diff --git a/app/test_helpers.go b/app/test_helpers.go
index 5aec56108..ccf49656a 100644
--- a/app/test_helpers.go
+++ b/app/test_helpers.go
@@ -284,7 +284,7 @@ func CheckBalance(t *testing.T, app *WasmApp, addr sdk.AccAddress, balances sdk.
 	require.True(t, balances.IsEqual(app.BankKeeper.GetAllBalances(ctxCheck, addr)))
 }
 
-const DefaultGas = 1200000
+const DefaultGas = 1_500_000
 
 // SignCheckDeliver checks a generated signed transaction and simulates a
 // block commitment with the given transaction. A test assertion is made using
diff --git a/x/wasm/ioutils/ioutil.go b/x/wasm/ioutils/ioutil.go
index 574013234..a34a43e9e 100644
--- a/x/wasm/ioutils/ioutil.go
+++ b/x/wasm/ioutils/ioutil.go
@@ -8,18 +8,12 @@ import (
 	"github.com/CosmWasm/wasmd/x/wasm/types"
 )
 
-// Uncompress returns gzip uncompressed content if input was gzip, or original src otherwise
-func Uncompress(src []byte, limit uint64) ([]byte, error) {
-	switch n := uint64(len(src)); {
-	case n < 3:
-		return src, nil
-	case n > limit:
+// Uncompress expects a valid gzip source to unpack or fails. See IsGzip
+func Uncompress(gzipSrc []byte, limit uint64) ([]byte, error) {
+	if uint64(len(gzipSrc)) > limit {
 		return nil, types.ErrLimit
 	}
-	if !bytes.Equal(gzipIdent, src[0:3]) {
-		return src, nil
-	}
-	zr, err := gzip.NewReader(bytes.NewReader(src))
+	zr, err := gzip.NewReader(bytes.NewReader(gzipSrc))
 	if err != nil {
 		return nil, err
 	}
diff --git a/x/wasm/ioutils/ioutil_test.go b/x/wasm/ioutils/ioutil_test.go
index 93a478ae0..3399abf29 100644
--- a/x/wasm/ioutils/ioutil_test.go
+++ b/x/wasm/ioutils/ioutil_test.go
@@ -6,7 +6,6 @@ import (
 	"errors"
 	"io"
 	"os"
-	"strings"
 	"testing"
 
 	"github.com/stretchr/testify/assert"
@@ -29,30 +28,10 @@ func TestUncompress(t *testing.T) {
 		expError  error
 		expResult []byte
 	}{
-		"handle wasm uncompressed": {
-			src:       wasmRaw,
-			expResult: wasmRaw,
-		},
 		"handle wasm compressed": {
 			src:       wasmGzipped,
 			expResult: wasmRaw,
 		},
-		"handle nil slice": {
-			src:       nil,
-			expResult: nil,
-		},
-		"handle short unidentified": {
-			src:       []byte{0x1, 0x2},
-			expResult: []byte{0x1, 0x2},
-		},
-		"handle input slice exceeding limit": {
-			src:      []byte(strings.Repeat("a", maxSize+1)),
-			expError: types.ErrLimit,
-		},
-		"handle input slice at limit": {
-			src:       []byte(strings.Repeat("a", maxSize)),
-			expResult: []byte(strings.Repeat("a", maxSize)),
-		},
 		"handle gzip identifier only": {
 			src:      gzipIdent,
 			expError: io.ErrUnexpectedEOF,
diff --git a/x/wasm/ioutils/utils.go b/x/wasm/ioutils/utils.go
index d4b8abf34..197c44c36 100644
--- a/x/wasm/ioutils/utils.go
+++ b/x/wasm/ioutils/utils.go
@@ -17,7 +17,7 @@ var (
 
 // IsGzip returns checks if the file contents are gzip compressed
 func IsGzip(input []byte) bool {
-	return bytes.Equal(input[:3], gzipIdent)
+	return len(input) >= 3 && bytes.Equal(gzipIdent, input[0:3])
 }
 
