diff --git a/changelog.md b/changelog.md
index 24ce75bb10..10a4332861 100644
--- a/changelog.md
+++ b/changelog.md
@@ -6,6 +6,7 @@ This changelog is based on [Keep A Changelog](https://keepachangelog.com/en/1.1.
 
 ## Changed
 
+* DParam now uses new schema, which involves `native_take` validators count.
 * Updated polkadot-sdk dependency to polkadot-stable2509.
 Partner Chains Aura modification follows changes regarding checking inherents that are also present in the new polkadot-sdk release.
 Pallet Session new parameters should be: `type KeyDeposit = ();` and `type Currency = Balances;`.
diff --git a/demo/runtime/src/mock.rs b/demo/runtime/src/mock.rs
index 4db8ede173..6c70c91288 100644
--- a/demo/runtime/src/mock.rs
+++ b/demo/runtime/src/mock.rs
@@ -384,6 +384,7 @@ pub fn create_inherent_data_struct(
 			d_parameter: DParameter {
 				num_permissioned_candidates: 0,
 				num_registered_candidates: max(candidates.len() as u16, 1),
+				num_native_stake_candidates: 0,
 			},
 			permissioned_candidates: vec![],
 			registered_candidates: candidates,
diff --git a/dev/local-environment/configurations/partner-chains-setup/entrypoint.sh b/dev/local-environment/configurations/partner-chains-setup/entrypoint.sh
index 03c18b0fcf..aba3ffe419 100644
--- a/dev/local-environment/configurations/partner-chains-setup/entrypoint.sh
+++ b/dev/local-environment/configurations/partner-chains-setup/entrypoint.sh
@@ -79,6 +79,7 @@ echo "Inserting D parameter..."
     --genesis-utxo $GENESIS_UTXO \
     --permissioned-candidates-count 3 \
     --registered-candidates-count 1 \
+    --native-stake-candidates-count 0 \
     --payment-key-file /keys/funded_address.skey
 
