diff --git a/.rustfmt.toml b/.rustfmt.toml
index 0e0e77b53ca..422da2beabf 100644
--- a/.rustfmt.toml
+++ b/.rustfmt.toml
@@ -43,7 +43,7 @@ trailing_comma = "Vertical"
 match_block_trailing_comma = false
 blank_lines_upper_bound = 1
 blank_lines_lower_bound = 0
-edition = "2018" # changed
+edition = "2021" # changed
 version = "One"
 merge_derives = true
 use_try_shorthand = true # changed
diff --git a/Cargo.toml b/Cargo.toml
index 554092d4a5e..48f592ff034 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -1,4 +1,5 @@
 [workspace]
+resolver = "2"
 members = [
     "crates/metadata",
     "crates/allocator",
diff --git a/crates/engine/Cargo.toml b/crates/engine/Cargo.toml
index 83b9e400e3d..a7506aaa319 100644
--- a/crates/engine/Cargo.toml
+++ b/crates/engine/Cargo.toml
@@ -23,7 +23,7 @@ sha3 = { version = "0.9" }
 blake2 = { version = "0.9" }
 
 # ECDSA for the off-chain environment.
-libsecp256k1 = { version = "0.3.5", default-features = false }
+libsecp256k1 = { version = "0.7.0" }
 
 [features]
 default = ["std"]
diff --git a/crates/engine/src/ext.rs b/crates/engine/src/ext.rs
index a302df6390a..a28957954cc 100644
--- a/crates/engine/src/ext.rs
+++ b/crates/engine/src/ext.rs
@@ -428,7 +428,7 @@ impl Engine {
         message_hash: &[u8; 32],
         output: &mut [u8; 33],
     ) -> Result {
-        use secp256k1::{
+        use libsecp256k1::{
             recover,
             Message,
             RecoveryId,
@@ -443,7 +443,7 @@ impl Engine {
             signature[64]
         };
         let message = Message::parse(message_hash);
-        let signature = Signature::parse_slice(&signature[0..64])
+        let signature = Signature::parse_standard_slice(&signature[0..64])
             .unwrap_or_else(|error| panic!("Unable to parse the signature: {}", error));
 
         let recovery_id = RecoveryId::parse(recovery_byte)
diff --git a/crates/engine/src/tests.rs b/crates/engine/src/tests.rs
index 798f5287de7..b8fd7179d50 100644
--- a/crates/engine/src/tests.rs
+++ b/crates/engine/src/tests.rs
@@ -16,6 +16,11 @@ use crate::ext::{
     Engine,
     Error,
 };
+use libsecp256k1::{
+    Message,
+    PublicKey,
+    SecretKey,
+};
 
