr, pubkey, coin, amount, big.NewInt(0))
 	}
 
-	st.Candidates.RecalculateStakes(1)
+	st.Candidates.RecalculateStakes(height)
 
 	{
 		stake := big.NewInt(1)
@@ -227,7 +230,7 @@ func TestDoubleSignPenalty(t *testing.T) {
 	binary.BigEndian.PutUint64(addr[:], 1)
 	st.Candidates.Delegate(addr, pubkey, coin, amount, big.NewInt(0))
 
-	st.Candidates.RecalculateStakes(1)
+	st.Candidates.RecalculateStakes(height)
 
 	var pk ed25519.PubKeyEd25519
 	copy(pk[:], pubkey[:])
@@ -274,7 +277,7 @@ func TestAbsentPenalty(t *testing.T) {
 	binary.BigEndian.PutUint64(addr[:], 1)
 	st.Candidates.Delegate(addr, pubkey, coin, amount, big.NewInt(0))
 
-	st.Candidates.RecalculateStakes(1)
+	st.Candidates.RecalculateStakes(height)
 
 	var pk ed25519.PubKeyEd25519
 	copy(pk[:], pubkey[:])
@@ -305,7 +308,7 @@ func TestDoubleAbsentPenalty(t *testing.T) {
 	st.Candidates.Delegate(addr, pubkey, coin, amount, big.NewInt(0))
 	st.Candidates.SetOnline(pubkey)
 
-	st.Candidates.RecalculateStakes(1)
+	st.Candidates.RecalculateStakes(height)
 
 	var pk ed25519.PubKeyEd25519
 	copy(pk[:], pubkey[:])
diff --git a/core/transaction/declare_candidacy_test.go b/core/transaction/declare_candidacy_test.go
index 4749cf40d..48e710afb 100644
--- a/core/transaction/declare_candidacy_test.go
+++ b/core/transaction/declare_candidacy_test.go
@@ -8,6 +8,7 @@ import (
 	"github.com/MinterTeam/minter-go-node/crypto"
 	"github.com/MinterTeam/minter-go-node/helpers"
 	"github.com/MinterTeam/minter-go-node/rlp"
+	"github.com/MinterTeam/minter-go-node/upgrades"
 	"math/big"
 	"sync"
 	"testing"
@@ -113,7 +114,7 @@ func TestDeclareCandidacyTxOverflow(t *testing.T) {
 		cState.Candidates.Delegate(types.Address{}, pubkey, types.GetBaseCoin(), helpers.BipToPip(big.NewInt(10)), helpers.BipToPip(big.NewInt(10)))
 	}
 
-	cState.Candidates.RecalculateStakes(0)
+	cState.Candidates.RecalculateStakes(upgrades.UpgradeBlock2)
 
 	privateKey, _ := crypto.GenerateKey()
 	addr := crypto.PubkeyToAddress(privateKey.PublicKey)
diff --git a/core/transaction/delegate_test.go b/core/transaction/delegate_test.go
index df108c344..c70d8235f 100644
--- a/core/transaction/delegate_test.go
+++ b/core/transaction/delegate_test.go
@@ -6,6 +6,7 @@ import (
 	"github.com/MinterTeam/minter-go-node/crypto"
 	"github.com/MinterTeam/minter-go-node/helpers"
 	"github.com/MinterTeam/minter-go-node/rlp"
+	"github.com/MinterTeam/minter-go-node/upgrades"
 	"math/big"
 	"math/rand"
 	"sync"
@@ -80,7 +81,7 @@ func TestDelegateTx(t *testing.T) {
 		t.Fatalf("Target %s balance is not correct. Expected %s, got %s", coin, targetBalance, balance)
 	}
 
-	cState.Candidates.RecalculateStakes(1)
+	cState.Candidates.RecalculateStakes(upgrades.UpgradeBlock2)
 
 	stake := cState.Candidates.GetStakeOfAddress(pubkey, addr, coin)
 
diff --git a/core/transaction/unbond_test.go b/core/transaction/unbond_test.go
index 6c7ee808e..69e6efff9 100644
--- a/core/transaction/unbond_test.go
+++ b/core/transaction/unbond_test.go
@@ -5,6 +5,7 @@ import (
 	"github.com/MinterTeam/minter-go-node/crypto"
 	"github.com/MinterTeam/minter-go-node/helpers"
 	"github.com/MinterTeam/minter-go-node/rlp"
+	"github.com/MinterTeam/minter-go-node/upgrades"
 	"math/big"
 	"sync"
 	"testing"
@@ -24,7 +25,7 @@ func TestUnbondTx(t *testing.T) {
 	value := helpers.BipToPip(big.NewInt(100))
 	cState.Candidates.Delegate(addr, pubkey, coin, value, big.NewInt(0))
 
-	cState.Candidates.RecalculateStakes(1)
+	cState.Candidates.RecalculateStakes(upgrades.UpgradeBlock2)
 
 	data := UnbondData{
 		PubKey: pubkey,
@@ -64,7 +65,7 @@ func TestUnbondTx(t *testing.T) {
 		t.Fatalf("Response code is not 0. Error %s", response.Log)
 	}
 
-	cState.Candidates.RecalculateStakes(1)
+	cState.Candidates.RecalculateStakes(upgrades.UpgradeBlock2)
 
 	targetBalance, _ := big.NewInt(0).SetString("999999800000000000000000", 10)
 	balance := cState.Accounts.GetBalance(addr, coin)
diff --git a/upgrades/blocks.go b/upgrades/blocks.go
index 97617c5bf..785f7f300 100644
--- a/upgrades/blocks.go
+++ b/upgrades/blocks.go
@@ -1,3 +1,5 @@
 package upgrades
 
 const UpgradeBlock1 = 0
+const UpgradeBlock2 = 0
+const UpgradeBlock3 = 0
diff --git a/upgrades/grace.go b/upgrades/grace.go
index 98540e9f6..869fa4bc0 100644
--- a/upgrades/grace.go
+++ b/upgrades/grace.go
@@ -3,6 +3,8 @@ package upgrades
 var gracePeriods = []*gracePeriod{
 	NewGracePeriod(1, 120),
 	NewGracePeriod(UpgradeBlock1, UpgradeBlock1+120),
+	NewGracePeriod(UpgradeBlock2, UpgradeBlock2+120),
+	NewGracePeriod(UpgradeBlock3, UpgradeBlock3+120),
 }
 
 type gracePeriod struct {
diff --git a/version/version.go b/version/version.go
index 36371a42a..6d46097ee 100755
--- a/version/version.go
+++ b/version/version.go
@@ -4,14 +4,14 @@ package version
 const (
 	Maj = "1"
 	Min = "1"
-	Fix = "1"
+	Fix = "3"
 
 	AppVer = 6
 )
 
 var (
 	// Must be a string because scripts like dist.sh read this file.
-	Version = "1.1.1-testnet"
+	Version = "1.1.3-testnet"
 
 	// GitCommit is the current HEAD set using ldflags.
 	GitCommit string