 if [ $? -eq 0 ]; then
diff --git a/toolkit/committee-selection/authority-selection-inherents/src/mock.rs b/toolkit/committee-selection/authority-selection-inherents/src/mock.rs
index 0d06f4da2f..6c4e8d40a2 100644
--- a/toolkit/committee-selection/authority-selection-inherents/src/mock.rs
+++ b/toolkit/committee-selection/authority-selection-inherents/src/mock.rs
@@ -59,6 +59,7 @@ impl AuthoritySelectionDataSource for MockAuthoritySelectionDataSource {
 				d_parameter: DParameter {
 					num_permissioned_candidates: self.num_permissioned_candidates,
 					num_registered_candidates: 2,
+					num_native_stake_candidates: 0,
 				},
 				permissioned_candidates: candidates.clone(),
 			}),
diff --git a/toolkit/committee-selection/authority-selection-inherents/src/select_authorities.rs b/toolkit/committee-selection/authority-selection-inherents/src/select_authorities.rs
index 6f4e464292..6e81b7b61e 100644
--- a/toolkit/committee-selection/authority-selection-inherents/src/select_authorities.rs
+++ b/toolkit/committee-selection/authority-selection-inherents/src/select_authorities.rs
@@ -62,6 +62,11 @@ fn select_candidates<
 			validators.len(),
 			sidechain_epoch
 		);
+		info!(
+			"JAZDA {} {}",
+			input.d_parameter.num_permissioned_candidates,
+			input.d_parameter.num_registered_candidates
+		);
 		Some(validators.into_iter().map(|member| member.into()).collect())
 	} else {
 		warn!("🚫 Failed to select validators for epoch {}", sidechain_epoch);
diff --git a/toolkit/committee-selection/authority-selection-inherents/src/tests.rs b/toolkit/committee-selection/authority-selection-inherents/src/tests.rs
index 0ca46f5768..95ae590623 100644
--- a/toolkit/committee-selection/authority-selection-inherents/src/tests.rs
+++ b/toolkit/committee-selection/authority-selection-inherents/src/tests.rs
@@ -188,7 +188,11 @@ fn ariadne_all_permissioned_test() {
 	// Expected committee: [alice, bob]
 	let permissioned_validators = vec![ALICE, BOB];
 	let registered_validators = vec![CHARLIE, DAVE];
-	let d_parameter = DParameter { num_permissioned_candidates: 8, num_registered_candidates: 0 };
+	let d_parameter = DParameter {
+		num_permissioned_candidates: 8,
+		num_registered_candidates: 0,
+		num_native_stake_candidates: 0,
+	};
 	let authority_selection_inputs = create_authority_selection_inputs(
 		&permissioned_validators,
 		&registered_validators,
@@ -220,7 +224,11 @@ fn ariadne_only_permissioned_candidates_are_present_test() {
 	// D-param: (4, 4)
 	let permissioned_validators = vec![ALICE, BOB];
 	let registered_validators = vec![];
-	let d_parameter = DParameter { num_permissioned_candidates: 4, num_registered_candidates: 4 };
+	let d_parameter = DParameter {
+		num_permissioned_candidates: 4,
+		num_registered_candidates: 4,
+		num_native_stake_candidates: 0,
+	};
 	let authority_selection_inputs = create_authority_selection_inputs(
 		&permissioned_validators,
 		&registered_validators,
@@ -252,7 +260,11 @@ fn ariadne_3_to_2_test() {
 	// D-param: (3, 2)
 	let permissioned_validators = vec![ALICE, BOB, CHARLIE];
 	let registered_validators = vec![DAVE, EVE];
-	let d_parameter = DParameter { num_permissioned_candidates: 3, num_registered_candidates: 2 };
+	let d_parameter = DParameter {
+		num_permissioned_candidates: 3,
+		num_registered_candidates: 2,
+		num_native_stake_candidates: 0,
+	};
 	let authority_selection_inputs = create_authority_selection_inputs(
 		&permissioned_validators,
 		&registered_validators,
@@ -283,7 +295,11 @@ fn ariadne_3_to_2_with_more_available_candidates_test() {
 	// D-param: (3, 2)
 	let permissioned_validators = vec![ALICE, BOB, CHARLIE, DAVE, EVE];
 	let registered_validators = vec![FERDIE, GREG, HENRY, IDA];
-	let d_parameter = DParameter { num_permissioned_candidates: 3, num_registered_candidates: 2 };
+	let d_parameter = DParameter {
+		num_permissioned_candidates: 3,
+		num_registered_candidates: 2,
+		num_native_stake_candidates: 0,
+	};
 	let authority_selection_inputs = create_authority_selection_inputs(
 		&permissioned_validators,
 		&registered_validators,
@@ -321,7 +337,11 @@ fn ariadne_4_to_7_test() {
 	// D-param: (4, 7)
 	let permissioned_validators = vec![ALICE, BOB, CHARLIE, DAVE];
 	let registered_validators = vec![EVE, FERDIE, GREG, HENRY, IDA, JAMES, KIM];
-	let d_parameter = DParameter { num_permissioned_candidates: 4, num_registered_candidates: 7 };
+	let d_parameter = DParameter {
+		num_permissioned_candidates: 4,
+		num_registered_candidates: 7,
+		num_native_stake_candidates: 0,
+	};
 	let authority_selection_inputs = create_authority_selection_inputs(
 		&permissioned_validators,
 		&registered_validators,
@@ -352,7 +372,11 @@ fn ariadne_does_not_return_empty_committee() {
 	let authority_selection_inputs = create_authority_selection_inputs(
 		&[],
 		&[],
-		DParameter { num_permissioned_candidates: 1, num_registered_candidates: 1 },
+		DParameter {
+			num_permissioned_candidates: 1,
+			num_registered_candidates: 1,
+			num_native_stake_candidates: 0,
+		},
 	);
 	let calculated_committee = select_authorities::<AccountId, AccountKeys, MaxValidators>(
 		UtxoId::default(),
diff --git a/toolkit/committee-selection/query/src/commands.rs b/toolkit/committee-selection/query/src/commands.rs
index f6c13e9b5c..35bcc9996a 100644
--- a/toolkit/committee-selection/query/src/commands.rs
+++ b/toolkit/committee-selection/query/src/commands.rs
@@ -87,8 +87,11 @@ mod tests {
 
