diff --git a/app/upgrades.go b/app/upgrades.go
index 54a4c99..b5eb39a 100644
--- a/app/upgrades.go
+++ b/app/upgrades.go
@@ -35,6 +35,7 @@ func (app *TacChainApp) RegisterUpgradeHandlers() {
 		LiquidStakeKeeper:     &app.LiquidStakeKeeper,
 		BankKeeper:            app.BankKeeper,
 		Erc20Keeper:           &app.Erc20Keeper,
+		StakingKeeper:         app.StakingKeeper,
 	}
 	app.GetStoreKeys()
 	// register all upgrade handlers
diff --git a/app/upgrades/types.go b/app/upgrades/types.go
index b40b013..a170249 100644
--- a/app/upgrades/types.go
+++ b/app/upgrades/types.go
@@ -14,6 +14,7 @@ import (
 	authkeeper "github.com/cosmos/cosmos-sdk/x/auth/keeper"
 	consensusparamkeeper "github.com/cosmos/cosmos-sdk/x/consensus/keeper"
 	paramskeeper "github.com/cosmos/cosmos-sdk/x/params/keeper"
+	stakingkeeper "github.com/cosmos/cosmos-sdk/x/staking/keeper"
 
 	bankkeeper "github.com/cosmos/cosmos-sdk/x/bank/keeper"
 	evmerc20keeper "github.com/cosmos/evm/x/erc20/keeper"
@@ -31,6 +32,7 @@ type AppKeepers struct {
 	LiquidStakeKeeper     *liquidstakekeeper.Keeper
 	BankKeeper            bankkeeper.Keeper
 	Erc20Keeper           *evmerc20keeper.Keeper
+	StakingKeeper         *stakingkeeper.Keeper
 }
 
 type ModuleManager interface {
diff --git a/app/upgrades/v1.0.2/upgrades.go b/app/upgrades/v1.0.2/upgrades.go
index 2e1df16..9556af4 100644
--- a/app/upgrades/v1.0.2/upgrades.go
+++ b/app/upgrades/v1.0.2/upgrades.go
@@ -4,20 +4,26 @@ package v102
 
 import (
 	"context"
+	"errors"
+	"fmt"
+	"regexp"
 
+	"cosmossdk.io/math"
 	storetypes "cosmossdk.io/store/types"
 	upgradetypes "cosmossdk.io/x/upgrade/types"
 
 	"github.com/Asphere-xyz/tacchain/app/upgrades"
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	"github.com/cosmos/cosmos-sdk/types/module"
+	stakingtypes "github.com/cosmos/cosmos-sdk/x/staking/types"
 	evmerc20types "github.com/cosmos/evm/x/erc20/types"
 
 	"github.com/ethereum/go-ethereum/common"
 	"golang.org/x/crypto/sha3"
-
 )
 
+var WhitelistAdminAddressNotFound = errors.New("failed to find whitelist admin address")
+
 // UpgradeName defines the on-chain upgrade name
 const UpgradeName = "v1.0.2"
 
@@ -30,14 +36,6 @@ var Upgrade = upgrades.Upgrade{
 	},
 }
 
-func generateAddressFromDenom(denom string) (common.Address, error) {
-	hash := sha3.NewLegacyKeccak256()
-	if _, err := hash.Write([]byte(denom)); err != nil {
-		return common.Address{}, err
-	}
-	return common.BytesToAddress(hash.Sum(nil)), nil
-}
-
 func CreateUpgradeHandler(
 	mm upgrades.ModuleManager,
 	configurator module.Configurator,
@@ -69,6 +67,99 @@ func CreateUpgradeHandler(
 
 		ak.Erc20Keeper.SetToken(sdkCtx, lsmTokenPair)
 