 // IsWasm checks if the file contents are of wasm binary
diff --git a/x/wasm/ioutils/utils_test.go b/x/wasm/ioutils/utils_test.go
index cd4846f09..2dea0c5c0 100644
--- a/x/wasm/ioutils/utils_test.go
+++ b/x/wasm/ioutils/utils_test.go
@@ -41,6 +41,8 @@ func TestIsGzip(t *testing.T) {
 
 	require.False(t, IsGzip(wasmCode))
 	require.False(t, IsGzip(someRandomStr))
+	require.False(t, IsGzip(nil))
+	require.True(t, IsGzip(gzipData[0:3]))
 	require.True(t, IsGzip(gzipData))
 }
 
diff --git a/x/wasm/keeper/gas_register.go b/x/wasm/keeper/gas_register.go
index c21606344..51f8e607c 100644
--- a/x/wasm/keeper/gas_register.go
+++ b/x/wasm/keeper/gas_register.go
@@ -54,12 +54,26 @@ const (
 	DefaultEventAttributeDataFreeTier = 100
 )
 
+// default: 0.15 gas.
+// see https://github.com/CosmWasm/wasmd/pull/898#discussion_r937727200
+var defaultPerByteUncompressCost = wasmvmtypes.UFraction{
+	Numerator:   15,
+	Denominator: 100,
+}
+
+// DefaultPerByteUncompressCost is how much SDK gas we charge per source byte to unpack
+func DefaultPerByteUncompressCost() wasmvmtypes.UFraction {
+	return defaultPerByteUncompressCost
+}
+
 // GasRegister abstract source for gas costs
 type GasRegister interface {
 	// NewContractInstanceCosts costs to crate a new contract instance from code
 	NewContractInstanceCosts(pinned bool, msgLen int) sdk.Gas
 	// CompileCosts costs to persist and "compile" a new wasm contract
 	CompileCosts(byteLength int) sdk.Gas
+	// UncompressCosts costs to unpack a new wasm contract
+	UncompressCosts(byteLength int) sdk.Gas
 	// InstantiateContractCosts costs when interacting with a wasm contract
 	InstantiateContractCosts(pinned bool, msgLen int) sdk.Gas
 	// ReplyCosts costs to to handle a message reply
@@ -78,6 +92,8 @@ type WasmGasRegisterConfig struct {
 	InstanceCost sdk.Gas
 	// CompileCosts costs to persist and "compile" a new wasm contract
 	CompileCost sdk.Gas
+	// UncompressCost costs per byte to unpack a contract
+	UncompressCost wasmvmtypes.UFraction
 	// GasMultiplier is how many cosmwasm gas points = 1 sdk gas point
 	// SDK reference costs can be found here: https://github.com/cosmos/cosmos-sdk/blob/02c6c9fafd58da88550ab4d7d494724a477c8a68/store/types/gas.go#L153-L164
 	GasMultiplier sdk.Gas
@@ -107,6 +123,7 @@ func DefaultGasRegisterConfig() WasmGasRegisterConfig {
 		EventAttributeDataCost:     DefaultEventAttributeDataCost,
 		EventAttributeDataFreeTier: DefaultEventAttributeDataFreeTier,
 		ContractMessageDataCost:    DefaultContractMessageDataCost,
+		UncompressCost:             DefaultPerByteUncompressCost(),
 	}
 }
 
@@ -143,6 +160,14 @@ func (g WasmGasRegister) CompileCosts(byteLength int) storetypes.Gas {
 	return g.c.CompileCost * uint64(byteLength)
 }
 
+// UncompressCosts costs to unpack a new wasm contract
+func (g WasmGasRegister) UncompressCosts(byteLength int) sdk.Gas {
+	if byteLength < 0 {
+		panic(sdkerrors.Wrap(types.ErrInvalid, "negative length"))
+	}
+	return g.c.UncompressCost.Mul(uint64(byteLength)).Floor()
+}
+
 // InstantiateContractCosts costs when interacting with a wasm contract
 func (g WasmGasRegister) InstantiateContractCosts(pinned bool, msgLen int) sdk.Gas {
 	if msgLen < 0 {
diff --git a/x/wasm/keeper/gas_register_test.go b/x/wasm/keeper/gas_register_test.go
index bc3e761a2..03f6cdd86 100644
--- a/x/wasm/keeper/gas_register_test.go
+++ b/x/wasm/keeper/gas_register_test.go
@@ -5,6 +5,8 @@ import (
 	"strings"
 	"testing"
 
