diff --git a/modules/light-clients/08-wasm/test_data/ics07_tendermint_cw.wasm.gz b/modules/light-clients/08-wasm/test_data/ics07_tendermint_cw.wasm.gz
old mode 100644
new mode 100755
index bef8395ffd3..9f842a016d2
Binary files a/modules/light-clients/08-wasm/test_data/ics07_tendermint_cw.wasm.gz and b/modules/light-clients/08-wasm/test_data/ics07_tendermint_cw.wasm.gz differ
diff --git a/modules/light-clients/08-wasm/test_data/ics10_grandpa_cw.wasm.gz b/modules/light-clients/08-wasm/test_data/ics10_grandpa_cw.wasm.gz
old mode 100644
new mode 100755
index 952179e25df..a5890accf4d
Binary files a/modules/light-clients/08-wasm/test_data/ics10_grandpa_cw.wasm.gz and b/modules/light-clients/08-wasm/test_data/ics10_grandpa_cw.wasm.gz differ
diff --git a/modules/light-clients/08-wasm/types/client_state.go b/modules/light-clients/08-wasm/types/client_state.go
index d11e73d5c1d..164e974c64c 100644
--- a/modules/light-clients/08-wasm/types/client_state.go
+++ b/modules/light-clients/08-wasm/types/client_state.go
@@ -110,22 +110,35 @@ func (cs ClientState) GetTimestampAtHeight(
 	return consState.GetTimestamp(), nil
 }
 
+type instantiateMessage struct {
+	ClientState    *ClientState    `json:"client_state"`
+	ConsensusState *ConsensusState `json:"consensus_state"`
+}
+
 // Initialize checks that the initial consensus state is an 08-wasm consensus state and
 // sets the client state, consensus state in the provided client store.
 // It also initializes the wasm contract for the client.
-func (cs ClientState) Initialize(ctx sdk.Context, marshaler codec.BinaryCodec, clientStore sdk.KVStore, state exported.ConsensusState) error {
+func (cs ClientState) Initialize(ctx sdk.Context, _ codec.BinaryCodec, clientStore sdk.KVStore, state exported.ConsensusState) error {
 	consensusState, ok := state.(*ConsensusState)
 	if !ok {
 		return errorsmod.Wrapf(clienttypes.ErrInvalidConsensus, "invalid initial consensus state. expected type: %T, got: %T",
 			&ConsensusState{}, state)
 	}
-	setClientState(clientStore, marshaler, &cs)
-	setConsensusState(clientStore, marshaler, consensusState, cs.GetLatestHeight())
+
+	payload := instantiateMessage{
+		ClientState:    &cs,
+		ConsensusState: consensusState,
+	}
+
+	encodedData, err := json.Marshal(payload)
+	if err != nil {
+		return errorsmod.Wrapf(err, "failed to marshal payload for wasm contract instantiation")
+	}
 
 	// The global store key can be used here to implement #4085
 	// wasmStore := ctx.KVStore(WasmStoreKey)
 
-	_, err := initContract(ctx, clientStore, cs.CodeHash)
+	_, err := initContract(ctx, clientStore, cs.CodeHash, encodedData)
 	if err != nil {
 		return errorsmod.Wrapf(err, "failed to initialize contract")
 	}
diff --git a/modules/light-clients/08-wasm/types/store.go b/modules/light-clients/08-wasm/types/store.go
index 7ebbf3fc320..f7ec241a9c6 100644
--- a/modules/light-clients/08-wasm/types/store.go
+++ b/modules/light-clients/08-wasm/types/store.go
@@ -96,20 +96,6 @@ func (ws updateProposalWrappedStore) getStore(key []byte) sdk.KVStore {
 	return ws.substituteStore
 }
 
-// setClientState stores the client state.
-func setClientState(clientStore sdk.KVStore, cdc codec.BinaryCodec, clientState *ClientState) {
-	key := host.ClientStateKey()
-	val := clienttypes.MustMarshalClientState(cdc, clientState)
-	clientStore.Set(key, val)
-}
-
-// setConsensusState stores the consensus state at the given height.
-func setConsensusState(clientStore sdk.KVStore, cdc codec.BinaryCodec, consensusState *ConsensusState, height exported.Height) {
-	key := host.ConsensusStateKey(height)
-	val := clienttypes.MustMarshalConsensusState(cdc, consensusState)
-	clientStore.Set(key, val)
-}
-
 // getConsensusState retrieves the consensus state from the client prefixed
 // store. An error is returned if the consensus state does not exist or it cannot be unmarshalled.
 func GetConsensusState(clientStore sdk.KVStore, cdc codec.BinaryCodec, height exported.Height) (*ConsensusState, error) {
diff --git a/modules/light-clients/08-wasm/types/vm.go b/modules/light-clients/08-wasm/types/vm.go
index 1486e5acc67..15ca15aa041 100644
--- a/modules/light-clients/08-wasm/types/vm.go
+++ b/modules/light-clients/08-wasm/types/vm.go
@@ -47,7 +47,7 @@ func (r contractResult) Error() string {
 }
 
 // initContract calls vm.Init with appropriate arguments.
-func initContract(ctx sdk.Context, clientStore sdk.KVStore, codeHash []byte) (*wasmvmtypes.Response, error) {
+func initContract(ctx sdk.Context, clientStore sdk.KVStore, codeHash []byte, msg []byte) (*wasmvmtypes.Response, error) {
 	sdkGasMeter := ctx.GasMeter()
 	multipliedGasMeter := NewMultipliedGasMeter(sdkGasMeter, VMGasRegister)
 	gasLimit := VMGasRegister.runtimeGasForContract(ctx)
@@ -59,9 +59,8 @@ func initContract(ctx sdk.Context, clientStore sdk.KVStore, codeHash []byte) (*w
 		Funds:  nil,
 	}
 
-	initMsg := []byte("{}")
-	ctx.GasMeter().ConsumeGas(VMGasRegister.NewContractInstanceCosts(len(initMsg)), "Loading CosmWasm module: instantiate")
-	response, gasUsed, err := WasmVM.Instantiate(codeHash, env, msgInfo, initMsg, newStoreAdapter(clientStore), cosmwasm.GoAPI{}, nil, multipliedGasMeter, gasLimit, costJSONDeserialization)
+	ctx.GasMeter().ConsumeGas(VMGasRegister.NewContractInstanceCosts(len(msg)), "Loading CosmWasm module: instantiate")
+	response, gasUsed, err := WasmVM.Instantiate(codeHash, env, msgInfo, msg, newStoreAdapter(clientStore), cosmwasm.GoAPI{}, nil, multipliedGasMeter, gasLimit, costJSONDeserialization)
 	VMGasRegister.consumeRuntimeGas(ctx, gasUsed)
 	return response, err
 }