diff --git a/spec/abci/abci.md b/spec/abci/abci.md
index 71b94e6c0..ea5b6f708 100644
--- a/spec/abci/abci.md
+++ b/spec/abci/abci.md
@@ -596,7 +596,8 @@ via light client.
   - `Block (BlockParams)`: Parameters limiting the size of a block and time between consecutive blocks.
   - `Evidence (EvidenceParams)`: Parameters limiting the validity of
     evidence of byzantine behaviour.
-  - `Validator (ValidatorParams)`: Parameters limitng the types of pubkeys validators can use.
+  - `Validator (ValidatorParams)`: Parameters limiting the types of pubkeys validators can use.
+  - `Version (VersionParams)`: The ABCI application version.
 
 ### BlockParams
 
@@ -631,6 +632,11 @@ via light client.
   - `PubKeyTypes ([]string)`: List of accepted pubkey types. Uses same
     naming as `PubKey.Type`.
 
+### VersionParams
+
+- **Fields**:
+  - `AppVersion (uint64)`: The ABCI application version.
+
 ### Proof
 
 - **Fields**:
diff --git a/spec/blockchain/blockchain.md b/spec/blockchain/blockchain.md
index aebb492b0..38b87eabc 100644
--- a/spec/blockchain/blockchain.md
+++ b/spec/blockchain/blockchain.md
@@ -67,16 +67,16 @@ Further details on each of these fields is described below.
 
 ## Version
 
-The `Version` contains the protocol version for the blockchain and the
-application as two `uint64` values:
-
 ```go
 type Version struct {
-    Block   uint64
-    App     uint64
+	Block uint64
+	App   uint64
 }
 ```
 
+The `Version` contains the protocol version for the blockchain and the
+application as two `uint64` values.
+
 ## BlockID
 
 The `BlockID` contains two distinct Merkle roots of the block.
@@ -296,11 +296,11 @@ A Header is valid if its corresponding fields are valid.
 ### Version
 
 ```
-block.Version.Block == state.Version.Block
-block.Version.App == state.Version.App
+block.Version.Block == state.Version.Consensus.Block
+block.Version.App == state.Version.Consensus.App
 ```
 
-The block version must match the state version.
+The block version must match consensus version from the state.
 
 ### ChainID
 
@@ -551,18 +551,24 @@ and `ABCIApp` is an ABCI application that can return results and changes to the
 set (TODO). Execute is defined as:
 
 ```go
-Execute(s State, app ABCIApp, block Block) State {
-    // Fuction ApplyBlock executes block of transactions against the app and returns the new root hash of the app state,
-    // modifications to the validator set and the changes of the consensus parameters.
-    AppHash, ValidatorChanges, ConsensusParamChanges := app.ApplyBlock(block)
-
-    return State{
-        LastResults: abciResponses.DeliverTxResults,
-        AppHash: AppHash,
-        LastValidators: state.Validators,
-        Validators: state.NextValidators,
-        NextValidators: UpdateValidators(state.NextValidators, ValidatorChanges),
-        ConsensusParams: UpdateConsensusParams(state.ConsensusParams, ConsensusParamChanges),
-    }
+func Execute(s State, app ABCIApp, block Block) State {
+	// Fuction ApplyBlock executes block of transactions against the app and returns the new root hash of the app state,
+	// modifications to the validator set and the changes of the consensus parameters.
+	AppHash, ValidatorChanges, ConsensusParamChanges := app.ApplyBlock(block)
+
+	nextConsensusParams := UpdateConsensusParams(state.ConsensusParams, ConsensusParamChanges)
+	return State{
+		LastResults:     abciResponses.DeliverTxResults,
+		AppHash:         AppHash,
+		LastValidators:  state.Validators,
+		Validators:      state.NextValidators,
+		NextValidators:  UpdateValidators(state.NextValidators, ValidatorChanges),
+		ConsensusParams: nextConsensusParams,
+		Version: {
+			Consensus: {
+				AppVersion: nextConsensusParams.Version.AppVersion,
+			},
+		},
+	}
 }
 ```
diff --git a/spec/blockchain/state.md b/spec/blockchain/state.md
index b503d5718..09b583cb5 100644
--- a/spec/blockchain/state.md
+++ b/spec/blockchain/state.md
@@ -30,6 +30,25 @@ type State struct {
 Note there is a hard-coded limit of 10000 validators. This is inherited from the
 limit on the number of votes in a commit.
 
+### Version
+
+```go
+type Version struct {
+  consensus Consensus
+  software string
+}
+```
+
+The `Consensus` contains the protocol version for the blockchain and the
+application as two `uint64` values:
+
+```go
+type Consensus struct {
+	Block uint64
+	App   uint64
+}
+```
+
 ### Result
 
 ```go
@@ -90,36 +109,41 @@ type ConsensusParams struct {
 	Block
 	Evidence
 	Validator
+	Version
 }
 
 type hashedParams struct {
-    BlockMaxBytes int64
-    BlockMaxGas   int64
+	BlockMaxBytes int64
+	BlockMaxGas   int64
 }
 
 func (params ConsensusParams) Hash() []byte {
-    SHA256(hashedParams{
-        BlockMaxBytes: params.Block.MaxBytes,
-        BlockMaxGas: params.Block.MaxGas,
-    })
+	SHA256(hashedParams{
+		BlockMaxBytes: params.Block.MaxBytes,
+		BlockMaxGas:   params.Block.MaxGas,
+	})
 }
 
 type BlockParams struct {
-	MaxBytes        int64
-	MaxGas          int64
-	TimeIotaMs      int64
+	MaxBytes   int64
+	MaxGas     int64
+	TimeIotaMs int64
 }
 
 type EvidenceParams struct {
-    MaxAgeNumBlocks   int64
-    MaxAgeDuration    time.Duration
-    MaxNum            uint32
-    ProofTrialPeriod  int64
+	MaxAgeNumBlocks  int64
+	MaxAgeDuration   time.Duration
+	MaxNum           uint32
+	ProofTrialPeriod int64
 }
 
 type ValidatorParams struct {
 	PubKeyTypes []string
 }
+
+type VersionParams struct {
+	AppVersion uint64
+}
 ```
 
 #### Block