 	#[tokio::test]
 	async fn ariadne_parameters_returns_correct_json_string() {
-		let d_parameter =
-			DParameter { num_permissioned_candidates: 1, num_registered_candidates: 2 };
+		let d_parameter = DParameter {
+			num_permissioned_candidates: 1,
+			num_registered_candidates: 2,
+			num_native_stake_candidates: 0,
+		};
 		let permissioned_candidates = vec![PermissionedCandidateData {
 			sidechain_public_key: SidechainPublicKey(
 				hex!("0389411795514af1627765eceffcbd002719f031604fadd7d188e2dc585b4e1afb").to_vec(),
@@ -130,6 +133,7 @@ mod tests {
 			serde_json::from_str::<Value>(&cmd_output).unwrap(),
 			serde_json::json!({
 				"dParameter": {
+					"numNativeStakeCandidates": 0,
 					"numPermissionedCandidates": 1,
 					"numRegisteredCandidates": 2
 				},
diff --git a/toolkit/committee-selection/query/src/tests/mod.rs b/toolkit/committee-selection/query/src/tests/mod.rs
index f353284936..44455ba1d1 100644
--- a/toolkit/committee-selection/query/src/tests/mod.rs
+++ b/toolkit/committee-selection/query/src/tests/mod.rs
@@ -351,6 +351,7 @@ mod get_registration_tests {
 			d_parameter: types::DParameter {
 				num_permissioned_candidates: 3,
 				num_registered_candidates: 2,
+				num_native_stake_candidates: 0,
 			},
 			permissioned_candidates: Some(
 				permissioned_candidates
diff --git a/toolkit/committee-selection/query/src/types/ariadne.rs b/toolkit/committee-selection/query/src/types/ariadne.rs
index 2c0ddb80e4..1961b3c061 100644
--- a/toolkit/committee-selection/query/src/types/ariadne.rs
+++ b/toolkit/committee-selection/query/src/types/ariadne.rs
@@ -24,6 +24,8 @@ pub struct DParameter {
 	pub num_permissioned_candidates: u16,
 	/// The number of registered candidates
 	pub num_registered_candidates: u16,
+	/// The number of native stake candidates
+	pub num_native_stake_candidates: u16,
 }
 
 impl From<sidechain_domain::DParameter> for DParameter {
@@ -31,9 +33,10 @@ impl From<sidechain_domain::DParameter> for DParameter {
 		sidechain_domain::DParameter {
 			num_permissioned_candidates,
 			num_registered_candidates,
+			num_native_stake_candidates,
 		}: sidechain_domain::DParameter,
 	) -> Self {
-		Self { num_permissioned_candidates, num_registered_candidates }
+		Self { num_permissioned_candidates, num_registered_candidates, num_native_stake_candidates }
 	}
 }
 
diff --git a/toolkit/data-sources/db-sync/src/candidates/tests.rs b/toolkit/data-sources/db-sync/src/candidates/tests.rs
index b57f13edb3..70fbaa1c35 100644
--- a/toolkit/data-sources/db-sync/src/candidates/tests.rs
+++ b/toolkit/data-sources/db-sync/src/candidates/tests.rs
@@ -87,7 +87,7 @@ with_migration_versions! {
 			.unwrap();
 		assert_eq!(
 			result.d_parameter,
-			DParameter { num_permissioned_candidates: 1, num_registered_candidates: 3 }
+			DParameter { num_permissioned_candidates: 1, num_registered_candidates: 3, num_native_stake_candidates: 0 }
 		)
 	}
 
@@ -109,7 +109,7 @@ with_migration_versions! {
 		assert_eq!(result.permissioned_candidates, Some(latest_permissioned_candidates()));
 		assert_eq!(
 			result.d_parameter,
-			DParameter { num_permissioned_candidates: 1, num_registered_candidates: 3 }
+			DParameter { num_permissioned_candidates: 1, num_registered_candidates: 3, num_native_stake_candidates: 0 }
 		)
 	}
 