+		logger := sdkCtx.Logger()
+		params := ak.LiquidStakeKeeper.GetParams(sdkCtx)
+		adminAddress, err := getAdminAddressFromPlanInfo(plan.Info)
+		switch err {
+		case WhitelistAdminAddressNotFound, nil:
+		default:
+			logger.Error("invalid whitelist admin address in plan info", "error", err)
+		}
+		params.WhitelistAdminAddress = adminAddress
+		if err := ak.LiquidStakeKeeper.SetParams(sdkCtx, params); err != nil {
+			return newVM, fmt.Errorf("failed to set params for liquidstake module: %w", err)
+		}
+
+		stakingParams, err := ak.StakingKeeper.GetParams(ctx)
+		if err != nil {
+			return newVM, err
+		}
+
+		stakingParams.ValidatorBondFactor = stakingtypes.DefaultValidatorBondFactor
+		stakingParams.GlobalLiquidStakingCap = stakingtypes.DefaultGlobalLiquidStakingCap
+		stakingParams.ValidatorLiquidStakingCap = stakingtypes.DefaultValidatorLiquidStakingCap
+
+		if err := ak.StakingKeeper.SetParams(ctx, stakingParams); err != nil {
+			return newVM, fmt.Errorf("failed to set params for staking module: %w", err)
+		}
+
+		if err := initializeNewValidatorFields(ctx, ak); err != nil {
+			return newVM, fmt.Errorf("failed to initialize new validtor fields: %w", err)
+		}
+
 		return newVM, nil
 	}
 }
+
+func generateAddressFromDenom(denom string) (common.Address, error) {
+	hash := sha3.NewLegacyKeccak256()
+	if _, err := hash.Write([]byte(denom)); err != nil {
+		return common.Address{}, err
+	}
+	return common.BytesToAddress(hash.Sum(nil)), nil
+}
+
+func initializeNewValidatorFields(ctx context.Context, ak *upgrades.AppKeepers) error {
+	params, err := ak.StakingKeeper.GetParams(ctx)
+	if err != nil {
+		return fmt.Errorf("failed to get staking params: %w", err)
+	}
+
+	validators, err := ak.StakingKeeper.GetValidators(ctx, params.MaxValidators)
+	if err != nil {
+		return fmt.Errorf("failed to get validators: %w", err)
+	}
+
+	for _, validator := range validators {
+		newValidator := validator
+		newValidator.ValidatorBondShares = math.LegacyZeroDec()
+		newValidator.LiquidShares = math.LegacyZeroDec()
+
+		err = ak.StakingKeeper.RemoveValidator(ctx, sdk.ValAddress(validator.OperatorAddress))
+		if err != nil {
+			return fmt.Errorf("failed to remove validator: %w", err)
+		}
+		err = ak.StakingKeeper.SetValidator(ctx, newValidator)
+		if err != nil {
+			return fmt.Errorf("failed to set validator: %w", err)
+		}
+		err = ak.StakingKeeper.SetValidatorByConsAddr(ctx, newValidator)
+		if err != nil {
+			return fmt.Errorf("failed to set validator by consensus address: %w", err)
+		}
+		err = ak.StakingKeeper.SetValidatorByPowerIndex(ctx, newValidator)
+		if err != nil {
+			return fmt.Errorf("failed to set validator by power index: %w", err)
+		}
+	}
+
+	return nil
+}
+
+func getAdminAddressFromPlanInfo(info string) (string, error) {
+	key := "whitelist_admin_address"