 /// The public methods of the `contracts` pallet write their result into an
 /// `output` buffer instead of returning them. Since we aim to emulate this
@@ -192,3 +197,74 @@ fn must_panic_when_buffer_too_small() {
     // then
     unreachable!("`get_storage` must already have panicked");
 }
+
+#[test]
+fn ecdsa_recovery_test_from_contracts_pallet() {
+    // given
+    let mut engine = Engine::new();
+    #[rustfmt::skip]
+    let signature: [u8; 65] = [
+        161, 234, 203,  74, 147, 96,  51, 212,   5, 174, 231,   9, 142,  48, 137, 201,
+        162, 118, 192,  67, 239, 16,  71, 216, 125,  86, 167, 139,  70,   7,  86, 241,
+         33,  87, 154, 251,  81, 29, 160,   4, 176, 239,  88, 211, 244, 232, 232,  52,
+        211, 234, 100, 115, 230, 47,  80,  44, 152, 166,  62,  50,   8,  13,  86, 175,
+         28,
+    ];
+    #[rustfmt::skip]
+    let message_hash: [u8; 32] = [
+        162, 28, 244, 179, 96, 76, 244, 178, 188,  83, 230, 248, 143, 106,  77, 117,
+        239, 95, 244, 171, 65, 95,  62, 153, 174, 166, 182,  28, 130,  73, 196, 208
+    ];
+
+    // when
+    let mut output = [0; 33];
+    engine
+        .ecdsa_recover(&signature, &message_hash, &mut output)
+        .expect("must work");
+
+    // then
+    #[rustfmt::skip]
+    const EXPECTED_COMPRESSED_PUBLIC_KEY: [u8; 33] = [
+          2, 121, 190, 102, 126, 249, 220, 187, 172, 85, 160,  98, 149, 206, 135, 11,
+          7,   2, 155, 252, 219,  45, 206,  40, 217, 89, 242, 129,  91,  22, 248, 23,
+        152,
+    ];
+    assert_eq!(output, EXPECTED_COMPRESSED_PUBLIC_KEY);
+}
+
+#[test]
+fn ecdsa_recovery_with_secp256k1_crate() {
+    // given
+    let mut engine = Engine::new();
+    let seckey = [
+        59, 148, 11, 85, 134, 130, 61, 253, 2, 174, 59, 70, 27, 180, 51, 107, 94, 203,
+        174, 253, 102, 39, 170, 146, 46, 252, 4, 143, 236, 12, 136, 28,
+    ];
+    let pubkey = PublicKey::parse_compressed(&[
+        2, 29, 21, 35, 7, 198, 183, 43, 14, 208, 65, 139, 14, 112, 205, 128, 231, 245,
+        41, 91, 141, 134, 245, 114, 45, 63, 82, 19, 251, 210, 57, 79, 54,
+    ])
+    .expect("pubkey creation failed");
+
+    let mut msg_hash = [0; 32];
+    crate::hashing::sha2_256(b"Some message", &mut msg_hash);
+
+    let msg = Message::parse(&msg_hash);
+    let seckey = SecretKey::parse(&seckey).expect("secret key creation failed");
+    let (signature, recovery_id) = libsecp256k1::sign(&msg, &seckey);
+
+    let mut signature = signature.serialize().to_vec();
+    signature.push(recovery_id.serialize());
+    let signature_with_recovery_id: [u8; 65] = signature
+        .try_into()
+        .expect("unable to create signature with recovery id");
+
+    // when
+    let mut output = [0; 33];
+    engine
+        .ecdsa_recover(&signature_with_recovery_id, &msg.serialize(), &mut output)
+        .expect("ecdsa recovery failed");
+
+    // then
+    assert_eq!(output, pubkey.serialize_compressed());
+}
diff --git a/crates/env/Cargo.toml b/crates/env/Cargo.toml
index f8194bdabbf..3c0edd0db83 100644
--- a/crates/env/Cargo.toml
+++ b/crates/env/Cargo.toml
@@ -15,7 +15,6 @@ categories = ["no-std", "embedded"]
 include = ["Cargo.toml", "src/**/*.rs", "README.md", "LICENSE"]
 
 [dependencies]
-ink_engine = { version = "3.0.0-rc6", path = "../engine/", default-features = false, optional = true }
 ink_metadata = { version = "3.0.0-rc6", path = "../metadata/", default-features = false, features = ["derive"], optional = true }
 ink_allocator = { version = "3.0.0-rc6", path = "../allocator/", default-features = false }
 ink_primitives = { version = "3.0.0-rc6", path = "../primitives/", default-features = false }
@@ -30,13 +29,19 @@ arrayref = "0.3"
 static_assertions = "1.1"
 sp-arithmetic = { version = "3.0", default-features = false }
 
+[target.'cfg(target_arch = "wasm32")'.dependencies]
+libsecp256k1 = { version = "0.7.0", default-features = false }
+
+[target.'cfg(not(target_arch = "wasm32"))'.dependencies]
+ink_engine = { version = "3.0.0-rc6", path = "../engine/", default-features = false, optional = true }
+
 # Hashes for the off-chain environment.
 sha2 = { version = "0.9", optional = true }
 sha3 = { version = "0.9", optional = true }
 blake2 = { version = "0.9", optional = true }
 
 # ECDSA for the off-chain environment.
-libsecp256k1 = { version = "0.3.5", default-features = false }
+libsecp256k1 = { version = "0.7.0" }
 