@@ -125,7 +125,7 @@ with_migration_versions! {
 			.unwrap();
 		assert_eq!(
 			result.d_parameter,
-			DParameter { num_permissioned_candidates: 1, num_registered_candidates: 2 }
+			DParameter { num_permissioned_candidates: 1, num_registered_candidates: 2, num_native_stake_candidates: 0 }
 		);
 		assert_eq!(result.permissioned_candidates, None)
 	}
@@ -236,7 +236,7 @@ mod candidate_caching {
 				.unwrap();
 			assert_eq!(
 				epoch_193_ariadne_parameters.d_parameter,
-				DParameter { num_permissioned_candidates: 1, num_registered_candidates: 3 }
+				DParameter { num_permissioned_candidates: 1, num_registered_candidates: 3, num_native_stake_candidates: 0 }
 			);
 			// Remove all registrations to prove that one request was cached and the other not
 			sqlx::raw_sql("DELETE FROM tx WHERE block_id >= 0")
diff --git a/toolkit/data-sources/mock/examples/registrations.json b/toolkit/data-sources/mock/examples/registrations.json
index cfd3579438..06c95dd49a 100644
--- a/toolkit/data-sources/mock/examples/registrations.json
+++ b/toolkit/data-sources/mock/examples/registrations.json
@@ -1,30 +1,31 @@
 [
   {
     "permissioned": [
-        {
-            "name": "Test permissioned account 1",
-            "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
-        }
+      {
+        "name": "Test permissioned account 1",
+        "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
+      }
     ],
     "registrations": [
-        {
-            "name": "Test registered account 2",
-            "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "mainchain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "mainchain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "sidechain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "registration_utxo": "0x0000000000000000000000000000000000000000000000000000000000000000#0",
-            "status": "Active",
-            "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
-        }
+      {
+        "name": "Test registered account 2",
+        "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "mainchain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "mainchain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "sidechain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "registration_utxo": "0x0000000000000000000000000000000000000000000000000000000000000000#0",
+        "status": "Active",
+        "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
+      }
     ],
     "nonce": "0x0000000000000000000000000000000000000000000000000000000000000000",
     "d_parameter": {
       "permissioned": 16,
-      "registered": 16
+      "registered": 16,
+      "native_stake": 0
     }
   }
-]
+]
\ No newline at end of file
diff --git a/toolkit/data-sources/mock/registrations.json b/toolkit/data-sources/mock/registrations.json
index cfd3579438..06c95dd49a 100644
--- a/toolkit/data-sources/mock/registrations.json
+++ b/toolkit/data-sources/mock/registrations.json
@@ -1,30 +1,31 @@
 [
   {
     "permissioned": [
-        {
-            "name": "Test permissioned account 1",
-            "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
-        }
+      {
+        "name": "Test permissioned account 1",
+        "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
+      }
     ],
     "registrations": [
-        {
-            "name": "Test registered account 2",
-            "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "mainchain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "mainchain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "sidechain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "registration_utxo": "0x0000000000000000000000000000000000000000000000000000000000000000#0",
-            "status": "Active",
-            "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
-            "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
-        }
+      {
+        "name": "Test registered account 2",
+        "sidechain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "mainchain_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "mainchain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "sidechain_signature": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "registration_utxo": "0x0000000000000000000000000000000000000000000000000000000000000000#0",
+        "status": "Active",
+        "aura_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000",
+        "grandpa_pub_key": "0x0000000000000000000000000000000000000000000000000000000000000000"
+      }
     ],
     "nonce": "0x0000000000000000000000000000000000000000000000000000000000000000",
     "d_parameter": {
       "permissioned": 16,
-      "registered": 16
+      "registered": 16,
+      "native_stake": 0
     }
   }
-]
+]
\ No newline at end of file
diff --git a/toolkit/data-sources/mock/src/candidate.rs b/toolkit/data-sources/mock/src/candidate.rs
index 9654221741..d3976f9a77 100644
--- a/toolkit/data-sources/mock/src/candidate.rs
+++ b/toolkit/data-sources/mock/src/candidate.rs
@@ -124,17 +124,25 @@ impl From<MockPermissionedCandidate> for PermissionedCandidateData {
 pub struct MockDParam {
 	permissioned: u16,
 	registered: u16,
+	native_stake: u16,
 }
 
 impl MockDParam {
 	pub fn info_string(&self) -> String {
-		format!("permissioned: {}, registered: {}", self.permissioned, self.registered)
+		format!(
+			"permissioned: {}, registered: {}, native_stake: {}",
+			self.permissioned, self.registered, self.native_stake
+		)
 	}
 }
 