+	addressPrefix := sdk.GetConfig().GetBech32AccountAddrPrefix()
+	re := regexp.MustCompile(key + `:\s*(` + addressPrefix + `[a-zA-Z0-9]+)`)
+	matches := re.FindStringSubmatch(info)
+
+	var addr string
+	if len(matches) > 1 {
+		addr = matches[1]
+	} else {
+		return "", WhitelistAdminAddressNotFound
+	}
+	if _, err := sdk.AccAddressFromBech32(addr); err != nil {
+		return "", fmt.Errorf("failed to validate whitelist admin address %s: %w", addr, err)
+	}
+	return addr, nil
+}
diff --git a/app/upgrades/v1.0.2/upgrades_test.go b/app/upgrades/v1.0.2/upgrades_test.go
new file mode 100644
index 0000000..57abdd5
--- /dev/null
+++ b/app/upgrades/v1.0.2/upgrades_test.go
@@ -0,0 +1,37 @@
+package v102
+
+import (
+	"testing"
+
+	sdk "github.com/cosmos/cosmos-sdk/types"
+	"github.com/stretchr/testify/require"
+)
+
+func TestGetAdminAddressFromPlanInfo(t *testing.T) {
+	testCases := []struct {
+		info          string
+		expected      string
+		expectedError bool
+	}{
+		{
+			info:          "",
+			expected:      "",
+			expectedError: true,
+		},
+		{
+			info:          "This proposal aims to add liquid stake possibility for the TAC network. whitelist_admin_address: tac15lvhklny0khnwy7hgrxsxut6t6ku2cgknw79fr",
+			expected:      "tac15lvhklny0khnwy7hgrxsxut6t6ku2cgknw79fr",
+			expectedError: false,
+		},
+	}
+
+	sdk.GetConfig().SetBech32PrefixForAccount("tac", "tacpub")
+
+	for _, tc := range testCases {
+		addr, err := getAdminAddressFromPlanInfo(tc.info)
+		if !tc.expectedError && err != nil {
+			t.Error(err)
+		}
+		require.Equal(t, tc.expected, addr)
+	}
+}
diff --git a/proposals/liquidstake_upgrade/1_admin_tx.json b/proposals/liquidstake_upgrade/1_admin_tx.json
new file mode 100644
index 0000000..272760e
--- /dev/null
+++ b/proposals/liquidstake_upgrade/1_admin_tx.json
@@ -0,0 +1,10 @@
+{
+    "liquid_bond_denom": "stk/utac",
+    "unstake_fee_rate": "0.000000000000000000",
+    "lsm_disabled": true,
+    "min_liquid_stake_amount": "1000",
+    "cw_locked_pool_address": "",
+    "fee_account_address": "tac15lvhklny0khnwy7hgrxsxut6t6ku2cgknw79fr",
+    "autocompound_fee_rate": "0.050000000000000000",
+    "whitelist_admin_address": "tac15lvhklny0khnwy7hgrxsxut6t6ku2cgknw79fr"
+}
diff --git a/proposals/liquidstake_upgrade/2_admin_tx.json b/proposals/liquidstake_upgrade/2_admin_tx.json
new file mode 100644
index 0000000..097cf73
--- /dev/null
+++ b/proposals/liquidstake_upgrade/2_admin_tx.json
@@ -0,0 +1,6 @@
+[
+  {
+    "validator_address": "tacvaloper15lvhklny0khnwy7hgrxsxut6t6ku2cgkwu9tyt",
+    "target_weight": "10000"
+  }
+]
diff --git a/proposals/liquidstake_upgrade/README.md b/proposals/liquidstake_upgrade/README.md
index a04da9c..571a4fc 100644
--- a/proposals/liquidstake_upgrade/README.md
+++ b/proposals/liquidstake_upgrade/README.md
@@ -1,9 +1,56 @@
 ## Liquidstake upgrade
 