 # Only used in the off-chain environment.
 #
diff --git a/crates/env/src/engine/experimental_off_chain/impls.rs b/crates/env/src/engine/experimental_off_chain/impls.rs
index 23fdf4e00aa..f2f7ceff243 100644
--- a/crates/env/src/engine/experimental_off_chain/impls.rs
+++ b/crates/env/src/engine/experimental_off_chain/impls.rs
@@ -34,6 +34,7 @@ use crate::{
     Clear,
     EnvBackend,
     Environment,
+    Error,
     RentParams,
     RentStatus,
     Result,
@@ -252,7 +253,7 @@ impl EnvBackend for EnvInstance {
         message_hash: &[u8; 32],
         output: &mut [u8; 33],
     ) -> Result<()> {
-        use secp256k1::{
+        use libsecp256k1::{
             recover,
             Message,
             RecoveryId,
@@ -267,7 +268,7 @@ impl EnvBackend for EnvInstance {
             signature[64]
         };
         let message = Message::parse(message_hash);
-        let signature = Signature::parse_slice(&signature[0..64])
+        let signature = Signature::parse_standard_slice(&signature[0..64])
             .unwrap_or_else(|error| panic!("Unable to parse the signature: {}", error));
 
         let recovery_id = RecoveryId::parse(recovery_byte)
@@ -279,7 +280,7 @@ impl EnvBackend for EnvInstance {
                 *output = pub_key.serialize_compressed();
                 Ok(())
             }
-            Err(_) => Err(crate::Error::EcdsaRecoverFailed),
+            Err(_) => Err(Error::EcdsaRecoverFailed),
         }
     }
 
diff --git a/crates/env/src/engine/off_chain/impls.rs b/crates/env/src/engine/off_chain/impls.rs
index 22591308252..45d18fcf044 100644
--- a/crates/env/src/engine/off_chain/impls.rs
+++ b/crates/env/src/engine/off_chain/impls.rs
@@ -201,7 +201,7 @@ impl EnvBackend for EnvInstance {
         message_hash: &[u8; 32],
         output: &mut [u8; 33],
     ) -> Result<()> {
-        use secp256k1::{
+        use libsecp256k1::{
             recover,
             Message,
             RecoveryId,
@@ -216,7 +216,7 @@ impl EnvBackend for EnvInstance {
             signature[64]
         };
         let message = Message::parse(message_hash);
-        let signature = Signature::parse_slice(&signature[0..64])
+        let signature = Signature::parse_standard_slice(&signature[0..64])
             .unwrap_or_else(|error| panic!("Unable to parse the signature: {}", error));
 
         let recovery_id = RecoveryId::parse(recovery_byte)
diff --git a/crates/eth_compatibility/Cargo.toml b/crates/eth_compatibility/Cargo.toml
index d3698864667..b6681d68763 100644
--- a/crates/eth_compatibility/Cargo.toml
+++ b/crates/eth_compatibility/Cargo.toml
@@ -16,7 +16,7 @@ include = ["Cargo.toml", "src/**/*.rs", "/README.md", "/LICENSE"]
 
 [dependencies]
 ink_env = { version = "3.0.0-rc6", path = "../env", default-features = false }
-libsecp256k1 = { version = "0.3.5", default-features = false }
+libsecp256k1 = { version = "0.7.0", default-features = false }
 
 [features]
 default = ["std"]
diff --git a/crates/eth_compatibility/src/lib.rs b/crates/eth_compatibility/src/lib.rs
index 4c27cad1ef3..827384ed3b2 100644
--- a/crates/eth_compatibility/src/lib.rs
+++ b/crates/eth_compatibility/src/lib.rs
@@ -13,6 +13,7 @@
 // limitations under the License.
 
 #![no_std]
+
 use ink_env::{
     DefaultEnvironment,
     Environment,
@@ -92,7 +93,7 @@ impl ECDSAPublicKey {
     /// ```
     pub fn to_eth_address(&self) -> EthereumAddress {
         use ink_env::hash;
-        use secp256k1::PublicKey;
+        use libsecp256k1::PublicKey;
 
         // Transform compressed public key into uncompressed.
         let pub_key = PublicKey::parse_compressed(&self.0)
diff --git a/crates/storage/Cargo.toml b/crates/storage/Cargo.toml
index 798cb632a9f..291537ee37c 100644
--- a/crates/storage/Cargo.toml
+++ b/crates/storage/Cargo.toml
@@ -27,6 +27,7 @@ scale-info = { version = "1.0", default-features = false, features = ["derive"],
 cfg-if = "1.0"
 array-init = { version = "2.0", default-features = false }
 
+[target.'cfg(not(target_arch = "wasm32"))'.dependencies]
 # Workaround: we actually just need criterion as a dev-dependency, but
 # there is an issue with a doubly included std lib when executing
 # `cargo check --no-default-features --target wasm32-unknown-unknown`.