diff --git a/baseapp/abci.go b/baseapp/abci.go
index bb9fb0566ab5..daad19ba165f 100644
--- a/baseapp/abci.go
+++ b/baseapp/abci.go
@@ -14,6 +14,7 @@ import (
 	"github.com/gogo/protobuf/proto"
 	abci "github.com/tendermint/tendermint/abci/types"
 	tmproto "github.com/tendermint/tendermint/proto/tendermint/types"
+	tmversion "github.com/tendermint/tendermint/proto/tendermint/version"
 	"google.golang.org/grpc/codes"
 	grpcstatus "google.golang.org/grpc/status"
 
@@ -38,12 +39,15 @@ func (app *BaseApp) InitChain(req abci.RequestInitChain) (res abci.ResponseInitC
 	// On a new chain, we consider the init chain block height as 0, even though
 	// req.InitialHeight is 1 by default.
 	initHeader := tmproto.Header{ChainID: req.ChainId, Time: req.Time}
+	if req.ConsensusParams != nil && req.ConsensusParams.Version != nil {
+		initHeader.Version = tmversion.Consensus{App: req.ConsensusParams.Version.AppVersion}
+	}
 
 	// If req.InitialHeight is > 1, then we set the initial version in the
 	// stores.
 	if req.InitialHeight > 1 {
 		app.initialHeight = req.InitialHeight
-		initHeader = tmproto.Header{ChainID: req.ChainId, Height: req.InitialHeight, Time: req.Time}
+		initHeader.Height = req.InitialHeight
 		err := app.cms.SetInitialVersion(req.InitialHeight)
 		if err != nil {
 			panic(err)
@@ -131,8 +135,8 @@ func (app *BaseApp) Info(req abci.RequestInfo) abci.ResponseInfo {
 		if err != nil {
 			panic(err)
 		}
-		// get and set the app version
-		_ = app.AppVersion(ctx)
+		// initialise the app version by checking if it is already in state
+		app.InitAppVersion(ctx)
 	}
 	return abci.ResponseInfo{
 		Data:             app.name,
diff --git a/baseapp/baseapp.go b/baseapp/baseapp.go
index c9877ddb012a..04274f31ecf2 100644
--- a/baseapp/baseapp.go
+++ b/baseapp/baseapp.go
@@ -202,15 +202,17 @@ func (app *BaseApp) Name() string {
 	return app.name
 }
 
-// AppVersion returns the application's protocol version.
-func (app *BaseApp) AppVersion(ctx sdk.Context) uint64 {
+func (app *BaseApp) InitAppVersion(ctx sdk.Context) {
 	if app.appVersion == 0 && app.paramStore.Has(ctx, ParamStoreKeyVersionParams) {
 		var vp tmproto.VersionParams
-
 		app.paramStore.Get(ctx, ParamStoreKeyVersionParams, &vp)
 		// set the app version
 		app.appVersion = vp.AppVersion
 	}
+}
+
+// AppVersion returns the application's protocol version.
+func (app *BaseApp) AppVersion() uint64 {
 	return app.appVersion
 }
 
diff --git a/baseapp/options.go b/baseapp/options.go
index ba29aa977f36..953ede102e17 100644
--- a/baseapp/options.go
+++ b/baseapp/options.go
@@ -113,9 +113,7 @@ func (app *BaseApp) SetVersion(v string) {
 
 // SetAppVersion sets the application's protocol version
 func (app *BaseApp) SetAppVersion(ctx sdk.Context, version uint64) {
-	// TODO: could make this less hacky in the future since the SDK
-	// shouldn't have to know about the app versioning scheme
-	if version >= 2 {
+	if app.paramStore.Has(ctx, ParamStoreKeyVersionParams) {
 		vp := &tmproto.VersionParams{AppVersion: version}
 		app.paramStore.Set(ctx, ParamStoreKeyVersionParams, vp)
 	}
diff --git a/x/upgrade/keeper/keeper_test.go b/x/upgrade/keeper/keeper_test.go
index b37ebcb62339..19fee1054ec9 100644
--- a/x/upgrade/keeper/keeper_test.go
+++ b/x/upgrade/keeper/keeper_test.go
@@ -203,7 +203,7 @@ func (s *KeeperTestSuite) TestSetUpgradedClient() {
 // Test that the protocol version successfully increments after an
 // upgrade and is successfully set on BaseApp's appVersion.
 func (s *KeeperTestSuite) TestIncrementProtocolVersion() {
-	oldProtocolVersion := s.app.BaseApp.AppVersion(s.ctx)
+	oldProtocolVersion := s.app.BaseApp.AppVersion()
 	s.app.UpgradeKeeper.SetUpgradeHandler("dummy", func(_ sdk.Context, _ types.Plan, vm module.VersionMap) (module.VersionMap, error) { return vm, nil })
 	dummyPlan := types.Plan{
 		Name:   "dummy",
@@ -211,7 +211,7 @@ func (s *KeeperTestSuite) TestIncrementProtocolVersion() {
 		Height: 100,
 	}
 	s.app.UpgradeKeeper.ApplyUpgrade(s.ctx, dummyPlan)
-	upgradedProtocolVersion := s.app.BaseApp.AppVersion(s.ctx)
+	upgradedProtocolVersion := s.app.BaseApp.AppVersion()
 
 	s.Require().Equal(oldProtocolVersion+1, upgradedProtocolVersion)
 }