 impl From<MockDParam> for DParameter {
-	fn from(MockDParam { permissioned, registered }: MockDParam) -> Self {
-		Self { num_permissioned_candidates: permissioned, num_registered_candidates: registered }
+	fn from(MockDParam { permissioned, registered, native_stake }: MockDParam) -> Self {
+		Self {
+			num_permissioned_candidates: permissioned,
+			num_registered_candidates: registered,
+			num_native_stake_candidates: native_stake,
+		}
 	}
 }
 
diff --git a/toolkit/partner-chains-cli/src/setup_main_chain_state/mod.rs b/toolkit/partner-chains-cli/src/setup_main_chain_state/mod.rs
index af59ce133e..4fadd67561 100644
--- a/toolkit/partner-chains-cli/src/setup_main_chain_state/mod.rs
+++ b/toolkit/partner-chains-cli/src/setup_main_chain_state/mod.rs
@@ -96,6 +96,7 @@ impl<T: PartnerChainRuntime> CmdRun for SetupMainChainStateCmd<T> {
 			d_parameter.unwrap_or(DParameter {
 				num_permissioned_candidates: 0,
 				num_registered_candidates: 0,
+				num_native_stake_candidates: 0,
 			}),
 			chain_config.chain_parameters.genesis_utxo,
 		)?;
@@ -240,8 +241,11 @@ fn set_d_parameter_on_main_chain<C: IOContext>(
 			CARDANO_PAYMENT_SIGNING_KEY_FILE.prompt_with_default_from_file_and_save(context);
 		let payment_signing_key =
 			cardano_key::get_mc_payment_signing_key_from_file(&payment_signing_key_path, context)?;
-		let d_parameter =
-			sidechain_domain::DParameter { num_permissioned_candidates, num_registered_candidates };
+		let d_parameter = sidechain_domain::DParameter {
+			num_permissioned_candidates,
+			num_registered_candidates,
+			num_native_stake_candidates: 0,
+		};
 		let tokio_runtime = tokio::runtime::Runtime::new().map_err(|e| anyhow::anyhow!(e))?;
 		let result = tokio_runtime.block_on(offchain.upsert_d_param(
 			await_tx,
diff --git a/toolkit/partner-chains-cli/src/setup_main_chain_state/tests.rs b/toolkit/partner-chains-cli/src/setup_main_chain_state/tests.rs
index 2d1c2b774b..9689223787 100644
--- a/toolkit/partner-chains-cli/src/setup_main_chain_state/tests.rs
+++ b/toolkit/partner-chains-cli/src/setup_main_chain_state/tests.rs
@@ -253,7 +253,7 @@ fn upsert_permissioned_candidates_failed_io() -> MockIO {
 }
 
 fn new_d_parameter() -> DParameter {
-	DParameter::new(4, 7)
+	DParameter::new(4, 7, 0)
 }
 
 fn insert_d_parameter_io() -> MockIO {
@@ -473,7 +473,11 @@ fn mock_with_ariadne_parameters_found() -> OffchainMock {
 	OffchainMock::new()
 		.with_get_d_param(
 			genesis_utxo(),
-			Ok(Some(DParameter { num_permissioned_candidates: 6, num_registered_candidates: 4 })),
+			Ok(Some(DParameter {
+				num_permissioned_candidates: 6,
+				num_registered_candidates: 4,
+				num_native_stake_candidates: 0,
+			})),
 		)
 		.with_get_permissioned_candidates(
 			genesis_utxo(),
@@ -485,7 +489,11 @@ fn mock_with_ariadne_parameters_same_as_in_config_response() -> OffchainMock {
 	OffchainMock::new()
 		.with_get_d_param(
 			genesis_utxo(),
-			Ok(Some(DParameter { num_permissioned_candidates: 6, num_registered_candidates: 4 })),
+			Ok(Some(DParameter {
+				num_permissioned_candidates: 6,
+				num_registered_candidates: 4,
+				num_native_stake_candidates: 0,
+			})),
 		)
 		.with_get_permissioned_candidates(
 			genesis_utxo(),
diff --git a/toolkit/sidechain/domain/src/lib.rs b/toolkit/sidechain/domain/src/lib.rs
index 0ebe4a57e9..e6ff54506e 100644
--- a/toolkit/sidechain/domain/src/lib.rs
+++ b/toolkit/sidechain/domain/src/lib.rs
@@ -1166,7 +1166,7 @@ impl From<GrandpaPublicKey> for CandidateKey {
 	Hash,
 )]
 #[cfg_attr(feature = "serde", derive(Serialize))]
-/// Parameter controlling the number and proportion of registered and permissioned candidates
+/// Parameter controlling the number and proportion of registered, permissioned, and native stake candidates
 /// selected into a Partner Chain committee, used by the Ariadne family of selection algorithms.
 ///
 /// The core idea behind the D-Param is to enable a Partner Chain to bootstrap its operation by
@@ -1178,12 +1178,18 @@ pub struct DParameter {
 	pub num_permissioned_candidates: u16,
 	/// Expected number of registered candidates selected for a committee
 	pub num_registered_candidates: u16,
+	/// Expected number of native stake candidates selected for a committee
+	pub num_native_stake_candidates: u16,
 }
 