 **Steps:**
-1. **Send gov tx to upgrade binary**
-     
-    [Localnet example](./example_step_1.json)
-2. **Send gov tx to update module params** 
+1. Prepare proposal.
 
-    [Localnet example](./example_step_2.json)
+    **Important note**: If you want to set the `WhitelistAdminAddress`, you need to add the line `whitelist_admin_address: <your_whitelist_admin_address>` (e.g., tac15lvhklny0khnwy7hgrxsxut6t6ku2cgknw79fr) to the `plan.info` variable in the governance transaction message. The address must be valid; otherwise, an error log will appear during the update, and you will have to submit the governance transaction again.
+2. Send gov tx to upgrade binary. (e.g., [gov_transaction.json](./gov_transaction.json))
+3. Send admin tx to update module state.
+
+    - Update params. (e.g., [1_admin_tx.json](./1_admin_tx.json))
+    - Update validators. (e.g., [2_admin_tx.json](./2_admin_tx.json))
+
+**Localnet Node Upgrade Checklist (v1.0.1 to v1.0.2)**
+
+1. Initial Setup and Governance Proposal
+    1. Checkout to the old node version.
+    2. Build the old version.
+        ```shell
+        make build
+        ```
+    3. Initialize and start the local network (with a short voting period).
+    ```shell
+    make localnet-init GOV_TIME_SECONDS=60 TACCHAIND=./build/tacchaind
+    make localnet-start TACCHAIND=./build/tacchaind
+    ```
+    4. (New Session) Submit the upgrade governance proposal (targeting height 400).
+    ```shell
+    ./build/tacchaind tx gov submit-proposal ./proposals/liquidstake_upgrade/gov_transaction.json --from validator --fees 200000000000000000utac --gas-adjustment 2 --gas 500000
+    ```
+    5. Vote 'Yes' on the proposal.
+    ```shell
+    ./build/tacchaind tx gov vote 1 yes --from validator --fees 80000000000000000utac
+    ```
+    6. Wait for the node to stop automatically at upgrade height (400).
+2. Upgrade the Node Software
+    1. Checkout to the new node version.
+    2. Build the new version.
+    ```shell
+    make build
+    ```
+    3. Restart the node using the new binary.
+    ```shell
+    make localnet-start TACCHAIND=./build/tacchaind
+    ```
+    4. Verification: Node starts successfully at height 400.
+3. Post-Upgrade Liquidstake Module Configuration
+    1. Update Liquidstake module parameters (e.g., setting the admin address).
+    ```shell
+    tacchaind tx liquidstake update-params ./proposals/liquidstake_upgrade/1_admin_tx.json --from validator --fees 80000000000000000utac
+    ```
+    2. Unpause/enable the Liquidstake module.
+    ```shell
+    tacchaind tx liquidstake pause-module false --from validator --fees 80000000000000000utac
+    ```
+
+The upgraded node is successfully running, and the module is active.
diff --git a/proposals/liquidstake_upgrade/example_step_1.json b/proposals/liquidstake_upgrade/example_step_1.json
deleted file mode 100644
index b4bb053..0000000
--- a/proposals/liquidstake_upgrade/example_step_1.json
+++ /dev/null
@@ -1,19 +0,0 @@
-{
-  "messages": [
-    {
-      "@type": "/cosmos.upgrade.v1beta1.MsgSoftwareUpgrade",
-      "authority": "tac10d07y265gmmuvt4z0w9aw880jnsr700jlgpywe",
-      "plan": {
-        "name": "v1.0.2",
-        "height": "50",
-        "info": "Liquidstake module implementation",
-        "upgraded_client_state": null
-      }
-    }
-  ],
-  "metadata": "<url/to/metadata>",
-  "deposit": "1000000000000000000utac",
-  "title": "Liquidstake upgrade",
-  "summary": "Liquidstake implementation",
-  "expedited": false
-}
diff --git a/proposals/liquidstake_upgrade/example_step_2.json b/proposals/liquidstake_upgrade/gov_transaction.json
similarity index 66%
rename from proposals/liquidstake_upgrade/example_step_2.json
rename to proposals/liquidstake_upgrade/gov_transaction.json
index fa9dffd..97cef14 100644
--- a/proposals/liquidstake_upgrade/example_step_2.json
+++ b/proposals/liquidstake_upgrade/gov_transaction.json
@@ -1,34 +1,15 @@
 {
   "messages": [
     {
-      "@type": "/tac.liquidstake.v1beta1.MsgUpdateParams",
+      "@type": "/cosmos.upgrade.v1beta1.MsgSoftwareUpgrade",
       "authority": "tac10d07y265gmmuvt4z0w9aw880jnsr700jlgpywe",
-      "params": {
-        "liquid_bond_denom": "stk/utac",
-        "unstake_fee_rate": "0.000000000000000000",
-        "lsm_disabled": true,
-        "min_liquid_stake_amount": "1000",
-        "cw_locked_pool_address": "",
-        "fee_account_address": "tac1w2q3mashs2k4wcpqzs5q5xewnhnnr7wslr34safzvwqzvuqh3gjqn6xzrj",
-        "autocompound_fee_rate": "0.050000000000000000",
-        "whitelist_admin_address": "tac1w2q3mashs2k4wcpqzs5q5xewnhnnr7wslr34safzvwqzvuqh3gjqn6xzrj"
+      "plan": {
+        "name": "v1.0.2",
+        "height": "400",
+        "info": "This proposal aims to add liquid stake possibility for the TAC network. whitelist_admin_address: tac15lvhklny0khnwy7hgrxsxut6t6ku2cgknw79fr",
+        "upgraded_client_state": null
       }
     },
-    {
-      "@type": "/tac.liquidstake.v1beta1.MsgUpdateWhitelistedValidators",
-      "authority": "tac10d07y265gmmuvt4z0w9aw880jnsr700jlgpywe",
-      "whitelisted_validators": [
-        {
-          "validator_address": "tacvaloper15lvhklny0khnwy7hgrxsxut6t6ku2cgkwu9tyt",
-          "target_weight": "10000"
-        }
-      ]
-    },
-    {
-      "@type": "/tac.liquidstake.v1beta1.MsgSetModulePaused",
-      "authority": "tac10d07y265gmmuvt4z0w9aw880jnsr700jlgpywe",
-      "is_paused": false
-    },
     {
       "@type": "/cosmos.evm.vm.v1.MsgUpdateParams",
       "authority": "tac10d07y265gmmuvt4z0w9aw880jnsr700jlgpywe",
@@ -90,9 +71,9 @@
       }
     }
   ],
-  "metadata": "<url/to/metadata>",
+  "metadata": "https://github.com/TacBuild/tacchain/pull/61",
   "deposit": "1000000000000000000utac",
-  "title": "Update Liquidstake params",
-  "summary": "Liquidstake params",
+  "title": "Add liquid staking functionality to TAC network",
+  "summary": "The main liquid stake module is compatible with the existing staking and ERC-20 modules of the TAC node, introducing liquid staking tokens (gTAC) that are automatically represented as ERC-20 assets. The second module expands the capabilities of liquid staking and allows users to transfer staked funds to LST bypassing an unbound staking period",
   "expedited": false
 }