diff --git a/CHANGELOG.md b/CHANGELOG.md
index a75f6041..8fce2335 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -23,6 +23,7 @@
 - Migrate `x/gov` fork from Atom One to Atom One SDK [#248](https://github.com/atomone-hub/atomone/pull/248)
 - Add governors to `x/gov` module [#258](https://github.com/atomone-hub/atomone/pull/258)
 - Prevent Oversight DAO from vetoing proposals that include a change to the Oversight DAO address [#275](https://github.com/atomone-hub/atomone/pull/275)
+- Set chain-wide `MaxCommissionRate` and `MinCommissionRate` to 5% and update validator commission rates accordingly [#300](https://github.com/atomone-hub/atomone/pull/300)
 
 ### STATE BREAKING
 
diff --git a/app/upgrades/v4/upgrades.go b/app/upgrades/v4/upgrades.go
index 4565d3c9..dd7f8d08 100644
--- a/app/upgrades/v4/upgrades.go
+++ b/app/upgrades/v4/upgrades.go
@@ -18,6 +18,7 @@ import (
 	govkeeper "github.com/cosmos/cosmos-sdk/x/gov/keeper"
 	sdkgov "github.com/cosmos/cosmos-sdk/x/gov/types"
 	sdkgovv1 "github.com/cosmos/cosmos-sdk/x/gov/types/v1"
+	stakingkeeper "github.com/cosmos/cosmos-sdk/x/staking/keeper"
 
 	"github.com/atomone-hub/atomone/app/keepers"
 	v1 "github.com/atomone-hub/atomone/x/gov/types/v1"
@@ -43,6 +44,10 @@ func CreateUpgradeHandler(
 			return vm, err
 		}
 
+		if err := migrateValidatorsCommission(ctx, keepers.StakingKeeper); err != nil {
+			return vm, err
+		}
+
 		return vm, nil
 	}
 }
@@ -573,3 +578,42 @@ func governorValSharesValueCodec(cdc codec.Codec) collcodec.ValueCodec[sdkgovv1.
 		return *v1.ConvertAtomOneGovernorValSharesToSDK(c), nil
 	})
 }
+
+// migrateValidatorsCommission sets the chain-wide commission to the constitutionally-mandated 5% and updates all existing validator's commission accordingly.
+func migrateValidatorsCommission(ctx context.Context, stakingKeeper *stakingkeeper.Keeper) error {
+	// Set chain-wide commission to 5%
+	params, err := stakingKeeper.GetParams(ctx)
+	if err != nil {
+		return err
+	}
+
+	fivePercent := math.LegacyMustNewDecFromStr("0.05")
+
+	params.MaxCommissionRate = fivePercent
+	params.MinCommissionRate = fivePercent
+	if err := stakingKeeper.SetParams(ctx, params); err != nil {
+		return err
+	}
+
+	// Update all existing validators' commission to 5%
+	validators, err := stakingKeeper.GetAllValidators(ctx)
+	if err != nil {
+		return err
+	}
+	for _, validator := range validators {
+		// leaving MaxRate and MaxChangeRate unchanged as validator-defined values.
+		// In any case, the chain-wide MaxCommissionRate = MinCommissionRate = 5% would still prevent validators from changing their
+		// commission rate to anything other than 5%.
+		// The only exception is if MaxRate < 5%, in which case we set it also to 5%.
+		validator.Commission.Rate = fivePercent
+		if validator.Commission.MaxRate.LT(fivePercent) {
+			validator.Commission.MaxRate = fivePercent
+		}
+
+		if err := stakingKeeper.SetValidator(ctx, validator); err != nil {
+			return err
+		}
+	}
+
+	return nil
+}