 impl DParameter {
 	/// Creates a new [DParameter] from member values
-	pub fn new(num_permissioned_candidates: u16, num_registered_candidates: u16) -> Self {
-		Self { num_permissioned_candidates, num_registered_candidates }
+	pub fn new(
+		num_permissioned_candidates: u16,
+		num_registered_candidates: u16,
+		num_native_stake_candidates: u16,
+	) -> Self {
+		Self { num_permissioned_candidates, num_registered_candidates, num_native_stake_candidates }
 	}
 }
 
diff --git a/toolkit/smart-contracts/commands/src/d_parameter.rs b/toolkit/smart-contracts/commands/src/d_parameter.rs
index 73456c907b..8026d0dab5 100644
--- a/toolkit/smart-contracts/commands/src/d_parameter.rs
+++ b/toolkit/smart-contracts/commands/src/d_parameter.rs
@@ -13,6 +13,9 @@ pub struct UpsertDParameterCmd {
 	#[arg(long)]
 	/// Number of registered candidates
 	registered_candidates_count: u16,
+	#[arg(long)]
+	/// Number of native stake candidates
+	native_stake_candidates_count: u16,
 	#[clap(flatten)]
 	/// Path to the payment key file
 	payment_key_file: PaymentFilePath,
@@ -28,6 +31,7 @@ impl UpsertDParameterCmd {
 		let d_param = DParameter {
 			num_permissioned_candidates: self.permissioned_candidates_count,
 			num_registered_candidates: self.registered_candidates_count,
+			num_native_stake_candidates: self.native_stake_candidates_count,
 		};
 		let client = self.common_arguments.get_ogmios_client().await?;
 
diff --git a/toolkit/smart-contracts/offchain/src/d_param/tests.rs b/toolkit/smart-contracts/offchain/src/d_param/tests.rs
index dc4b057faf..1dcd83fe94 100644
--- a/toolkit/smart-contracts/offchain/src/d_param/tests.rs
+++ b/toolkit/smart-contracts/offchain/src/d_param/tests.rs
@@ -367,7 +367,11 @@ fn token_policy_id() -> [u8; 28] {
 }
 
 fn input_d_param() -> DParameter {
-	DParameter { num_registered_candidates: 30, num_permissioned_candidates: 40 }
+	DParameter {
+		num_registered_candidates: 30,
+		num_permissioned_candidates: 40,
+		num_native_stake_candidates: 0,
+	}
 }
 
