diff --git a/dgraph/cmd/bulk/reduce.go b/dgraph/cmd/bulk/reduce.go
index 9036ac271cf..6a5487b432e 100644
--- a/dgraph/cmd/bulk/reduce.go
+++ b/dgraph/cmd/bulk/reduce.go
@@ -132,7 +132,6 @@ func (r *reducer) createBadgerInternal(dir string, compression bool) *badger.DB
 
 	opt := badger.DefaultOptions(dir).
 		WithSyncWrites(false).
-		WithValueThreshold(1 << 20 /* 1 KB */).
 		WithEncryptionKey(key).
 		WithBlockCacheSize(r.opt.BlockCacheSize).
 		WithIndexCacheSize(r.opt.IndexCacheSize)
diff --git a/go.mod b/go.mod
index 606deb91cdb..0d2febb7d2d 100644
--- a/go.mod
+++ b/go.mod
@@ -16,7 +16,7 @@ require (
 	github.com/OneOfOne/xxhash v1.2.5 // indirect
 	github.com/blevesearch/bleve v1.0.13
 	github.com/codahale/hdrhistogram v0.0.0-20161010025455-3a0bb77429bd
-	github.com/dgraph-io/badger/v3 v3.2011.1
+	github.com/dgraph-io/badger/v3 v3.2011.2-0.20210210142907-44c9230e5a66
 	github.com/dgraph-io/dgo/v200 v200.0.0-20200805103119-a3544c464dd6
 	github.com/dgraph-io/gqlgen v0.13.2
 	github.com/dgraph-io/gqlparser/v2 v2.1.5
diff --git a/go.sum b/go.sum
index 9aacc044e1e..e2b99a34413 100644
--- a/go.sum
+++ b/go.sum
@@ -116,8 +116,8 @@ github.com/davecgh/go-spew v1.1.1 h1:vj9j/u1bqnvCEfJOwUhtlOARqs3+rkHYY13jYWTU97c
 github.com/davecgh/go-spew v1.1.1/go.mod h1:J7Y8YcW2NihsgmVo/mv3lAwl/skON4iLHjSsI+c5H38=
 github.com/dgraph-io/badger v1.6.0 h1:DshxFxZWXUcO0xX476VJC07Xsr6ZCBVRHKZ93Oh7Evo=
 github.com/dgraph-io/badger v1.6.0/go.mod h1:zwt7syl517jmP8s94KqSxTlM6IMsdhYy6psNgSztDR4=
-github.com/dgraph-io/badger/v3 v3.2011.1 h1:Hmyof0WMEF/QtutX5SQHzIMnJQxb/IrSzhjckV2SD6g=
-github.com/dgraph-io/badger/v3 v3.2011.1/go.mod h1:0rLLrQpKVQAL0or/lBLMQznhr6dWWX7h5AKnmnqx268=
+github.com/dgraph-io/badger/v3 v3.2011.2-0.20210210142907-44c9230e5a66 h1:k2FNYVVH2tKhcPoX8PDc0RUhCYei/+LebiKZEdFt+Ec=
+github.com/dgraph-io/badger/v3 v3.2011.2-0.20210210142907-44c9230e5a66/go.mod h1:0rLLrQpKVQAL0or/lBLMQznhr6dWWX7h5AKnmnqx268=
 github.com/dgraph-io/dgo/v200 v200.0.0-20200805103119-a3544c464dd6 h1:toHzMCdCUgYsjM0cW9+wafnKFXfp1HizIJUyzihN+vk=
 github.com/dgraph-io/dgo/v200 v200.0.0-20200805103119-a3544c464dd6/go.mod h1:rHa+h3kI4M8ASOirxyIyNeXBfHFgeskVUum2OrDMN3U=
 github.com/dgraph-io/gqlgen v0.13.2 h1:TNhndk+eHKj5qE7BenKKSYdSIdOGhLqxR1rCiMso9KM=
diff --git a/worker/file_handler.go b/worker/file_handler.go
index 433d46602f1..7f72f8784a9 100644
--- a/worker/file_handler.go
+++ b/worker/file_handler.go
@@ -306,7 +306,6 @@ func (h *fileHandler) ExportBackup(backupDir, exportDir, format string,
 		// file reader and verifying the encryption in the backup file.
 		db, err := badger.OpenManaged(badger.DefaultOptions(dir).
 			WithSyncWrites(false).
-			WithValueThreshold(1 << 10).
 			WithNumVersionsToKeep(math.MaxInt32).
 			WithEncryptionKey(key))
 
@@ -358,7 +357,6 @@ func (h *fileHandler) ExportBackup(backupDir, exportDir, format string,
 			dir := filepath.Join(tmpDir, fmt.Sprintf("p%d", group))
 			db, err := badger.OpenManaged(badger.DefaultOptions(dir).
 				WithSyncWrites(false).
-				WithValueThreshold(1 << 10).
 				WithNumVersionsToKeep(math.MaxInt32).
 				WithEncryptionKey(key))
 
diff --git a/worker/restore.go b/worker/restore.go
index c5d45eddcc9..f3f9a92e136 100644
--- a/worker/restore.go
+++ b/worker/restore.go
@@ -68,7 +68,6 @@ func RunRestore(pdir, location, backupId string, key x.SensitiveByteSlice, ctype
 				WithCompression(ctype).
 				WithZSTDCompressionLevel(clevel).
 				WithSyncWrites(false).
-				WithValueThreshold(1 << 10).
 				WithBlockCacheSize(100 * (1 << 20)).
 				WithIndexCacheSize(100 * (1 << 20)).
 				WithNumVersionsToKeep(math.MaxInt32).
diff --git a/worker/server_state.go b/worker/server_state.go
index 923b63ccc4c..864c31ef8e5 100644
--- a/worker/server_state.go
+++ b/worker/server_state.go
@@ -107,7 +107,6 @@ func (s *ServerState) initStorage() {
 		// for posting lists, so the cost of sync writes is amortized.
 		x.Check(os.MkdirAll(Config.PostingDir, 0700))
 		opt := badger.DefaultOptions(Config.PostingDir).
-			WithValueThreshold(1 << 10 /* 1KB */).
 			WithNumVersionsToKeep(math.MaxInt32).
 			WithBlockCacheSize(Config.PBlockCacheSize).
 			WithIndexCacheSize(Config.PIndexCacheSize)