+	"github.com/CosmWasm/wasmd/x/wasm/types"
+
 	wasmvmtypes "github.com/CosmWasm/wasmvm/types"
 	storetypes "github.com/cosmos/cosmos-sdk/store/types"
 	sdk "github.com/cosmos/cosmos-sdk/types"
@@ -430,3 +432,41 @@ func TestFromWasmVMGasConversion(t *testing.T) {
 		})
 	}
 }
+
+func TestUncompressCosts(t *testing.T) {
+	specs := map[string]struct {
+		lenIn    int
+		exp      sdk.Gas
+		expPanic bool
+	}{
+		"0": {
+			exp: 0,
+		},
+		"even": {
+			lenIn: 100,
+			exp:   15,
+		},
+		"round down when uneven": {
+			lenIn: 19,
+			exp:   2,
+		},
+		"max len": {
+			lenIn: types.MaxWasmSize,
+			exp:   122880,
+		},
+		"invalid len": {
+			lenIn:    -1,
+			expPanic: true,
+		},
+	}
+	for name, spec := range specs {
+		t.Run(name, func(t *testing.T) {
+			if spec.expPanic {
+				assert.Panics(t, func() { NewDefaultWasmGasRegister().UncompressCosts(spec.lenIn) })
+				return
+			}
+			got := NewDefaultWasmGasRegister().UncompressCosts(spec.lenIn)
+			assert.Equal(t, spec.exp, got)
+		})
+	}
+}
diff --git a/x/wasm/keeper/keeper.go b/x/wasm/keeper/keeper.go
index 372cb4e9a..c5511f3e4 100644
--- a/x/wasm/keeper/keeper.go
+++ b/x/wasm/keeper/keeper.go
@@ -178,12 +178,15 @@ func (k Keeper) create(ctx sdk.Context, creator sdk.AccAddress, wasmCode []byte,
 		return 0, sdkerrors.Wrap(sdkerrors.ErrUnauthorized, "instantiate access must be subset of default upload access")
 	}
 
-	wasmCode, err = ioutils.Uncompress(wasmCode, uint64(types.MaxWasmSize))
-	if err != nil {
-		return 0, sdkerrors.Wrap(types.ErrCreateFailed, err.Error())
+	if ioutils.IsGzip(wasmCode) {
+		ctx.GasMeter().ConsumeGas(k.gasRegister.UncompressCosts(len(wasmCode)), "Uncompress gzip bytecode")
+		wasmCode, err = ioutils.Uncompress(wasmCode, uint64(types.MaxWasmSize))
+		if err != nil {
+			return 0, sdkerrors.Wrap(types.ErrCreateFailed, err.Error())
+		}
 	}
-	ctx.GasMeter().ConsumeGas(k.gasRegister.CompileCosts(len(wasmCode)), "Compiling WASM Bytecode")
 
+	ctx.GasMeter().ConsumeGas(k.gasRegister.CompileCosts(len(wasmCode)), "Compiling wasm bytecode")
 	checksum, err := k.wasmVM.Create(wasmCode)
 	if err != nil {
 		return 0, sdkerrors.Wrap(types.ErrCreateFailed, err.Error())
@@ -216,9 +219,12 @@ func (k Keeper) storeCodeInfo(ctx sdk.Context, codeID uint64, codeInfo types.Cod
 }
 
 func (k Keeper) importCode(ctx sdk.Context, codeID uint64, codeInfo types.CodeInfo, wasmCode []byte) error {
-	wasmCode, err := ioutils.Uncompress(wasmCode, uint64(types.MaxWasmSize))
-	if err != nil {
-		return sdkerrors.Wrap(types.ErrCreateFailed, err.Error())
+	if ioutils.IsGzip(wasmCode) {
+		var err error
+		wasmCode, err = ioutils.Uncompress(wasmCode, uint64(types.MaxWasmSize))
+		if err != nil {
+			return sdkerrors.Wrap(types.ErrCreateFailed, err.Error())
+		}
 	}
 	newCodeHash, err := k.wasmVM.Create(wasmCode)
 	if err != nil {
diff --git a/x/wasm/keeper/keeper_test.go b/x/wasm/keeper/keeper_test.go
index ba1ccdc73..ac26f1039 100644
--- a/x/wasm/keeper/keeper_test.go
+++ b/x/wasm/keeper/keeper_test.go
@@ -360,6 +360,23 @@ func TestCreateWithGzippedPayload(t *testing.T) {
 	require.Equal(t, hackatomWasm, storedCode)
 }
 