 fn expected_plutus_data() -> PlutusData {
diff --git a/toolkit/smart-contracts/offchain/tests/integration_tests.rs b/toolkit/smart-contracts/offchain/tests/integration_tests.rs
index 07aa0333b4..41a95e5e4a 100644
--- a/toolkit/smart-contracts/offchain/tests/integration_tests.rs
+++ b/toolkit/smart-contracts/offchain/tests/integration_tests.rs
@@ -137,21 +137,25 @@ async fn upsert_d_param() {
 	let client = initialize(&container).await;
 	let genesis_utxo = run_init_governance(&client).await;
 	assert!(
-		run_upsert_d_param(genesis_utxo, 0, 1, &governance_authority_payment_key(), &client)
+		run_upsert_d_param(genesis_utxo, 0, 1, 2, &governance_authority_payment_key(), &client)
 			.await
 			.is_some()
 	);
 	assert!(
-		run_upsert_d_param(genesis_utxo, 0, 1, &governance_authority_payment_key(), &client)
+		run_upsert_d_param(genesis_utxo, 0, 1, 2, &governance_authority_payment_key(), &client)
 			.await
 			.is_none()
 	);
 	assert_eq!(
 		d_param::get_d_param(genesis_utxo, &client).await.unwrap().unwrap(),
-		DParameter { num_registered_candidates: 1, num_permissioned_candidates: 0 }
+		DParameter {
+			num_registered_candidates: 1,
+			num_permissioned_candidates: 0,
+			num_native_stake_candidates: 2,
+		}
 	);
 	assert!(
-		run_upsert_d_param(genesis_utxo, 1, 1, &governance_authority_payment_key(), &client)
+		run_upsert_d_param(genesis_utxo, 1, 1, 1, &governance_authority_payment_key(), &client)
 			.await
 			.is_some()
 	)
@@ -429,7 +433,7 @@ async fn governance_action_can_be_initiated_by_non_governance() {
 	let container = image.start().await.unwrap();
 	let client = initialize(&container).await;
 	let genesis_utxo = run_init_governance(&client).await;
-	let tx_to_sign = run_upsert_d_param(genesis_utxo, 1, 1, &eve_payment_key(), &client)
+	let tx_to_sign = run_upsert_d_param(genesis_utxo, 1, 1, 0, &eve_payment_key(), &client)
 		.await
 		.unwrap();
 	run_assemble_and_sign(tx_to_sign, &[GOVERNANCE_AUTHORITY_KEY], &client).await;
@@ -593,12 +597,17 @@ async fn run_upsert_d_param<
 	genesis_utxo: UtxoId,
 	num_permissioned_candidates: u16,
 	num_registered_candidates: u16,
+	num_native_stake_candidates: u16,
 	pkey: &CardanoPaymentSigningKey,
 	client: &T,
 ) -> Option<MultiSigSmartContractResult> {
 	let result = d_param::upsert_d_param(
 		genesis_utxo,
-		&DParameter { num_permissioned_candidates, num_registered_candidates },
+		&DParameter {
+			num_permissioned_candidates,
+			num_registered_candidates,
+			num_native_stake_candidates,
+		},
 		pkey,
 		client,
 		&FixedDelayRetries::new(Duration::from_millis(500), 100),
diff --git a/toolkit/smart-contracts/plutus-data/src/d_param.rs b/toolkit/smart-contracts/plutus-data/src/d_param.rs
index 251cbc901b..cf2e4f3b3d 100644
--- a/toolkit/smart-contracts/plutus-data/src/d_param.rs
+++ b/toolkit/smart-contracts/plutus-data/src/d_param.rs
@@ -15,6 +15,33 @@ pub enum DParamDatum {
 		/// Number of registered candidates in committee.
 		num_registered_candidates: u16,
 	},
+	/// Schema with native stake validators
+	V1 {
+		/// Number of permissioned candidates in committee.
+		num_permissioned_candidates: u16,
+		/// Number of registered candidates in committee.
+		num_registered_candidates: u16,
+		/// Number of native stake validators in committee.
+		num_native_stake_candidates: u16,
+	},
+}
+
+impl DParamDatum {
+	fn decode_v1_appendix(data: &PlutusData) -> Result<Self, String> {
+		let d_parameter = data
+			.as_list()
+			.filter(|datum| datum.len() == 3)
+			.and_then(|items| {
+				Some(DParamDatum::V1 {
+					num_permissioned_candidates: items.get(0).as_u16()?,
+					num_registered_candidates: items.get(1).as_u16()?,
+					num_native_stake_candidates: items.get(2).as_u16()?,
+				})
+			})
+			.ok_or("Expected [u16, u16, u16]")?;
+
+		Ok(d_parameter)
+	}
 }
 
 impl TryFrom<PlutusData> for DParamDatum {
@@ -27,8 +54,19 @@ impl TryFrom<PlutusData> for DParamDatum {
 impl From<DParamDatum> for sidechain_domain::DParameter {
 	fn from(datum: DParamDatum) -> Self {
 		match datum {
-			DParamDatum::V0 { num_permissioned_candidates, num_registered_candidates } => {
-				Self { num_permissioned_candidates, num_registered_candidates }
+			DParamDatum::V0 { num_permissioned_candidates, num_registered_candidates } => Self {
+				num_permissioned_candidates,
+				num_registered_candidates,
+				num_native_stake_candidates: 0,
+			},
+			DParamDatum::V1 {
+				num_permissioned_candidates,
+				num_registered_candidates,
+				num_native_stake_candidates,
+			} => Self {
+				num_permissioned_candidates,
+				num_registered_candidates,
+				num_native_stake_candidates,
 			},
 		}
 	}
@@ -48,15 +86,32 @@ pub fn d_parameter_to_plutus_data(d_param: &sidechain_domain::DParameter) -> Plu
 	let mut list = PlutusList::new();
 	list.add(&PlutusData::new_integer(&d_param.num_permissioned_candidates.into()));
 	list.add(&PlutusData::new_integer(&d_param.num_registered_candidates.into()));
+	list.add(&PlutusData::new_integer(&d_param.num_native_stake_candidates.into()));
 	let appendix = PlutusData::new_list(&list);
 	VersionedGenericDatum {
 		datum: PlutusData::new_empty_constr_plutus_data(&0u64.into()),
 		appendix,
-		version: 0,
+		version: 1,
 	}
 	.into()
 }
 
+/// Decodes V1 appendix of D-param.
+pub fn decode_v1_appendix(data: &PlutusData) -> Result<DParamDatum, String> {
+	let d_parameter = data
+		.as_list()
+		.filter(|datum| datum.len() == 3)
+		.and_then(|items| {
+			Some(DParamDatum::V1 {
+				num_permissioned_candidates: items.get(0).as_u16()?,
+				num_registered_candidates: items.get(1).as_u16()?,
+				num_native_stake_candidates: items.get(2).as_u16()?,
+			})
+		})
+		.ok_or("Expected [u16, u16, u16]")?;
+	Ok(d_parameter)
+}
+
 impl VersionedDatumWithLegacy for DParamDatum {
 	const NAME: &str = "DParamDatum";
 
@@ -83,6 +138,8 @@ impl VersionedDatumWithLegacy for DParamDatum {
 		match version {
 			0 => DParamDatum::decode_legacy(appendix)
 				.map_err(|msg| format!("Cannot parse appendix: {msg}")),
+			1 => DParamDatum::decode_v1_appendix(appendix)
+				.map_err(|msg| format!("Cannot parse appendix: {msg}")),
 			_ => Err(format!("Unknown version: {version}")),
 		}
 	}
@@ -109,9 +166,10 @@ mod tests {
 		let d_param = sidechain_domain::DParameter {
 			num_permissioned_candidates: 17,
 			num_registered_candidates: 42,
+			num_native_stake_candidates: 23,
 		};
 
-		let expected_plutus_data = json_to_plutus_data(v0_datum_json());
+		let expected_plutus_data = json_to_plutus_data(v1_datum_json());
 
 		assert_eq!(d_parameter_to_plutus_data(&d_param), expected_plutus_data)
 	}
@@ -122,13 +180,27 @@ mod tests {
 				{ "constructor": 0, "fields": [] },
 				{ "list": [
 					{ "int": 17 },
-					{ "int": 42 }
+					{ "int": 42 },
 				] },
 				{ "int": 0 }
 			]
 		})
 	}
 
+	fn v1_datum_json() -> serde_json::Value {
+		serde_json::json!({
+			"list": [
+				{ "constructor": 0, "fields": [] },
+				{ "list": [
+					{ "int": 17 },
+					{ "int": 42 },
+					{ "int": 23 },
+				] },
+				{ "int": 1 }
+			]
+		})
+	}
+
 	#[test]
 	fn valid_v0_d_param() {
 		let plutus_data = json_to_plutus_data(v0_datum_json());
@@ -138,4 +210,17 @@ mod tests {
 
 		assert_eq!(DParamDatum::try_from(plutus_data).unwrap(), expected_datum)
 	}
+
+	#[test]
+	fn valid_v1_d_param() {
+		let plutus_data = json_to_plutus_data(v1_datum_json());
+
+		let expected_datum = DParamDatum::V1 {
+			num_permissioned_candidates: 17,
+			num_registered_candidates: 42,
+			num_native_stake_candidates: 13,
+		};
+
+		assert_eq!(DParamDatum::try_from(plutus_data).unwrap(), expected_datum)
+	}
 }