+func TestCreateWithBrokenGzippedPayload(t *testing.T) {
+	ctx, keepers := CreateTestInput(t, false, SupportedFeatures)
+	keeper := keepers.ContractKeeper
+
+	deposit := sdk.NewCoins(sdk.NewInt64Coin("denom", 100000))
+	creator := keepers.Faucet.NewFundedAccount(ctx, deposit...)
+
+	wasmCode, err := os.ReadFile("./testdata/broken_crc.gzip")
+	require.NoError(t, err, "reading gzipped WASM code")
+
+	gm := sdk.NewInfiniteGasMeter()
+	contractID, err := keeper.Create(ctx.WithGasMeter(gm), creator, wasmCode, nil)
+	require.Error(t, err)
+	assert.Empty(t, contractID)
+	assert.GreaterOrEqual(t, gm.GasConsumed(), sdk.Gas(121384)) // 809232 * 0.15 (default uncompress costs) = 121384
+}
+
 func TestInstantiate(t *testing.T) {
 	ctx, keepers := CreateTestInput(t, false, SupportedFeatures)
 	keeper := keepers.ContractKeeper
diff --git a/x/wasm/keeper/snapshotter.go b/x/wasm/keeper/snapshotter.go
index a781cb07a..fcece6371 100644
--- a/x/wasm/keeper/snapshotter.go
+++ b/x/wasm/keeper/snapshotter.go
@@ -99,6 +99,9 @@ func (ws *WasmSnapshotter) Restore(
 }
 
 func restoreV1(ctx sdk.Context, k *Keeper, compressedCode []byte) error {
+	if !ioutils.IsGzip(compressedCode) {
+		return types.ErrInvalid.Wrap("not a gzip")
+	}
 	wasmCode, err := ioutils.Uncompress(compressedCode, uint64(types.MaxWasmSize))
 	if err != nil {
 		return sdkerrors.Wrap(types.ErrCreateFailed, err.Error())
diff --git a/x/wasm/keeper/testdata/broken_crc.gzip b/x/wasm/keeper/testdata/broken_crc.gzip
new file mode 100644
index 000000000..378713e2f
Binary files /dev/null and b/x/wasm/keeper/testdata/broken_crc.gzip differ
diff --git a/x/wasm/keeper/wasmtesting/gas_register.go b/x/wasm/keeper/wasmtesting/gas_register.go
index 1c1a319ba..d1975f763 100644
--- a/x/wasm/keeper/wasmtesting/gas_register.go
+++ b/x/wasm/keeper/wasmtesting/gas_register.go
@@ -14,6 +14,7 @@ type MockGasRegister struct {
 	EventCostsFn              func(evts []wasmvmtypes.EventAttribute) sdk.Gas
 	ToWasmVMGasFn             func(source sdk.Gas) uint64
 	FromWasmVMGasFn           func(source uint64) sdk.Gas
+	UncompressCostsFn         func(byteLength int) sdk.Gas
 }
 
 func (m MockGasRegister) NewContractInstanceCosts(pinned bool, msgLen int) sdk.Gas {
@@ -30,6 +31,13 @@ func (m MockGasRegister) CompileCosts(byteLength int) sdk.Gas {
 	return m.CompileCostFn(byteLength)
 }
 
+func (m MockGasRegister) UncompressCosts(byteLength int) sdk.Gas {
+	if m.UncompressCostsFn == nil {
+		panic("not expected to be called")
+	}
+	return m.UncompressCostsFn(byteLength)
+}
+
 func (m MockGasRegister) InstantiateContractCosts(pinned bool, msgLen int) sdk.Gas {
 	if m.InstantiateContractCostFn == nil {
 		panic("not expected to be called")